Solar industry wants clarity on generation capacity

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The draft regulations on generation capacity continue to fall short of addressing municipalities’ needs.

This is the response from SA’s solar photovoltaic (PV) industry, as the period for public comment on the draft regulations closed at the end of last month.

At the start of May, mineral resources and energy minister Gwede Mantashe gazetted draft amendments to the electricity regulations on new generation capacity which aims to clarify the regulatory regimes that apply to municipalities for procurement or development of power generation capacity.

The public had 30 days from the date of gazette to provide comments.

“The South African Photovoltaic Industry Association (SAPVIA) is pleased to see the implementation of president [Cyril] Ramaphosa’s announcement as delivered in his 2020 SONA speech,” says SAPVIA COO Niveshen Govender.

Among a raft of measures to stabilise SA’s electricity needs, Ramaphosa indicated that renewable energy can be the answer to the country’s energy supply needs.

The City of Cape Town is pursuing a long-held ambition to procure its own electricity from renewable energy independent power producers (IPPs).

The city sued the energy ministry and the National Energy Regulator of SA to obtain the right to procure its energy in a case that could pave the way for other municipalities to do the same.

Power utility Eskom provides about 95% of SA’s power needs. However, the state-owned company has, from time to time, failed to meet demand, leading to rolling blackouts across the country.

On the positive side, last month the company said the risk of load-shedding this winter was significantly reduced due to Eskom’s aggressive short-term maintenance drive during the COVID-19 lockdown.

“The solar industry is eager for clarification as the Draft New Generation Capacity Regulations continues to fall short of addressing municipalities’ needs as demonstrated in the court proceedings between the City of Cape Town and the Gauteng High Court.”

According to SAPVIA, the regulations allow a municipality to apply to the minister of mineral resources and energy for a determination in terms of Section 34 of the Electricity Regulation Act and require that this determination must be made in accordance with the national Integrated Resource Plan (IRP) for electricity.

The City of Cape Town is contesting that it does not require a Section 34 determination but that it is free to generate and procure energy from IPPs in terms of their own energy planning and not only in terms of national prescripts.

For any government procurement programme for utility-scale projects, SAPVIA says it supports the central procurement through the IPP Office but recommends the removal of caps on private embedded generation to allow the market to procure these projects in a safe and legal manner with no cost and at the highest speed for the state.

The renewable energy body says allocation for private procurement should not be sterilised by state procurement.

“The current determination is not clear on what allocation will be left for distributed generation under IRP but private procurement is far quicker and less costly,” says SAPVIA.

“There is a risk that the 2 000MW will not be enough to deal effectively with the challenges of load-shedding. Another risk is that the full 2 000MW allocation in the IRP will be assigned to a public procurement programme, thereby destroying the own use generation market and thousands of jobs,” it adds.

“We believe that the following assumptions regarding the energy availability factor were incorrect and the supply shortfall is in fact nearly double what was assumed. In this case, these allocations will not be sufficient to ensure security of supply in the short- and medium-term,” says Govender.

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