1/ I’m really trying to stay positive during the lock-down but we also need to think about the resilience of our economy and future growth prospects. This move by SA’s Energy Minister @GwedeMantashe1 was cranky, short-sighted and detrimental. Here’s why (in the thread below)
2/ South Africa’s Energy Minister has gazetted a schedule 2 amendment (under the Electricity Regulation Act) specifying which categories of electricity generators don’t need a licence from the regulator, NERSA. He decided <1MW rather than <10MW, ignoring stakehokder advice
3/ The Dept of Mineral Resources & Energy argues that they need control over, and knowledge of, who connects to the electricity grid & that the NERSA licensing process enables this. Let’s examine why & whether there are more efficient ways of doing this for smaller generators
4/ If government wants line of sight (presumably for planning purposes)on all those small generators (100kW - 10MW) that might connect to the grid if they were exempt from NERSA licensing, they can require them all to register (as is the case currently for generators 100kW- 1 MW)
5/ If government’s reluctance to lift licence exemptions for electricity generators from 1MW to 10MW is around the need for control then we need to ask why? Why potentially restrict a myriad of innovative private solutions to South Africa’s power shortages.
6/ Why does the issue of whether generators <10MW rather than <1MW should be exempt from licensing matter? Because there is a huge pipeline of projects in that size range that are being held up currently: e.g. large C&I solar PV, biomass, etc, many wanting to supply customers
7/ Minister @GwedeMantashe1 says, ‘What’s the problem? Submit generation licence applications to NERSA and they’ll take 120 days.’ Problem is they won’t. In fact NERSA has issued only one new generation licence since 2016 despite South Africa experiencing debilitating power cuts
8/ Why does this matter? Well, we’re imposing onerous & uncertain licensing requirements on small generators (<10MW), which are more appropriate for very large units, thus throttling a huge pipeline of investment at a time when we need extraordinary measures to heal our economy
9/ I can’t see any other competitively priced options delivering new power in South Africa this year other than small/medium sized embedded generation investments. That’s why regulatory reform is so important. Power cuts will return. @Eskom_SA has cut maintenance during lock-down
