3 February 2021

BUSA STATEMENT ON ELECTRICITY LICENCING EXEMPTION THRESHOLD

BUSA applauds the statement made by Eskom CEO Andre de Ruyter at the ENS Africa Webinar on 2 February 2021 in favour of lifting the licencing exemption threshold for electricity generation.

 

BUSA Energy structures have considered the analysis conducted by Meridian Economics and the survey conducted by EE Business Intelligence. We support the findings that up to 5000MW potential of private distributed generation could be unlocked if the licencing exemption threshold is lifted to 50MW. In the current circumstances, this is material incremental capacity that could be sourced from the private sector.

 

The technical requirements to ensure the stability and protection of the distribution grid is required for distributors independently of the NERSA licencing process as part of the Grid Code compliance. The same holds true for any other authorisations , such as environmental impact assessments as and when required. In our view the current licensing process serves no rational purpose.

 

Unlocking this potential is an immediate measure to enable investment in capacity that will greatly relieve the pressure on Eskom and the concomitant impact of load shedding on the economy. This intervention will also boost economic recovery and should be implemented at the same time as other IRP2019-aligned procurement programmes.

 

This change to Schedule 2 of the ERA is in line with point 2.2.4 of the Eskom Social Compact which states: “Government must enable self-generation by finalising all necessary legislation expeditiously, and removing any barriers to implementation, including those in respect of wheeling for self-generation / own use, subject to licensing conditions.” This is also in line with section 3.3 of the ERAP which requires the enabling of generation for own use.

 

BUSA urges government to expedite the process to amend the schedule and lift the licencing exemption threshold from 1MW to 50MW. This should help to boost investor confidence and demonstrate implementation of agreed steps to improve energy security.

 

Martin Kingston

 

Vice President of Business Unity South Africa