Engineering News

The National Energy Regulator of South Africa (Nersa) has refused to concur with two electricity procurement determinations submitted by the Department of Mineral Resources and Energy (DMRE) under Section 34 of the Energy Regulation Act – including one for a 3 000 MW Combined Cycle Gas Technology (CCGT) project that Eskom plans to develop in Richards Bay, KwaZulu-Natal.

Earlier this year, the DMRE submitted three determinations for the regulator’s concurrence, which is required before public procurement can take place, including:

• a determination for the procurement of 1 000 MW of new generation capacity from technologies such as landfill, biogas and co-generators;
• the procurement of 14 791 MW of new generation capacity from renewables and storage by independent power producers; and
• a determination for the procurement of 3 000 MW of new CCGT.

During a meeting on December 14, the Energy Regulator voted against concurring with the 1 000 MW determination or the 3 000 MW of CCGT, while approving the determination for 14 791 MW of new generation capacity from renewables and storage in line with the Integrated Resource Plan of 2019 (IRP 2019).

Concurrence was not provided for the 1 000 MW on the basis that a Section 34 determination was the incorrect instrument, as the energy could be procured by Eskom under a Short-Term Power Procurement Programme (STPPP) and the costs recouped through the tariff.

The Energy Regulator made the decision despite the previous STPPP having been mothballed partly because Nersa had refused to treat it as a pass-through cost when making Eskom revenue determinations.

The 3 000 MW CCGT determination was also rejected on the basis that a request to deviate from the IRP 2019 should be pursued as a Section 34 determination.

In its reasons for decision, which were not immediately shared, Nersa would reportedly make a recommendation for the approval to be sought using another section of the Act.