Power utility Eskom has set up meetings with the energy industry after an uproar over the new proposed regulations on grid allocation requirements to be met by independent power producers.
On Thursday, the South African Independent Power Producers Association (SAIPPA) met with Eskom over the new rules which the IPPs believe will discourage or bring to a halt private energy-generation projects due to possible higher costs of embarking on such projects.
The new regulations released as the Interim Grid Capacity Allocation Rules (IGCAR), over a week ago, among others, demand that those embarking on private energy projects must obtain environmental impact assessment authorisations.
Other new requirements Eskom has introduced include having power purchase agreements in place and measured data for the primary energy resources, a minimum of two years for wind and one year for solar.
SAIPPA chair Brian Day told TimesLIVE Premium that they were “actively dealing with the issue”.
Day confirmed that a meeting with Eskom to address the issue took place but refused to comment, saying “further meetings” were scheduled for next week.
Eskom media desk also confirmed to TimesLIVE Premium that “Eskom is reviewing the concerns made by the industry on this”.
Asked why additional requirements were needed for grid allocation, Eskom said the development of the rules is necessitated by, among others, the increased competition for grid capacity and “the rapid rate of increase in applications and grid capacity hogging impacting on efficiency of grid capacity allocation”.
The rules will bring certainty in the market, which is what investors are looking for. The rules will discourage the hogging of capacity, which will attract more investment and accelerate the injection of power into the grid and boost economic growth.
— Eskom
Eskom said it was also attempting “to offer non-discriminatory access to the grid” and avoid the “manipulation of grid allocations made through the first come, first served” principle.
Eskom said the guidelines will immediately operate on an interim basis.
“The interim rules are effective as of June 21 2023. Eskom is engaging the regulator to have the rules codified,” stated Eskom.
There has been speculation that Eskom may have been trying to use the new guidelines to protect its monopoly in the energy space.
Eskom, however, said the guidelines are aimed to achieve the opposite.
“The rules will bring certainty in the market, which is what investors are looking for. The rules will discourage the hogging of capacity, which will attract more investment and accelerate the injection of power into the grid and boost economic growth,” stated Eskom.
Other additional compliance steps Eskom has introduced in the guidelines included water usage rights.
Eskom said this would be useful to assess readiness of projects to connect to the grid and to be able to allocate the limited grid capacity “to shovel ready projects and accelerate the injection of power to the grid”.
Some experts have argued that as a country in an energy crisis, it made no sense for Eskom to increase requirements for grid access.
“The purpose of Eskom Interim Grid Capacity Allocation Rules is to discourage hogging of capacity and to ensure that shovel ready projects are allocated capacity and accelerate the injection of power to the grid,” Eskom stated.
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