South Africa raises threshold for distributed generation to 100 MW

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South Africa‘s government has officially raised the licensing threshold for embedded generation projects from 1 MW to 100 MW.

The new measure – schedule 2 of the Electricity Regulation Act [ERA] – was published in the country's official journal on Friday.

“The amendment follows President [Cyril] Ramaphosa’s announcement on June 10, 2021, that the schedule 2 amendment of the ERA would be published within 60 days,” the government said in a statement. “The amendment serves to increase the threshold for embedded generation from the current 1 MW, to 100 MW, without the need for a license.”

Project developers will be exempted from applying for a license but they will be required to register with the National Energy Regulator of South Africa (NERSA).

The government said the new provisions are aimed at unlocking significant investment in new generation capacity in the short to medium term and helping the country reduce the impact of load shedding.

It will likely finally help the country build large scale unsubsidized wind and solar plants outside the Renewable Energy Independent Power Producer Procurement Program (REIPPPP), which provided strong growth in the last decade but has failed to provide significant volumes into the current one.

South Africa is seeking to reduce dependence on its state-owned utility, Eskom, for power supply. The troubled utility, which is currently unable to meet the country's power demand due to financial and operational issues, recently began considering renewables for its plant portfolio.

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