Mineral Resources and Energy Minister Gwede Mantashe announced on Wednesday that the Section 34 Ministerial Determinations required to give effect to the Integrated Resource Plan 2019 (IRP 2019) had been finalised and were currently serving before the National Energy Regulator of South Africa (Nersa) in order to secure the regulator's concurrence.
Addressing lawmakers in the debate on President Cyril Ramaphosa’s 2020 State of the Nation Address, Mantashe also announced that the Department of Mineral Resources and Energy (DMRE) had received 481 responses to its request for information (RFI) for supply and demand solutions to close an immediate supply shortfall of 2 000 MW and that a Section 34 Determination for emergency power procurement had also been finalised and also awaited Nersa's concurrence.
“Section 34 Determinations to implement the IRP 2019 are finalised and await concurrence of Nersa. This will also enable opening of bid windows for the renewable energy power procurement and support further investment in the sector.”
The Minister provided no timeframes for the receipt of Nersa’s concurrence, nor did he indicate whether such concurrence could arise, as has been reported, only after a public comment period.
He stressed, however, that the DMRE would be guided strictly by the IRP 2019 in its procurement programmes. Besides the emergency programme, the IRP 2019 outlines that South Africa will procure 14 400 MW of new wind, 6 000 MW of new solar photovoltaic, 2 088 MW of energy storage, 2 500 MW of imported hydro, 3 000 MW of gas and 1 500 MW of new coal by 2030.
The document also catered for distributed generation investments, which meant such projects could proceed in the absence of any deviation notice from the Minister.
With regards to the procurement of emergency power from projects that could deliver electricity into the grid within three to 12 months from approval, Mantashe said the RFI had helped the DMRE assess the availability of immediate implementable generation options and the commercial terms expected for these projects.
"We received 481 responses, which include energy supply options and demand side management options for gas, liquid fuels, coal, renewables, storage and nuclear. Preliminary analysis is that some proposals can bring power to the grid in less than 24 months. It also suggests that longer-term contracting is required to ensure prices do not negatively affect the current tariffs."
Mantashe also announced an easing of limitations on licensing of generation for own use of above 1 MW, which he said would mainly be used to supplement power supply to commercial and industrial customers including the mines.
"Installed capacity above 1 MW is unlimited. Since May 2019, Nersa has received 18 applications, totalling 116 MW, in this category. Most of them are incomplete because they lack power purchase agreements, which is a requirement to show who the consumer of the power is and to indicate connection agreements for consumers still dependent on the national grid."
For those that were complete, Nersa would move to license the plants within the prescribed licensing timeline of 120 days.
"We met and agreed with Business Unity South Africa and Black Business Council representatives to establish a working group, led by a deputy director-general, to remove the hurdles to some of the energy projects," Mantashe announced.
He also reaffirmed that licensing requirements for generation for own-use from facilities under 1 MW had been removed.
"Nersa has received 132 applications in this category, with a total capacity of 59 MW. Of these, 75 applications with total capacity of 42 MW are approved. The remaining 57 applications with a total capacity of 16 MW are being processed. On average, Nersa takes 38 working days to process applications for registration."
To speed up the process of addressing the power generation deficiency, the Minister said that municipalities were enabled to buy power from sources other than Eskom, or to develop their own power projects for generation of own power.
"Historically metropolitan areas like Johannesburg, Pretoria, Cape Town, Mangaung and others had their own power generation capacity, largely coal driven. Advances in distributed generation technology make it viable for municipalities to create own-power generation or buy power from projects developed within their jurisdiction."