Many people are excited about what they heard from President Cyril Ramaphosa last night during the SONA regarding the self-generation of electricity, although to a great extent he merely reaffirmed the current regulatory landscape. The benefit of him now having confirmed the registration of plants below 1MW and the licensing, within 120 days of plants larger than 1MW, gives industry an edge to enforce these statutory measures against the often laggard authorities of DMRE and NERSA. The statement that there is no limit to installed capacity above 1MW also reaffirms the position regarding the Small Scale Embedded Generation (SSEG) in the IRP 2019 which exempted SSEG from the technology generation limitations in the IRP.
The real game-changer is the firm confirmation that municipalities may now procure electricity from Independent Power Producers (IPPs) – this to a great extent obsoletes the court proceedings that City of Cape Town conducted against the then DOE (now DMRE) and NERSA. Municipalities will, however, do these procurements subject to the Municipal Finance Management Act (MFMA) which, without deviation, allows them to only enter into a purchase contract with a maximum term of 3 years.
Last night’s announcements certainly do reflect a positive change in Government’s attitude towards the valuable role that renewables play within South Africa’s current and future energy mix – we at Solareff, look forward to continuing and expanding our role in creating opportunities for businesses, individuals and even municipalities through engineered energy solutions.