Independent power producer (IPP) G7 Renewable Energies announced on Thursday it has withdrawn its high court review application against Eskom’s interim grid capacity allocation rules.
“Subsequent to further meaningful industry engagements, the parties have agreed to an amicable resolution of the dispute,” G7 said.
These engagements, the company said, have resulted in an adjustment to the manner in which the grid access queuing rules will be implemented and have provided much-needed clarity to the process.
The high court in Johannesburg dismissed an application in July brought by G7 to interdict Eskom from implementing the interim grid capacity allocation rules it published in June.
However, at the time, the court did not decide on the second part of G7’s application, where it wanted the court to review and set aside the grid-queuing rules.
This part of the application was set to be heard on September, but now that it has been withdrawn, Eskom can continue to implement the new rules that came into effect on June 27.
The grid capacity allocation rules have been put in place in response to calls from independent power producers that have long been calling on Eskom to ensure fair access to the grid and to help reduce the delays in allocating grid capacity to renewable energy projects.
Grid access has become one of the largest constraints to the rolling out of new generation projects needed to end SA’s electricity crisis.
In the Cape provinces, which offer the best potential for solar and wind power generation, Eskom has almost completely run out of available grid capacity to connect new projects.
The interim rules suggest a “first-ready-first-served principle” — instead of the first-come-first-served approach previously — in which Eskom allocates grid capacity based on “a demonstrated readiness of the project”.
This approach, Eskom believes, will help prevent situations where projects that have been allocated grid capacity, but then struggle to reach a point where they can start construction, can hold on to that grid access indefinitely.
The rules also give Eskom the right to set aside allocations for public procurement programmes. This would help to level the playing field between IPP projects that are developed for government-backed public procurement projects that come with specific requirements for local content thresholds and social development investment, and private sector projects that do not face the same requirements.
However, these projects would still have to adhere to specified timelines or risk forfeiting grid allocation.
G7 referred Business Day’s questions about adjustments to the implementation of the grid allocation rules to Eskom.
Eskom did not respond to questions at the time of going to print.
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