Nersa quickly-tracks solar license to reduce pressure on Eskom’s tottering power

Nersa (SA’s national energy regulator) has approved two 100MW solar power projects in the Northwest Territories under new regulations that allow for faster and easier licensing.

It comes at a time when such power grids are under unprecedented pressure, with almost half of its installed capacity often out of work and the ghost of a complete blackout is now being openly discussed in Parliament and by energy experts.

Two solar projects for Tronx Mineral Sand will be developed and operated by Sola Group and its partners. Among the projects, SOLA’s largest shareholder and equity partner is African Rainbow Energy.

Schedule 2 was amended last year under the Electricity Control Act to increase the threshold of ‘Embedded Generation’ from the current 1MW to 100MW without the need for a license. The objective was to unlock investment in new generation capabilities and advance the goal of national energy security.

Read: The company can generate up to 100MW of electricity – Ramaphosa

African Rainbow Energy CEO Brian Dames says the company is committed to investing R3 billion in the economy. “These projects are beginning to realize this commitment, as well as the commitment of African Rainbow Energy to use new technologies to provide large-scale clean energy solutions for the economy.”

Dom Wills, CEO of SOLA Group, said it would pave the way for large-scale private projects to be approved to contribute to the new generation of power.

Rudy Dix, head of project management at the presidency’s office, said raising the licensing threshold for new-generation projects has unlocked a huge pipeline of investment. “In order to track these projects faster, we have set up a joint task team between the government and the industry, which meets weekly to overcome many obstacles. All of this is important to address the power shortage, “Dix said in a statement.

The 100MW private generation facility without the need for a license is an excellent opportunity for the industry to generate its own power without having to wait a generation for a generation license or perhaps to obtain power from independent power producers, with the added cost that comes with it, Dess said. Mueller, energy expert and director of new energy development.

A so-called ‘wheeling framework’ approved by ESCOM makes it possible to locate these new power plants in a more ideal environment and provide power wheels to consumers in other parts of the country if the capacity is available on the grid. “I’m not sure if Eskom’s wheeling deal and costs have been finalized, but one would expect it to significantly increase the cost of electricity for consumers, as we see in Europe,” Muller said.

Loadshedding is likely to continue for a decade

“Those who are interested in this power generation opportunity probably want to protect their power supply against load shedding, which could last for another decade. Renewables provide clean but unreliable and uninterrupted power, which may not meet the needs of interested electricity consumers, although clean energy would be beneficial for some. Battery storage will also significantly increase the tariff, as Eskom will only use it as a backup power, ”Muller said.

Read: Load shedding is guaranteed until these things happen.

The 100MW embedded generation facility is also open to other technologies such as gas turbines. These are sometimes quick to create and can be distributed on modular mobile skids. They can provide more reliable energy and, when compatible with renewables, can provide more valuable and clean energy for our industry. The same applies to small modular reactors (SMRs), when they become commercially available after this decade and the licensing requirements are better understood, Muller added.

These new power projects may not have the luxury of sovereign guarantee, which was a feature of previous IPP projects selling electricity to Escom. “The bankability of the power plant will depend on the guarantee given by the customers for a period of 20 years, which may be unavoidable for most private companies or mining. It can also help municipalities gain access to electricity, but is often unable to meet the long-term guarantees required by bankruptcies or lenders or sponsors. Achieving the financial proximity of these projects can therefore be a challenge, “said Mueller.

The SOLA said in a statement that the large-scale bilateral energy transaction was the first step in South Africa’s plan to open up the grid to allow for more flexible electricity transactions. The draft law reveals the intention of a consolidated central procurement agency so that electricity traders can sell energy using the grid as a drain.

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