Legal battle over private power in South Africa

3 years ago 1

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The Solidarity Movement has launched a legal challenge against the National Energy Regulator of South Africa (Nersa), demanding it removes all bottlenecks in the way of private energy suppliers.

The organisation believes that when it comes to energy in South Africa, the future lies in less state and more private service delivery.

Solidarity chief executive Dirk Hermann explained that the country’s power supply had to be decentralised.

The first step in Solidarity’s legal case will be to force Nersa to disclose why so few licenses had been awarded to private power generators.

“Based on this information, it will be possible to determine where the bottlenecks lie and what further steps need to be taken to remove these bottlenecks,” said Hermann.

The long-standing limit of 1MW generating capacity for private power without a licence from Nersa was increased to 100MW in October 2021, following an announcement from President Cyril Ramaphosa.

At the end of 2022, that limit was completely scrapped, five months after Ramaphosa announced it was being considered as part of several interventions.

However, private power projects still need to be registered with Nersa.

Nersa announced in June that it had registered 216 private power projects since the 1MW threshold was lifted.

But it has been silent on further registrations after approving 16 private power projects with a combined capacity of 211MW in June 2022.

Solidarity’s legal action demands that Nersa reveals how many applications for private power generation it has received to date. It must also explain how long they take to approve.

Solidarity also wants Nersa to account for why no guidelines on feed-in and wheeling tariffs have been published.

Eskom has proposed that a net-billing rate be introduced under a new electricity tariff structure for users capable of feeding excess energy back into the grid.

The mechanism is intended to give customers a discount on their bills equal to a new time-of-use energy charge.

Hermann said the most significant protest action against the current power situation in the country lies in self-generating power.

“Through our application, we want to enable everyone, especially entrepreneurs who want to generate power, to do so,” he stated.

“However, we cannot expect entrepreneurs to make huge investments if they do not have the ability to estimate the return on such investments.”

“We, therefore, lack clear, reliable guidelines that make it possible to calculate such risk,” Hermann said.

Increase private power — but stabilise Eskom

Hermann added that Solidarity would do “everything possible” to help stabilise Eskom but would apply itself just as much to increase the private sector’s share.

“Eskom will always be part of the South African power supply mix, but the private sector’s share in power supply will have to increase drastically to ensure a sustainable power supply,” Hermann stated.

The organisation previously furnished Eskom and the public enterprises department with the details of 300 engineers and technicians who have skills and expertise that are in dire shortage at the utility.

Eskom subsequently launched an online skills crowdsourcing database in November 2022.

Its purpose is to provide an open platform and equal opportunities for those who could assist in helping it fix its struggling coal power stations and better train its current employees.

At its launch, Eskom said it had already loaded 238 individuals onto its database through previous submissions.

Of these applicants, 153 had been shortlisted as potentially active, skilled, and willing candidates.

Twenty-five of them were selected for the first phase of the crowdsourcing intake, which would commence between November and December 2022.