1/ President @CyrilRamaphosa and energy Minister @GwedeMantashe1 (in his speech in parliament today) have outlined progress around 4 interventions aimed at accelerating investment in new generation capacity in South Africa. My comments in the thread below.....
2/ these are the 4 interventions:
a) ease permissions for self generation
b) procure emergency power
c) issue Sec34 determinations to implement the IRP and kickstart IPP procurements
d) allow municipalities to procure their own power
So, what progress has been made?
a) ease permissions for self generation
b) procure emergency power
c) issue Sec34 determinations to implement the IRP and kickstart IPP procurements
d) allow municipalities to procure their own power
So, what progress has been made?
3/ On self generation: the Minister reported wrong data on the pipeline of applications/MWs for registration or licences. The industry says its much higher.
Minister says NERSA will decide self gen licence applications (any size >1MW) within 120 days, implying there’s no problem
Minister says NERSA will decide self gen licence applications (any size >1MW) within 120 days, implying there’s no problem
4/ on self generation: industry says there’s a HUGE problem at NERSA & it’s unlikely they can process licences within 120 days.
DMRE has a working group with industry & hopefully these obstacles will be explained. Do you know of any generation licences issued in past year?
DMRE has a working group with industry & hopefully these obstacles will be explained. Do you know of any generation licences issued in past year?
5/ Given the barriers/backlog in the regulator, it would be MUCH better if Minister @GwedeMantashe1 amended Schedule2 of the Electricity Regulation Act to exempt self generators of any size from NERSA licensing (as it was pre 2017) so that huge pipeline of investments can flow
6/ The second intervention to secure more power is an emergency procurement. There have been 481 responses to DMRE’s Request for Information for projects that could deliver power within 12 months hi but many say they require more time and longer contracts to be economical
7/ Hopefully DMRE’s RFI for emergency power offers some new opportunities (like contracting curtailed elextricity from REIPPP projects) but I’m generally sceptical: emergency power is never cheap and it often takes longer to implement than envisaged
8/ The 3rd intervention - implementing the IRP least cost plan - will be much cheaper than emergency power, projects will be more transparently and competitively procurred and some projects, like solar, can be built quickly.
9/ @GwedeMantashe1’s announcement today that Section 34 Ministerial Determinations have been drafted & NERSA concurrence is being sought is welcome. Once finalised, the Minister can instruct the IPP Office to commence with the 5th REIPPP auction as per the IRP. Clock is ticking
10/ it took 9 yrs to finalise a new IRP electricity plan. Very little has happened since October when it was Gazetted. Now we have load-shedding. It is extremely urgent that NERSA expedites required concurrence processes & Minister @GwedeMantashe1 then tells IPP Office to procure
11/ the 4th intervention is to allow municipalities to procure their own power. Minister @GwedeMantashe1 says he supports this but today highlighted a bunch of regulatory hurdles. He is also opposing the City of Cape Town’s court case asking him to move out of the way
12/ In summary, we’ve seen some baby steps to enable more private power to be procurred. But what we really need is serious regulatory and structural reforms to free up massive investment that will help South Africa get past power shortages and outages sooner rather than later
