- The threshold for embedded generation plants increased to 100MW
- Private businesses can now generate energy to meet their demands.
- Reform expected to boost investment and reduce reliance on overburdened ESKOM.
South African President Cyril Ramaphosa has announced the increase of the embedded generation limit from 1MW to 100MW. The change is expected to take effect with the publication of the final amendment to Schedule 2 of the Electricity Regulation Act by the Department of Mineral Resources and Energy within the next 60 days.
According to the President, the amended regulations will exempt generation projects up to 100MW in size from NERSA licencing requirement. This applies to both grid-connected and off-grid systems. It is expected that it will boost investment in embedded generation projects. In addition, businesses who generate their own electricity can now supply electricity to the grid subject to wheeling charges and connection agreements with Eskom and relevant municipalities and grid connection permit, Ramaphosa added.
Generation projects will still have to get approval from NERSA; municipalities can now approve grid connection applications on their network based on an assessment of the impact on their grid. Nevertheless, the president believes that the reform will lead to a significant investment in new generation capacity in the short and medium-term and encourage companies to install self-generation facilities to meet their needs.
Sector stakeholders believe that the reforms will help unlock infrastructure investments that will spur energy proliferation and reduce reliance on ESKOM.