The government of South Africa has gazetted the self-generation threshold to 100MW, without licencing. The Department of Mineral Resources and Energy (DMRE) published the gazette and said the move gives a sure indication that the government is serious around driving investment in the energy generation sector, in order to support economic growth and diversify the generation sources away from just a single risk entity.
On 10 June 2021, the South African Presidency announced an amendment to Schedule 2 of the Electricity Regulation Act 4 of 2006 (“ERA”), potentially opening a new era of electricity self-generation to mitigate the effects of the country’s electricity generation capacity constraints and the impact load-shedding to balance demand is having on the economy.
Power Purchase Agreements
According to Ntombifuthi Ntuli, CEO of South African Wind Energy Association (SAWEA) the gazette announcement of the new South Africa self-generation threshold means that the industry can now easily sign Power Purchase Agreements with private entities and complete projects faster to spur economic recovery
“Large companies, mines and farms are reported to have 5,000 MW of deferred projects that could be freed up if licensing requirements are lifted. Independent Power Producers earlier reported that several mining houses and other IEUs have contacted industry representatives to inquire about projects that are ready for acquisition. The Association sees this as a clear intention to procure clean energy from the wind sector,” said Ntombifuthi.
“Raising the threshold will allow IEUs, which make up a significant portion of the South African GDP, to create new generation capacity that will in turn stimulate the economy as well as free up the Electricity Availability Factor (EAF),” the CEO added.