Mineral Resources and Energy Minister Gwede Mantashe
Photo by: Creamer Media Chief Photographer Donna Slater
The National Energy Regulator of South Africa (Nersa) is seeking public comment on electricity procurement determinations received from Mineral Resources and Energy Minister Gwede Mantashe that are intended to open the way for Eskom to procure new emergency and cross-border capacity.
Mantashe has granted Eskom an exemption from the Electricity Regulations on New Generation Capacity to proceed with all three procurement programmes, which have been named the cross-border procurement programme, the loadshedding reduction programme and the emergency procurement programme respectively.
In a letter to the regulator dated January 31, 2023, Mantashe said the exemption granted to Eskom for the programmes is to enable the utility to “expeditiously deliver the much-needed generation capacity”.
He also noted that Eskom will be applying to the National Treasury for various other procurement related exemptions, but that there is an expectation that the programmes will comply with all other relevant legal prescripts.
The determinations have been submitted under Section 34 of the Electricity Regulation Act, and are required to enable procurement in line with allocations outlined in the current Integrated Resources Plan (the IRP 2019), or to exempt such procurement from the IRP 2019. The regulator’s concurrence is also required before procurement can proceed.
The consultation paper released by Nersa indicates that Mantashe is proposing that Eskom procures the following capacity “to address the current energy crisis and contribute towards energy security”:
- up to 1 000 MW of cross-border capacity from a range of energy producers, including utilities or independent power producers in the Southern African region;
- up to 2 000 MW of new generation capacity under the loadshedding reduction programme from a range of energy technologies in accordance with the short-term risk mitigation capacity allocated for the years 2025 to 2028 in the IRP 2019;
- Up to 800 MW of new generation capacity from a range of energy technologies in accordance with the ‘Emergency Generation Procurement Programme’ for the years 2029 to 2030 outlined in the IRP 2019.
A separate consultation paper has also been released to enable Eskom to procure 344.5 MW of new generation and storage capacity, comprising:
- 75 MW of solar photovoltaic (PV), to be located at the Lethabo power station in the Free State;
- 19.5 MW of solar PV, to be located in Sere in the Western Cape;
- 100 MW of solar PV, to be located at the Komati power station, in Mpumalanga; and
- 150 MW of battery energy storage at the Komati power station.
Both consultation papers are available on Nersa’s website and stakeholders have been given until March 15 to submit written comments on the ministerial determination.
The determinations appear to be in line with the ‘Road to End Loadshedding’ released by the National Energy Crisis Committee in January, as well as President Cyril Ramaphosa State of the National Address in which he announced that Eskom would “procure emergency power that can be deployed within six months to close the immediate gap”.
The loadshedding reduction programme, in particular, also again raises the prospect for the entry of powerships, which have so far failed to progress under the risk mitigation procurement programme.