As Eskom moved the country into stage three load-shedding on Thursday, President Cyril Ramaphosa bowed to pressure from big business by announcing that private companies will now be allowed to generate their own electricity of up to 100MW.
Ramaphosa made the announcement at press conference on Thursday, during which he said schedule 2 of the Electricity Regulation Act would be amended to allow energy regulator Nersa to increase the private electricity generation threshold from 1MW to 100MW.
This means energy self-generation projects of less than 100MW would no longer have to go through the drawn-out Nersa licensing projects.
This means energy self-generation projects of less than 100MW would no longer have to go through the drawn-out Nersa licensing projects.
The move is likely to be welcomed by big manufacturing and mining companies that have long been lobbying Ramaphosa to increase the private generation threshold to at least 50MW.
Big business has often cited the unpredictability of load-shedding by Eskom, saying it disrupted operations, stifled new investments and hampered much-needed economic growth.
Ramaphosa said the finalised amendments on self-energy generation would be published in the next 60 days.
Ramaphosa made the crucial announcement during a week in which Eskom plunged the country into stage three load shedding, much to the frustration of both big and small business operations.
“Following an extensive public consultation process and a significant amount of technical work undertaken by the department of mineral resources and energy, we will be amending schedule 2 of the Electricity Regulation Act to increase the Nersa licensing threshold for embedded generation projects from 1MW to 100MW,” said Ramaphosa.
“This intervention 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.
“It is evidence of our intention to tackle this economic crisis head on by implementing major economic reforms that will transform our economy.
It is evidence of our intention to tackle this economic crisis head on by implementing major economic reforms that will transform our economy.
— President Cyril Ramaphosa
“It also demonstrates our commitment as government to listen carefully to experts, to engage closely with our social partners and to take on board new ideas to address our long-standing challenges.”
Ramaphosa also said beyond generation power for their own use, companies would be allowed to sell excess electricity to the national grid.
He said the move would present consumers with “price competitive offerings and enhance efficiencies so that every generator is then kept on their toes to make sure they offer the best service”.
Municipalities, Ramaphosa said, would “have discretion to approve grid connection applications in their networks” based environmental impact assessments.
Ramaphosa said while the new plan also included easing the electricity supply and distribution burden on Eskom, the troubled power utility would remain a significant player in the entire value chain.
Kevin Mileham, the DA’s spokesperson for the energy portfolio, said the party welcomed Ramaphosa’s decision.
He said his party would put pressure on government to ensure that it sticks to the deadline announced by Ramaphosa of publishing the final amendments to schedule 2 in the next 60 days.
Mileham added that the DA hoped this was not a government ploy to save face as SA endures debilitating load-shedding.
It must be stressed that this simply cannot be one of the president’s trademark empty promises in order to save face in light of Eskom’s announcement of stage 3 and 4 rolling blackouts this week.
— Kevin Mileham, DA spokesperson for the energy portfolio
“It must be stressed, however, that this simply cannot be one of the president’s trademark empty promises in order to save face in light of Eskom’s announcement of stage 3 and 4 rolling blackouts this week.
“These amendments must be actioned and implemented without delay as they have the potential to free up and encourage investment in the electricity generation sector and ease demand on the grid.
“The details of the amendment remain to be seen. If they include easing the conditions on municipalities seeking to buy electricity from independent power producers, then the announcement also spells good news for the DA-run Western Cape government’s Municipal Energy Resilience Project,” said Mileham.
Labour Federation Cosatu also said it welcome Ramaphosa’s announcement but said “it will not resolve the Level 4 load shedding decimating the economy today.
COSATU it remain concerned that millions of worker were losing jobs due to load shedding.Another opposition party, the FF Plus, also lauded the move, saying it "ushers in new era for SA”.
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