Gwede Mantashe. Picture: GCIS
Gwede Mantashe. Picture: GCIS

Mineral resources & energy minister Gwede Mantashe has  gazetted the amendment to schedule two of the Electricity Regulation Act.

Though the relaxation of licensing requirements for unconnected generation and standby generation is welcomed, the minister’s failure to increase the limit for grid-connected self-generation from 1MW to 10MW before requiring a licence is disappointing.

This is a missed opportunity. Industry and energy experts have long indicated that such a move would have a significant impact on electricity demand, and would have encouraged businesses to develop their own resources to generate electricity.

It is estimated that it would free up 1,000-2,000MW in the short term. Additionally, Mantashe again limits and restricts wheeling and cogeneration, with the department citing the need to know who is connected to the grid and whereas the rationale for such requirements.

Furthermore, the requirement that all grid-connected self-generation (such as rooftop solar panels) be registered (though not necessarily licensed) inhibits the take up of such systems by those who can afford them, as the red tape and costs associated with registration make it inconvenient, expensive and unnecessarily bureaucratic.

Instead of encouraging and incentivising small-scale embedded generation, the minister Mantashe continues to impede its rollout, and penalise those who would ease the burden on the state.

The national energy regulator of SA (Nersa) has been notoriously slow in issuing licences and is considered an obstacle in the path of urgent procurement of generation capacity to ease the burden of rolling blackouts caused by Eskom failures.

All of the above further emphasises the urgent need to adopt the DA’s Independent Electricity Management Operator Bill, which would take the grid out of Eskom’s hands and place it in those of a neutral party, thus levelling the playing field, creating competition and allowing more independence in power production.

In the aftermath of the Covid-19 pandemic we will need to do everything possible to bolster our economy. One of the ways SA can do this is by easing the regulatory framework around electricity generation, and encouraging as much self-generation as we can.

Bongisa Mhaga
DA, national press officer, communications