NERSA seeks 13MW from independent power producers

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Energy and mineral resources minister Gwede Mantashe.
Energy and mineral resources minister Gwede Mantashe.

Energy regulator, the National Energy Regulator of South Africa (NERSA), has published two draft determinations by minerals and energy minister Gwede Mantashe in terms of Section 34 (1) of the Electricity Regulation Act.

During his State of the Nation Address earlier this year, president Cyril Ramaphosa said in order for SA to rapidly and significantly increase generation capacity outside of Eskom, a Section 34 ministerial determination will be issued to give effect to the Integrated Resource Plan (IRP) 2019, enabling the development of additional grid capacity from renewable energy, among other energy sources.

In its first draft, NERSA says 2 000 megawatts (MW) should be procured from a range of energy source technologies in accordance with the short-term risk between 2019 and 2022.

The second draft determination seeks to procure an additional 11 813MW between 2022 and 2027.

These ministerial determinations are the first step in the process of procurement of new electricity generation capacity in SA totalling 13 813MW from independent power producers.

Energy and minerals minister Gwede Mantashe last month said NERSA has already approved 75 applications from private companies wanting to generate energy for self-use.

This, as power utility Eskom is struggling to keep the lights on in the country, with the company recently implementing further bouts of load-shedding.

In a statement yesterday, Eskom said it does not expect to implement load-shedding today, but the possibility that load-shedding may be implemented remains. The system remains constrained and vulnerable, says the state-owned company.

Reacting to the publishing of the ministerial determinations, renewable industry body, the South African Wind Energy Association (SAWEA), says NERSA published two consultation papers on 18 March for two separate ministerial determinations submitted by energy minister Mantashe in February for the regulator’s concurrence as required under Section 34 of the Electricity Regulation Act.

SAWEA says the wind sector sees the publication of these papers as great progress as it brings it a step closer to the procurement of new generation capacity.

“As the determination gives effect to the IRP, this means the 1 600MW per annum allocated for wind energy in the IRP will now be procured,” says SAWEA CEO Ntombifuthi Ntuli.

She notes this enables the wind industry to contribute to rebuilding the economy in terms of bringing much-needed electricity into the grid, attracting investments and creating jobs.

“We foresee that once the determination process has been finalised, the government should move swiftly into announcing the request for proposals for the next bidding round.

“The last bidding round for REI4P [Renewable Energy Independent Power Producer Procurement Programme] was in 2014, and the industry has been eagerly awaiting the continuation of the programme. It would be most favourable if round five is initiated before the end of 2020.”

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