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Schedule 2 to Electricity Regulation Act Republished

August 23, 2021

Department of Mineral Resources and Energy

Amended Schedule 2 to the Electricity Regulation Act has been republished.

The mineral resources and energy department republished Schedule 2 in Government Gazette 45023.

Notice 751 amends Notice 737 published in Gazette 44989 on 12 August 2021.

The amendment to Schedule 2 increases the National Energy Regulator’s (NERSA) licensing threshold for embedded generation projects from 1 MW to 100 MW.

In June 2021, president Ramaphosa announced that Schedule 2 would be amended.

During a media briefing at the time, the president emphasized that South Africa’s ability to address the energy crisis swiftly and comprehensively will determine the pace of our economic recovery.

“Resolving the energy supply shortfall and reducing the risk of load shedding is our single most important objective in reviving economic growth”, he said.

The president added that the amendment of Schedule 2 “reflects our determination to take the necessary action to achieve energy security and reduce the impact of load shedding on businesses and households across the country”.

“The amended regulations will exempt generation projects up to 100 MW in size from the NERSA licensing requirement, whether or not they are connected to the grid. This will remove a significant obstacle to investment in embedded generation projects”, he said.

According to the president, generators will also be allowed to wheel electricity through the transmission grid, subject to wheeling charges and connection agreements with Eskom and relevant municipalities.

In order to ensure orderly development of the energy system, municipalities will have discretion to approve grid connection applications in their networks based on an assessment of the impact on their grid.

They will also have to undertake an Environmental Impact Assessment.

The president declared that the reform is expected to “unlock significant investment in new generation capacity in the short and medium term, enabling companies to build their own generation facilities to supply their energy needs”.

“This in turn will increase the available supply of energy and reduce the burden on Eskom, allowing Eskom to proceed with its intensive maintenance programme and reduce its reliance on expensive gas and diesel turbines”, he said.

Generators will need to register with NERSA.

Changes include reference to amending Schedule 2 as opposed to intending to amend; reference to one or more customers as opposed to end-use customer; reference to connection point for generation facilities and removal of “any other authorisations and/or agreements as may be required” from the revocation and deregistration section.

Meanwhile, the department has published bids received on 16 August 2021 for the Renewable Energy Independent Power Producer Procurement Programme Bid Window 5.

The Request for Qualification and Proposals (RFP) under Bid Window 5 was released in April 2021.

The RFP called for proposals from Independent Power Producers to develop new generation capacity of 2 600 MW, including 1 600 MW from onshore wind energy and 1 000 MW from Solar Photovoltaic (Solar PV) power plants, in line with Ramaphosa’s commitment in the 2021 State of the Nation Address to increase South Africa’s generation capacity and ensure the security of energy supply.

According to the department, project sizes will range from a minimum of 1 MW to a maximum of 140 MW (for Onshore Wind) and 75 MW (for Solar PV).