Photovoltaic association welcomes rules allowing 100MW exemption

12 August 2021 - 22:11 By ernest mabuza
The SA Photovoltaic Association says the introduction of rules which allow for the generation of up to 100MW of power without a licence will be welcomed by intensive energy users looking to generate their own electricity from alternate technologies.
The SA Photovoltaic Association says the introduction of rules which allow for the generation of up to 100MW of power without a licence will be welcomed by intensive energy users looking to generate their own electricity from alternate technologies.
Image: 123RF/VACLAW VOLRAB

The introduction of rules which allow for the generation of up to 100MW of power without a licence will be welcomed by many intensive energy users looking to generate their own electricity from alternate technologies.

This is the reaction of the SA Photovoltaic Industry Association (Sapvia), after Thursday's gazetting by the department of mineral resources and energy of the notice to increase the licensing threshold for embedded generation projects from 1MW to 100MW.

In the notice published on Thursday, mineral resources and energy minister Gwede Mantashe listed a number of activities exempt from licensing and registration.

These included the operation of a generation facility, with or without energy storage, for the sole purpose of providing standby or backup electricity in the event of — and for a duration no longer than — an electricity supply interruption. Another was the operation of a generation facility, with or without energy storage, with a point of connection on the transmission or distribution power system, in circumstances where the generation facility to an end-use customer and there is no wheeling of that electricity.

Wheeling means conveyancing of electricity from the point of connection to a point of consumption through a third-party transmission.

Sapvia said there has been great work undertaken by the department in timeously proposing a revision to Schedule 2 of the Electricity Regulation Act.

“At first glance, there are several positive changes in line with industry’s call for regulatory reform,” said Sapvia's COO, Nivesh Govender.

He said that, for the first time, the industry sees wheeling specifically mentioned and considered as its own principle.

“The schedule has removed reference to the ‘single customer' and focused on 'an end user customer' which could allow for interpretation from a singular to multiple.

“Third party generation has been recognised with regards to a legal entity that may be an embedded generator who may contract with a distributor and then apply wheeling.”

However, Govender said the amendments have missed providing comprehensive definitions and this was creating unnecessary ambiguity.

He said the amendments raised more questions of clarity around self-generation, the application of wheeling and trading as well as how including energy storage to generation projects will affect the requirements.

“Sapvia will be conducting a thorough analysis of the published amendments against the various expert inputs provided before we publish the industry view on the regulatory changes and the associated benefits they will or should bring to the economy,” Govender said.

Govender requested Mantashe and his department to work with the National Energy Regulator of SA, distributors, business and industry to ensure that the policy directive is clear, and processes are well defined.

“While some bureaucracy is expected, it is vital that together we create an enabling environment that encourages more participation in the sector to achieve the desired outcome of energy security through mechanisms such as wheeling, multiple private (power purchase agreements) and trading, thereby creating a liberated energy system.”

Govender said these changes will foster much-needed investment into the energy infrastructure and alleviate the continuously building pressure on Eskom,.

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