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INDEPENDENT power producers will now be allowed to generate up to 100 megawatts (MW) of electricity as part of dealing with the energy crisis crippling the South African economy.
On Thursday, President Cyril Ramaphosa announced that the government has approved the amendment of Schedule 2 of the Electricity Regulation Act for the energy sector.
Ramaphosa said the decision followed an extensive public consultation and a significant amount of technical work undertaken by the Department of Mineral Resources and Energy.
He said it would increase the National Energy Regulator of SA’s licensing threshold for embedded generation projects from 1MW to 100MW.
The amended regulations will exempt generation projects up to 100MW from the Nersa licensing requirement, whether or not they are connected to the grid.
This will remove a significant obstacle to investment in embedded generation projects.
“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,” Ramaphosa said.
“It is evidence of our intention to tackle this economic crisis head-on, by implementing major economic reforms that will transform our economy.”
Ramaphosa’s announcement comes as the economy is grappling with blackouts after power supplier Eskom ramped up its rotational load shedding to Stage 4 yesterday due to continuous breakdowns.
The business industry has been calling for the government to increase the threshold on embedded power generation from 1MW to 50MW.
Ramaphosa said that was a significant new step in further reforming the electricity sector towards achieving a stable and secure supply of energy.
“It also demonstrates our commitment as the 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,” he said.
BUSINESS REPORT ONLINE