The South African Wind Energy Association (SAWEA) sees the publication of the amendments to Schedule 2 of the Electricity Act as a sure indication that the government is serious about driving investment into the energy generation sector to support growth and diversify generation sources away from a single risk entity.
Minister of Mineral Resources and Energy Gwede Mantashe, yesterday gazetted the amendments which lift the generation threshold for private companies to generate up to 100MW of electricity for own use and to sell excess energy back to the grid.
The amendments also removed reference to a “single customer” and focused on “an end-user customer” which could be interpreted as a move away from singular to multiple.
Ntombifuthi Ntuli, the SAWEA CEO, said: “This announcement means that the industry can now easily enter into Power Purchase Agreements with private entities, especially intensive energy users (IEUs) and deliver projects quickly, which will stimulate economic recovery.
“However, as with any legislation, there are elements left open for interpretation and will require clarity. Hence, we will continue to engage with the DMRE.”
It has been reported that large companies, mines and farms are believed to have up to 5,000MW in pent-up projects, which could be released if licencing requirements were lifted, said SAWEA in a press release.
Independent Power Producers have reported that several mining houses and other IEUs have reached out to the industry, asking about projects that are ready for procurement. SAWEA interprets this as a clear intention to procure clean energy from the wind sector.
SAWEA believes lifting the threshold will allow IEUs, which make up a significant portion of the South African GDP, to establish new generation capacity that could stimulate the economy as well as free up the Electricity Availability Factor.