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Energy ministry and NERSA disclose new generation capacity plans for immediate future

The South African Minister of Energy, Tina Joemat-Pettersson, in consultation with the National Energy Regulator of South Africa (NERSA), have issued three new determinations, which indicate the country’s new generation capacity plan.

The new determinations were disclosed in the Government Gazette on 18 August.

According to a report issued by South African law firm Cliffe Dekker Hofmeyr, “Section 34(1)(a) of the Electricity Regulation Act, 4 of 2006 (“ERA”) allows the Minister of Energy, in consultation with the NERSA, to make Ministerial Determinations for new generation capacity if she believes that it is required to secure the continued uninterrupted supply of electricity.”

The report added: “Said Ministerial Determinations may also outline the type of energy sources from which electricity must be generated.”

The new determinations are in line with the Electricity Regulations on New Generation Capacity (published as GNR. 399 in Government Gazette No. 34262 dated 04 May 2011) (“Regulations”).

Energy ministry: New generation capacity

Gas IPP Procurement Programme 2015 and Amendment to the Baseload IPP Procurement Programme 2012 and Medium Term Risk Mitigation Project IPP Procurement Programme 2012 Determinations

This determination, removes the section relating to new generation capacity generated from gas.

The new determination states that 3,126MW of new generation capacity is to be procured through gas from 2019 to 2025.

The gas source can be from any gas type: “the new generation capacity determined […], may be generated from any gas type or source (including natural gas delivered to the power generation facility by any method including by pipeline from a natural gas field or elsewhere or an LNG based method; coal bed methane; synthesis gas or syngas; above or underground coal gasification; Shale Gas and any other gas type or source as may be considered appropriate by the procurer [Department of Energy]), and may be generated using any appropriate technology, notwithstanding that the IRP 2010 – 2030 may not have contemplated such technology or have considered it viable.”

The electricity produced from gas shall be procured through one or more IPP procurement programme, which may require cross border projects.

The generated power may only be sold to the buyer, Eskom Holdings, or by a successor, which will be designated by the Minister of Energy.

Cogeneration IPP Procurement Programme 2015 and Amendment to the Medium Term Risk Mitigation Project IPP Procurement Programme 2012 Determination

This new determination has been amended to increase energy generation capacity from 800MW to 1,800MW, which the DoE said represents “Cogen/Own Gen” supply side options.

The generation types have been amended to include:

  • Waste heat or furnace off gas,
  • Cogeneration (i.e. the simultaneous generation of electricity and useful thermal energy from a common fuel source), and
  • An energy source which is a co-product, by-product, waste product or residual product of an industrial process and or sustainable agricultural or forestry activity.

The procurement of generated power from the above mentioned energy sources, will be procured through one or more IPP procurement programmes.

Renewable Energy IPP Procurement Programme 2015

According to Cliffie Dekker Hofmeyr, this new determination outlines that 6,300MW are to be procured from renewable energy sources.

  • Onshore wind 3,040MW
  • CSP 600MW
  • Solar photovoltaic 2,200MW
  • Small Hydro 60MW
  • Biomass 150MW
  • Biogas 50MW
  • Small Project 200MW