CAPE TOWN – Energy experts said that the proposed amendments to the electricity regulations would pay great dividends in the long run.
After years of delays, President Cyril Ramaphosa on Thursday announced a major step forward for independent power production.
The amendment will allow independents to produce up to 100MW of power without having to go through a long drawn-out licencing process.
They’ll even be able to sell back electricity into the grid, providing they acquire a permit from the National Energy Regulator of South Africa (Nersa).
Government’s announcement came on the back of a fresh round of rolling power cuts and repeated warnings from Eskom that power supply would remain constrained for the foreseeable future.
The amendment will make it easier for independent power producers to make electricity and sell it into the grid.
Government has been under intense pressure to open up the power market and energy economist, Lungile Mashele, said that the expansion of embedded generation puts a plan in place to help reduce Eskom’s load requirements.
“It is probably the best plan that helps Eskom both with their financial problems but also with their lack of capacity as well.”
The president promised that the amendment would be published within 60 days – after that there were still a great many details to be ironed out.
But energy experts like Ted Blom are warning not to expect a miraculous turnaround immediately.
“For the guys who have the resources, it can happen in 60 to 90 days. For those who have to go through the rigmarole of changing their business plan and applying for funding, it could take a lot longer.”
The amendment will also allow municipalities to customise their power mix and procure electricity directly from independent power producers.
But this too will take time as they’ll need to comply with various environmental and safety regulations.