South Africa’s wind energy industry, through its representative body, the South African Wind Energy Association (SAWEA) has welcomed the recently published gazette by Department of Mineral Resources and Energy (DMRE), amending Schedule 2 of the Electricity Regulation Act.
Published on Thursday 12 August 2021, the amendment effectively lifts the self-generation threshold without licencing from 1 MW to 100MW.
This announcement means that the industry can now easily enter into Power Purchase Agreements with private entities.
Ntombifuthi Ntuli, SAWEA CEO
SAWEA says the move is a sure indication of the government’s seriousness around driving investment in the energy generation sector, in order to support economic growth and diversify the generation sources away from just a single risk entity.
It has been reported that large companies, mines and farms are believed to have 5,000MW in pent-up projects, which could be released if licensing requirements were lifted.
Wind energy industry to utilise private PPAs
Independent Power Producers (IPPs) in South Africa’s wind energy industry are looking to capitalise on the new regulations energy regulations to partner with key energy consumers for long-term supply of renewable energy.
“This announcement means that the industry can now easily enter into Power Purchase Agreements with private entities, especially intensive energy users (IEUs) and deliver projects quickly, which will stimulate economic recovery,” explained Ntombifuthi Ntuli, CEO of SAWEA.
She added, “However, as with any legislation, there are elements left open for interpretation and will require clarity, hence, we will continue to engage the DMRE.”
Independent Power Producers earlier reported that several mining houses and other IEUs have reached out to the industry enquiring about projects that are ready for procurement. The Association sees this as a clear intention to procure clean energy from the wind sector.
By lifting the threshold, it will allow IEUs, which make up a significant portion of the South African GDP, to establish new generation capacity that will in turn stimulate the economy as well as free up the Electricity Availability Factor (EAF).
