The Department of Mineral Resources and Energy has gazetted the Amended Schedule 2 of the Electricity Regulation Act (ERA) 4 of 2006, which will do away with licensing needs for embedded electricity generation of up to 100 megawatts.
Gazetted on Thursday, the amended act paves the way for private companies and generating projects to produce up to 100 megawatts of electricity for their own use without having to apply for a licence from the National Energy Regulator of South Africa (NERSA).
The amendment follows President Cyril Ramaphosa’s announcement on 10 June 2021 that the Schedule 2 Amendment of the ERA would be published within 60 days.
Previously, the maximum allowed embedded power generation threshold was at one megawatt.
According to the department, the increase in the threshold is a positive move and an intervention, which will reform the energy sector.
“It is envisaged that this step will unlock significant investment in new generation capacity in the short-to-medium term, and make significant inroads towards achieving national energy security, as well as reduce the impact of load shedding across the country,” the department said in a statement.
It is expected that the amended act will also allow power generators to send their surplus energy onto the national grid, subject to grid connection agreements with Eskom and local municipalities, in order to ensure compliance of regulations.