RE: Raising distributed generation cap easy decision15 Feb 2021 15:52
Most of this capacity would be built and operated by IPPs, which would enter into long-term offtake agreements with mines, smelters, factories and farms. In many cases, the facilities would require wheeling of electricity over either the Eskom grid or municipal grids.
Stakeholder consultation would be undertaken, the President said, to determine the level at which the new licensing threshold should be set and to finalise the necessary enabling frameworks.
De Ruyter indicated previously that Eskom had established commercial and technical processes to help expedite distributed-generation projects, including those that would need to wheel power.
“We welcome the President’s announcement in SONA regarding the lifting of the cap on so-called embedded, or self-generation without a licence – subject to technical grid-access requirements.
“We think, in principle, that’s a good thing – it will, we hope, unlock investment in generation capacity and go some way to bridging the generation shortfall that we’ve got,” De Ruyter said.
Concerns have been expressed post-SONA, however, that Mineral Resources and Energy Minister Gwede Mantashe did not appear to be fully supportive of the proposal, which could result in a watered-down ERA Schedule 2 amendment.
Nevertheless, organised business was strongly in favour of reform, with various companies having already indicated that they would back distributed-generation projects, should the regulatory red-tape be cut.
Writing in her regular newsletter, Business Leadership South Africa CEO Busisiwe Mavuso argued that “everyone from Eskom to the Minerals Council agrees that the appropriate limit for the ERA amendment is 50 MW”.
She, therefore, questioned why the President felt it necessary for there to be further consultation on the limit. “Why not just cut to the chase and commit to 50 MW and not delay things?” she asked.
De Ruyter also told participants to the FMF webinar that a second action that government could take to support Eskom and alleviate the power crisis would be to support continued reform in the electricity supply industry (ESI), so as to ensure that the structures were in place to enable the transition to a cleaner, more distributed and competitive sector.
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