South Africa has eased regulations govening small-scale power producers as part of efforts to tackle the country’s energy problems, but industry experts said the changes did not go far enough.
Companies of all sizes have been clamouring for government to reduce red tape preventing them from building their own generating facilities, since state utility Eskom has had to implement frequent nationwide power cuts and has raised tariffs steeply over the past decade.
The country’s mining industry alone says it could bring up to 1,500 MW of capacity online in the next few years with the right regulations in place.
Energy minister Gwede Mantashe on Thursday tweaked regulations for generators with a capacity of less than 1 megawatt (MW), effectively exempting them from the need to obtain a licence from the regulator, but the exemption did not include larger generating facilities.
Mantashe’s ministry said on Friday the changes meant “regulatory hurdles previously experienced have been addressed” and cited comments by President Cyril Ramaphosa that the government wanted to “significantly change the trajectory of energy generation in our country”.
But energy experts said Mantashe’s amendment was a missed opportunity.
They had hoped facilities with a capacity of up to 10 MW would be exempt from the need for a licence, which can be difficult to obtain and relatively few have been issued.
“It is extremely disappointing and not in line with the statements the minister and the president made publicly. There is effectively no change,” energy expert Chris Yelland said of Mantashe’s amendment.
In a 2017 amendment, a former energy minister had exempted generators under 1 MW from the need to obtain a licence under a different set of circumstances.
Mantashe’s ministry also said that since a long-term energy plan released last year contained an allocation for distributed generation, generators of 1 MW and above were catered for. They will no longer need ministerial approval to build those generators, just a licence from the regulator Nersa.
But Anton Eberhard, a University of Cape Town professor who has advised Ramaphosa on energy policy, said that did not go far enough.
“These new regulations could have exempted generators less than 10 MW rather than only less than 1 MW from Nersa licensing. This would have freed up a huge pipeline of projects wanting to feed back into the grid or supply other customers,” Eberhard wrote on Twitter.
Reporting by Tanisha Heiberg and Alexander Winning. by Jane Merriman