SA started the new year in much the same way as it ended 2022 — with little relief from intermittent, planned power cuts that reached record levels in the previous year.
But recent progress in opening the country’s electricity sector to greater private participation may provide a glimmer of hope.
The country was subjected to more than 200 days of load-shedding in 2022, the worst power supply performance ever for state-owned utility Eskom. Three days into 2023, load-shedding continues unabated and with long-term outages at Medupi, Kusile and Koeberg nuclear power station, relief from the planned power cuts in the near term seem unlikely.
Over the longer term, as more private electricity generation projects come online, and as Eskom starts allowing greater private participation on its transmission system, SA may start experiencing some relief from a more than a decade’s long power crises.
In mid-December the minister of mineral resources and energy, Gwede Mantashe, gazetted amendments to SA energy generation licensing regime under the Electricity Regulation Act 4 of 2006.
Notably, the amendments included the extension of the exemption from the requirement to obtain an electricity generation licence for generation facilities “irrespective of capacity”.
The licensing threshold for independent power producers, which was raised from 1MW to 100MW in 2021, has now been removed completely which means that private investors in electricity generation projects will, in most instances, not require licences. All new generation projects will, however, still have to register with the National Energy Regulator of SA (NERSA) and comply with technical requirements for grid connection and environmental legislation.
This was one of the key measures announced by President Cyril Ramaphosa as part of government’s “action plan to end load-shedding”.
Santosh Sookgrim, senior technical adviser at the SA Wind Energy Association, told Business Day that since the announcement last year, they saw for the first time that the market was “seriously planning large scale wind energy projects for private procurement”.
“We are confident that the market will see accelerated growth of wind projects for both public and private procurement,” he said.
There are already 34 wind energy projects operating in SA amounting to 3.4GW and the industry expects about 12GW to be added over the next eight years.
Dr Rethabile Melamu, CEO of the SA Photovoltaic Industry Association SAPVIA), said they expected to see solar energy generation projects exceeding the previous 100MW limit to be registered in the NERSA database from the second or third quarter of this year which would further increase the rate of new generation capacity.
The capacity of solar PV initiatives, outside government’s renewable energy procurement programmes, registered with NERSA increased by 1200MW since the fourth quarter of 2021. The included a 33% increase in the number of projects registered year-on-year in the third quarter of 2022.
“This growth has been catalysed by recent regulatory reforms that led to removal of licencing threshold for embedded projects and mostly championed by members of SAPVIA that are keen to address load-shedding challenges and the current generation shortfall.
The current installed and operational capacity for solar sits at approximately 4.9GW. The installed capacity is projected to grow by up to 10GW in the next five years.
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