South African Companies Now Allowed To Generate Up To 100 MW Without Applying For Generation License

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South Africa’s President Cyril Ramaphosa has just announced that the threshold for companies to produce their own electricity without a licence will now be increased from the current 1 MW to 100 MW. Generation projects will still need to obtain a grid connection permit to ensure that they meet all of the requirements for grid compliance.

In a surprise but very welcome move, the new threshold, which had previously been set at 10 MW in the Draft Schedule 2 to the Electricity Act, will catalyze private sector investment into the electricity sector. This move will go a long way in relieving pressure on Eskom and the government and is the quickest route to plugging the country’s massive deficit in the electricity generation sector.

South Africa’s current installed generation capacity is about 50 GW, made up of mostly old coal plants. Just yesterday, Eskom, the national utility company, announced it was implementing Stage 4 load-shedding to manage the generation shortfall on the day. Eskom’s load-shedding program is structured in “Stages” where Eskom sheds a certain quantum of load from the grid to stabilize the grid.

So, depending on the severity of the crisis, load-shedding is implemented in stages from Stage 1 to Stage 8, where Stage 1 sheds 1000 MW of load from the grid and in a Stage 8 scenario, Eskom takes out 8,000 MW of load from the grid. Load-shedding is implemented over 2-hour or 4-hour blocks on a rotational basis depending on the severity of the crises. Stage 8, however means most consumers will experience a blackout for about 12 hours. As of yesterday, breakdowns at Eskom’s plants in total were adding up to a massive 15,087 MW! A further 1,273 MW was out of service for planned maintenance.

The process of obtaining a generation license for PV plants above 1 MW for the commercial and industrial segment had been a long and complicated one, slowing town the adoption of solar by large energy consumers. The new threshold removes this burden and opens up a huge segment in the solar industry. Large factories such as large cement factories, data centers, mines, shopping malls, and universities can now build their own power plants to compliment what they currently get from the grid.

Source: Clean technica