As South Africa’s electricity situation continues to worsen, with the country having to endure routine power cuts for the last few weeks, the country’s Presidency is now looking to attract investment for new renewable energy projects under 100 MW for supply of electricity to its private sector.
In his weekly newsletter, President Cyril Ramphosa vowed to end the power cuts – known in South Africa as load shedding, and outlined a series of interventions his administration is working on to achieve that.
“It is difficult and unacceptable for South Africans to endure load shedding. But we are doing everything in our means to ensure that, like state capture, it soon becomes a thing of the past,” said Ramaphosa.
South Africa’s government amended Schedule 2 of the Electricity Regulation Act last year to allow private companies, and individuals to set up power generation systems of up to 100MW without the requirement to obtain a generation licence from the National Energy Regulator of South Africa (NERSA).
The cap for setting up private power generation systems without licensing was initially set at 1MW before the amendments. South Africa’s government hopes the new regulations will help improve the country’s electricity situation, and reduce the power supply burden from state utility Eskom whose ageing coal power generation fleet is failing to guarantee uninterrupted, and constant power supply.
Facilitating the development of 58 projects with 4,5GW capacity
“A joint task team comprising all relevant government departments and the private sector is working to accelerate investments in new generation projects under 100 MW,” said Ramaphosa.
“There is a pipeline of 58 projects under development with a combined capacity of 4500 MW, many of which will commence construction this year. The task team is working to speed up environmental authorisation and other approvals,” added Ramaphosa.
Ramaphosa emphasised that South Africa’s energy security can only be assured if the country can reduce reliance on a single utility for power and unlock private investment in generation capacity.
“The introduction of a competitive electricity market will unleash new investment in generation capacity and will be a key driver of economic growth,” he said.
Apart from improving the regulations for setting up of new private power generation systems, Ramaphosa’s government is also working on breaking the state utility Eskom’s monopoly on the country’s electricity market. Municipalities are now allowed to source power from private power producers. Municipalities like Cape Town and eThekwini have begun processes of procuring power from IPPs to avoid disruption of power supply in their areas.
