By: Kaya 959 News
President Cyril Ramaphosa announced an amendment of Schedule 2 of the Electricity Act that will effectively see an end to load shedding.
Addressing the National Council of Provinces yesterday ((THURS)) he said the amendment will increase the NERSA licensing threshold from 1MW to 100MW for embedded generation projects.
“This intervention reflects our determination to take the necessary action to achieve energy security and reduce the impact of load shedding on businesses and households across the country,” Ramaphosa said.
He said it is evidence of the government’s intention to tackle this economic crisis head-on, by implementing major economic reforms that will transform the economy.
Ramaphosa said generators will also be allowed to wheel electricity through the transmission grid, subject to wheeling charges and connection agreements with Eskom or the relevant municipality.
“However, generation projects will still need to obtain a grid connection permit to ensure that they meet all of the requirements for grid compliance,” he said
Generators will be allowed to sell electricity to one or more end-use customers, on the condition that they are registered and have secured grid connection approval.
This intervention is undertaken within the broader context of electricity industry reforms currently underway. The raising of the licensing threshold is expected to unlock significant investment in new generation capacity in the short and medium term.
“This decision reflects our determination to take the necessary action to achieve energy security and reduce the impact of load shedding on businesses and households across the country,” he said.
Yesterday, Eskom announced Stage 3 load shedding from 8am until 10pm. It said this was due to further breakdowns at Kusile, Matla and Tutuka power stations.
Eskom said it had to implement Stage 3 in order to replenish emergency reserves.
President of the Durban Chamber of Commerce, and Industry NPC Nigel Ward, welcomed Ramaphosa’s announcement.
“As an organised business, we believe energy security is critical to economic prosperity. Eskom is a critical state infrastructure that cannot be allowed to fail or left to operate in disarray and fall into mismanagement, therefore improving the performance of the existing fleet of power stations, reducing debt levels, and completing its restructuring process is non-negotiable and a step in the right direction,” he said.
Ward said the Chamber believed that this amendment will diversify SA’s energy supply, reduce red tape, and create more opportunities for energy generation.
“We are optimistic that the announcement will increase investment in the South African economy, thus promoting a positive economic outlook, which will yield greater financial investment results,” he said.
City of Cape Town executive mayor, Dan Plato, said while the effects will not be felt immediately, it was a step in the right direction.
The development means that companies can build their own generation facilities to supply energy needs.
We await the final amendment to the schedule, which will be published within 60 days. This will give us a clear understanding of how municipalities will be able to access surplus power generated by these private generation projects.
Image courtesy of Pexels.