HomeIndustry SectorsFinance and PolicyDMRE gives notice to raise embedded generation threshold to 10MW

DMRE gives notice to raise embedded generation threshold to 10MW

The South African Minister of Mineral Resources and Energy on Friday last week released a notice in the government gazette of his intent to raise the threshold for embedded generation from 1MW to 10MW.

While this advance in legislation will be welcomed by businesses anxious to generate their own electricity to deal with Eskom’s intermittent supply, the caveat of licencing through the National Energy Regulator of South Africa (NERSA) remains.

In addition to raising the threshold for embedded generation to 10MW though, the notice also says anyone operating a generation facility on this scale will still have to register with NERSA.

Signed by Minister Gwede Mantashe, the notice gives interested persons or organisations 30 days to provide written comment on the proposed amendments to the Licensing Exemption and Registration Notice.

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Embedded generation has in recent years become a much-discussed topic in South Africa amongst business owners desperate to ensure a steady supply of electricity to keep their businesses running. This mirrors conversations worldwide as the energy landscape turns to distributed energy systems to keep the lights on.

At the beginning of 2020, the South African Bureau of Standards approved new standards developed by the Council for Scientific and Industrial Research, written with help from PEC Engineers (a subsidiary of POWER Engineers Incorporated). These standards and guidelines apply to installations up to 1MW and address the need for distributed systems to support grid reliability in the case of storms and accidents that cause unplanned outages.

When Mantashe announced the preferred bidders for the Risk Mitigation Independent Power Producers Procurement Programme in March this year, he referred to President Cyril Ramaphosa’s State of the Nation Address 2021 during which he spoke about the DMRE’s measures to address South Africa’s energy shortages.

These included easing requirements and processes for own use, which may seem complicated on the surface by the insistence on a NERSA licence for the embedded generation, but Mantashe did also mention a different option.

At the time he pointed out people who want to do self-generation for their own use, don’t need a licence and there is no limit. “What triggers the licence requirement is connection to the grid, and trading your surplus.”

Details for making a written submission about the notice are available online.

Theresa Smith
Theresa Smith is a Content Specialist for ESI Africa.