Mantashe buckles – 100 MW electricity generation amendment finally gazetted

The minister of mineral resources and energy, Gwede Mantashe, has given in and published the proposed amendment to the Electricity Regulation Act that will enable business and individuals to generate up to 100 MW of electricity without a licence from the national energy regulator, Nersa.

The proposed change in regulations was published in the Government Gazette two days late, after president Cyril Ramaphosa gave the department 60 days to do so in a speech on 10 June 2021. Everyone was surprised at the announcement as experts were hoping for a threshold of 10 MW. The current threshold is 1MW.

Since then all eyes were on the department to see when the new regulations will be published, after Mantashe and various previous ministers of energy did not act on it, despite many promises over the years.

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Avoiding load shedding

Lifting the threshold is expected to make it possible for individuals as well as businesses to depend less on Eskom and generate their own power to avoid load shedding. Although no licence will be required, private power facilities will still have to be registered with the regulator and meet all the conditions.

According to the proposed regulation, the operation of a generation facility with or without energy storage, with a capacity of no more than 100 MW with a point of connection on the transmission or distribution power system will be allowed if:

• the generation facility is operated to supply electricity to an end-use customer and there is no wheeling of that electricity
• the generation facility is operated to supply electricity to an end-use customer by wheeling and the generator has entered into a connection agreement with the holder of the transmission or distribution licence in respect of the power system over which the electricity is to be wheeled and
• the generation facility does not export or import any electricity onto or from the transmission or distribution power system.

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Other provisions

Other provisions include:

• allowing the installation of standby or backup generation to provide electricity during supply interruptions without a licence or registration
• private generation capacity of up to 100kW is exempted from a licence or registration, provided that the generator complies with the distribution and transmission code and has a point of connection.