Electricity and Control June 2020

DRIVES, MOTORS + SWITCHGEAR : PRODUCTS + SERVICES ENERGY MANAGEMENT + THE INDUSTRIAL ENVIRONMENT

Schedule 2 of the Electricity Regulation Act (ERA). These problematic amendments came into effect in 2017.

At a glance ■  Our economic recovery depends on the sustainable, affordable and reliable supply of energy. ■  The photovoltaic industry in South Africa supports both the state-run utility model and the integration of distributed generation methodologies. ■  SAPVIA calls for lifting of the licensing exemption threshold for distributed power generation from 1 MW to 10 MW and streamlining of the licensing process.

“There are three main issues: • The Integrated Resource Plan (IRP) does not explicitly spell out the allocation for Distributed Generation projects over the next four years. Without a clear allocation, the energy regulator does not have a clear mandate to grant licences to entities wanting to generate electricity outside of the proposed state procurement process. • Schedule 2 imposes a 1 MW threshold for licensing exemption, which makes the development of projects up to 10 MW impractical for small and medium sized businesses. • Projects with a generating capacity of just over 1 MW must endure the same onerous application process as large-scale projects. Both require a public participation process and hearings on a per project basis. “Under normal circumstances, NERSA can take more than four months to process applications for registration; licensing can take six months to a year, despite the 120- day period described in the Act. As a consequence, many companies are incentivised to reduce the size of their projects to avoid a lengthy application process. “Although we support the goals of the ERA, the legislation’s generation licensing requirement does little to ensure that connections to the network are safe and orderly. In fact, there are other legal mechanisms in place to regulate the operation of electricity infrastructure. For instance, over and above the distribution code, most municipalities would have established electricity by-laws to protect their local networks. In addition, the Department of Mineral Resources

and Energy (DMRE) has a registration system to determine how many megawatts of Distributed Generation are allowed to enter the network. “The limitations imposed by Schedule 2 of the ERA are weighing heavily on our industry at a time when the country is in a crisis. Nevertheless, we are confident that by working together with the government, we will be able to power the economy back to life. This is why we are calling for an urgent meeting with your administration to plot a way forward.” Schnabel closes in writing, “Mr President, we urge you to consider the following proposals: • Lift the licensing exemption threshold from 1 MW to 10 MW. • Make it a requirement for projects to register with the regulator by submitting an independent certificate of compliance against which the allocation to embedded generation can be measured, and ensure that the database of installed megawatts is public and updated. • Ensure there are clear guidelines on how to obtain a generation licence for projects above 10 MW in size. • Ensure that NERSA has the resources and capacity to process applications timeously and efficiently. “Mr President, we need urgent interventions from your government to drive growth in the energy sector. The solar PV Industry stands with you to fight the Covid-19 pandemic and commits to participate positively in the recovery of the economy. As an industry we will continue to engage with you so that we can get our economy moving again.” □

The solar PV installation at Old Mutual’s head office in Cape Town.

For more information visit: www.sapvia.com.za

Wido Schnabel, Chairperson of SAPVIA.

Electricity + Control JUNE 2020

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