South Africa to lift power generation licence threshold to 10 MW

PUBLISHED: Fri, 23 Apr 2021 14:47:42 GMT

JOHANNESBURG, April 23 (Reuters) – South Africa plans to lift the licensing threshold for small-scale power generation projects to 10 megawatts (MW) from 1 MW, a government notice showed on Friday, giving a boost to firms anxious to curb their reliance on ailing state utility Eskom.

Africa’s most industrialised economy regularly suffers electricity outages because of faults at Eskom’s creaking coal-fired power stations.

But onerous regulations have prevented many companies, such as miners, from setting up their own generation facilities.

According to the notice published in the government gazette on Friday, generation projects of up to 10 MW will need to register with energy regulator Nersa, despite being exempt from requiring a licence.

The notice was signed by Mineral Resources and Energy Minister Gwede Mantashe and invited the public to comment on the proposed change.

President Cyril Ramaphosa promised that the licensing threshold would be raised during a state of the nation address in February, as part of reforms aimed at ending the country’s power crisis.

At the time he said easing licensing requirements for so-called “embedded generation” projects could unlock up to 5,000 MW of additional capacity.

Some local experts have said the threshold should be lifted to 50 MW, given the extent of the power shortfall and the fact that many companies want to build facilities larger than 10 MW.

Miner Gold Fields in February won approval for a 40 MW solar plant, four years after it first submitted a licence application. (Reporting by Alexander Winning; editing by Barbara Lewis)

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