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Nersa aiming to grant concurrence on Ministerial determinations within three months

5th March 2020 BY: Terence Creamer
Creamer Media Editor

The National Energy Regulator of South Africa (Nersa) will release a consultation paper, possibly next week, which will formally initiate the public-participation process required to secure the regulator’s concurrence on two Section 34 Ministerial determinations that have been drafted by Mineral Resources and Energy Minister Gwede Mantashe.

The first determination relates to the procurement of so-called emergency generation capacity of up to 3 000 MW, which has been identified in the Integrated Resource Plan 2019 (IRP 2019) as the immediate supply deficit confronting South Africa.

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In December, the Department of Mineral Resources and Energy (DMRE) issued a request for information (RFI) seeking solutions that could be “grid connected in the shortest time at the least possible cost”.

Last month, Mantashe reported that the DMRE had received 481 responses by the RFI closing date of January 31 and said that the department’s preliminary analysis had indicated that some proposals could deliver power to the grid in less than 24 months.

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The determination received by Nersa is reportedly not technology specific, but stipulates that any projects procured should be connected to the grid by the end of 2021 at the latest.

The second determination, meanwhile, is technology specific, with allocations and timeframes outlined for solar photovoltaic, onshore wind, gas, coal and battery storage. These allocations, and their associated delivery timelines, are also aligned with the IRP 2019.

Nersa acting executive manager for electricity Dennis Seemela tells Engineering News that the regulator is under intense pressure to release the consultation paper and initiate the public participation process.

He stresses that Nersa is legally obliged to undertake public consultation before granting its concurrence, but that it is still having internal legal discussions as to whether such consultation can be accelerated.

DMRE deputy director-general Jacob Mbele indicated this week that the public-participation process could take “anywhere between three to six months”.

Seemela said Nersa was keen to ensure that the process was concluded in less than three months. However, he stressed that it was still seeking legal advice and board approval on a proposal for an accelerated process.

He confirmed, too, that there would be a public comment period following the release of the consultation paper, including public hearings.

The form that these hearings would take had not yet been decided, including whether there would be provincial hearings or a single national hearing.

Seemela did confirm, though, that Nersa had a budget for hosting the hearings.

“We are under extreme pressure to release the consultation paper and I am hoping that it might be released by next Friday.”

Once the paper is released there will be visibility of the timelines involved for providing concurrence.

Only once Nersa’s concurrence with the Section 34 Ministerial determinations is secured will the DMRE be in a position to initiate the procurement processes for both emergency and utility-scale projects, including the long-awaited fifth bid window of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

Historically, it has taken between 18 and 24 months from approval for independent power producers to complete REIPPPP projects.

Meanwhile, Seemela does not envisage any further amendments to Schedule 2 of the Electricity Regulation Act, which governs self-generation projects.

All projects above 1 MW will require licensing by Nersa, which will endeavour to complete the licencing process in 120 days.

Seemela tells Engineering News that, given the open-ended allocation for distributed generation in the IRP up until 2023, there is no limit on the size of projects that can be approved and no need for a Ministerial deviation from the IRP 2019.

These self-generation projects will also be entitled to wheel power so long as a bilateral wheeling agreement with either the municipal distributor or Eskom have been concluded and such agreements are submitted as part of the licence application, along with all other necessary documentation, including environmental records of decision. 

EDITED BY: Creamer Media Reporter
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