Trade union Solidarity has placed the blame of the ongoing power crisis in South Africa squarely at the door of the Energy Regulator of SA (Nersa) for allegedly issuing very few licences to private electricity generators who could plug the power deficit.
Solidarity yesterday initiated legal action against Nersa in a bid to remove all perceived bottlenecks in the way of private energy suppliers.
Nersa is a regulatory authority mandated to regulate the electricity, piped-gas and petroleum pipeline industries in the public interest in terms of relevant legislation.
Nersa’s mandate thus includes facilitating security of supply, investment in and access to infrastructure in the energy industry, and promoting competitive and efficient functioning of the energy industry.
However, Solidarity prefers less state regulation and more private service delivery.
In the application, Solidarity demands, among others, that it be furnished with information about the number of applications for private power generation that Nersa has received.
Solidarity CEO Dirk Hermann said they were also demanding to know how long approval of such applications takes, and for Nersa to account for why no guidelines on feed-in and wheeling tariffs have been published to date.
“The first step is to force Nersa through a disclosure process to disclose information about why so few licences have been awarded to private generators of power and so few private generation licences have been granted,” Hermann said.
“Based on this information it will be possible to determine where the bottlenecks lie and what further steps need to be taken to remove these bottlenecks.”
Herman said through their application, they wanted to enable everyone, especially entrepreneurs who want to generate power to empower them to do so.
However, he said they cannot expect entrepreneurs to make huge investments if they do not have the ability to estimate the return on such investments.
“We therefore lack clear, reliable guidelines that make it possible to calculate such risk,” Hermann said.
Nersa was asked to confirm whether it had received Solidarity’s application and whether it would oppose it or furnish Solidarity with the requested information, but it had not responded at the time of publication.
However, independent energy analyst Lungile Mashele pointed out that Nersa did publish these reports on a regular basis.
Mashele pointed to the latest approval of a further 16 distributed generation projects with a combined capacity of 211MW and a collective investment value of R3.65 billion that Nersa registered in June, 2022.
This was part of the reforms announced jointly by President Cyril Ramaphosa and Mineral Resources and Energy Minister Gwede Mantashe in June, 2021 which opened the way for projects below 100MW to proceed without a licence from a previous threshold of 1MW, even when such facilities wheel electricity through the grid and sell to non-related customers.
Mashele said Nersa had cited issues related to the quality of submissions for delays in registration of generation projects.
However, she said that the country would not get very far with 100MW projects.
“This is not really an impediment, but honestly this is about making money. Many people want to make money by selling electricity to Eskom/municipalities by using their roofs,” Mashele said.
“Nersa should answer on the feed in tariff discussion, this is expected mid-February but this is an important chat for people who want to sell back to Eskom/municipalities. Currently the feed in rate is set at the tariff you buy at. Also the infrastructure for this bidirectional metering is not there,” she said.
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