According to energy experts, the proposed amendments to the electricity regulations will pay great dividends in the long run. After many years of delays, President Cyril Ramaphosa announced a major step forward for independent power production. This amendment will allow independent contractors to produce up to 100MW of power without having to go through a long-drawn-out licencing process.
They’ll even be able to sell back electricity into the grid, providing they acquire the necessary permit from the National Energy Regulator of South Africa (Nersa). The Government’s announcement came on the back of a fresh round of rolling power cuts and repeated warnings from Eskom that power supply would remain constrained for the foreseeable future.
The amendment will pave the way for independent power producers to make electricity and sell it into the grid. The Government has been under intense pressure to open up the power market and energy economist, Lungile Mashele, said that the expansion of embedded generation puts a plan in place to help reduce Eskom’s load requirements.
“It is probably the best plan that helps Eskom both with their financial problems but also with their lack of capacity as well.”
Ramaphosa promised that the amendment would be published within 60 days – after that, there were still a great many details to be ironed out. Energy experts like Ted Blom are warning not to expect a miraculous turnaround immediately.
“For the guys who have the resources, it can happen in 60 to 90 days. For those who have to go through the rigmarole of changing their business plan and applying for funding, it could take a lot longer.”
The amendment will allow municipalities to customise their power mix and procure electricity directly from independent power producers. Unfortunately, this will take time, but there is light at the end of the tunnel.