Move to decentralise electricity sector lauded
Renewable energy industry body, the South African Wind Energy Association (SAWEA), has come out in support of the recent request by the Department of Energy for regulator Nersa to license businesses to generate power and feed it into the national grid.
Addressing Africa Utility Week this week, energy minister Jeff Radebe indicated government is looking to drive embedded generation technology.
Small-scale embedded generation (SSEG) refers to power generation facilities, located at residential, commercial or industrial sites, where electricity is generally also consumed.
These are mainly solar photovoltaic systems but include other technologies such as wind and biogas.
Energy costs are rising in SA, putting businesses and households under pressure. Electricity prices increased in SA from 1 April. In March, Nersa said it had granted power utility Eskom the following tariff increases over the next three years: 9.41% or allowed revenue of R206.34 billion for 2019/2020, 8.10% or allowed revenue of R221.8 billion for 2020/2021, and 5.83% or allowed revenue of R233.1 billion for 2021/2022.
"We have developed a framework under various amendments to Schedule 2 of the Electricity Regulation Act, relating to circumstances under which a generation licence may not be required," said Radebe.
Nersa has called for public comments prior to concurring to government's proposals.
This commendable step by the minister will contribute to further decentralisation and democratisation of the South African electricity sector, says SAWEA.
It will open the market to smaller-scale renewable energy projects with a significant level of local ownership, it adds.
"The small-scale embedded generation market has the potential to support the industrialisation efforts stimulated by the Renewable Energy Independent Power Producer Procurement Programme (REI4P) and contribute to job creation," says Ntombifuthi Ntuli, SAWEA board member and research group leader for energy industry at the CSIR Energy Centre.
A recent SAWEA study that investigated the value proposition of distributed generation renewable energy estimated the job creation potential for wind energy SSEG projects at 207 jobs during one year of construction and 127 permanent jobs during operations, for a combined capacity of 50MW projects.
The industry body says if the wind industry deploys 50MW per annum over a 10-year period, it can create 4 840 jobs. This is over and above the jobs created in the REI4P market segment.
The study estimated that between 40MW and 75MW per annum could be generated from behind-the-meter grid-tied wind energy projects, while it estimated 135MW per annum for projects wheeling electricity from remote wind energy sites.
According to SAWEA, this could plug the demand gaps created by the stop-start nature of the REI4P and create a certain level of continuity in the renewable energy market.