Business organisation Business Unity South Africa (Busa) applauds the statement made by Eskom CEO André de Ruyter during a webinar on February 2, in favour of lifting the licensing exemption threshold for electricity generation.
"Busa Energy structures have considered the analysis conducted by Meridian Economics and the survey conducted by EE Business Intelligence. We support the findings that up to 5 000 MW potential of private distributed generation could be unlocked if the licensing exemption threshold is lifted to 50 MW.
"In the current circumstances, this is material incremental capacity that could be sourced from the private sector," says Busa VP Martin Kingston.
Ensuring the stability and protection of the distribution grid is one of the technical requirements for distributors as part of the Grid Code compliance and is independent of the National Energy Regulator of South Africa licensing process. The same holds true for any other authorisations, such as environmental impact assessments as and when required.
"In our view, the current licensing process serves no rational purpose," says Kingston.
"Unlocking this potential is an immediate measure to enable investment in capacity that will greatly relieve the pressure on Eskom and the concomitant impact of load-shedding on the economy. This intervention will also boost economic recovery and should be implemented at the same time as other Integrated Resource Plan 2019-aligned procurement programmes."
This change to Schedule 2 of the Electricity Regulation Act (ERA) is in line with a part of the Eskom Social Compact which states that government must enable self-generation by finalising all necessary legislation expeditiously, and removing any barriers to implementation, including those in respect of wheeling for self-generation or own use, subject to licensing conditions.
This is also in line with Section 3.3 of the ERA, which requires the enabling of generation for own use, Busa states.
"Busa urges government to expedite the process to amend the schedule and lift the licensing exemption threshold from 1 MW to 50 MW. This should help to boost investor confidence and demonstrate implementation of agreed steps to improve energy security," Kingston notes.