Podcasts about south africa nersa

The National Energy Regulator of South Africa (NERSA) has approved Eskom's 12.74% tariff increase for direct customers and 11.32% for municipalities. The South African Local Government Association, SALGA's Head of Energy and Electricity, Nhlanhla Ngidi is warning that the tariff increase will exacerbate illegal electricity connections as struggling consumers seek illicit means to access power. Ngidi spoke to our Senior producer, Ronald Phiri

Financial Compliance expert Paul Nel of Prisma says the solution to collecting the R92 billion owed to ESKOM by municipalities and the billions owed to Water boards is to liquidate dysfunctional municipalities in terms of the Municipal Finance Management Act after all the intervention processes of provincial and National Treasury have failed. “…it's more of a business rescue. It's not the same as what we understand on the liquidation with the private sector or any other business or private person where all the assets are sold. Not with a municipality. It is only the non-essential assets that must be sold and the full amount of that should be provided for full settlement for all its obligations, which is basically ESKOM and Water Boards." Nel says, in terms of the MFMA, a court order could also be obtained to get rid of the whole council as well as of all officials that are not adding value to the municipality. “…the big advantage of such a drastic step is that you will have a Metro or municipality with a clean sheet with no obligations.” Nel also provides figures on how ESKOM has overcharged the consumer since 2009, and gives his take on the reasons behind the continued high tariff increases. He was one of those who made a presentation to The National Energy Regulator of South Africa (NERSA) on the proposed 66% tariff hikes over the next three years.

Stephen Grootes speaks to Lindo Ngema - founder of Prominent Energy Solutions about the looming 36% electricity tariff hike proposed by Eskom, as the National Energy Regulator of South Africa (Nersa) kicked off public hearings in Cape Town, sparking widespread concern and outrage among residents.See omnystudio.com/listener for privacy information.

The High Court in Pretoria has denied electricity regulator, National Energy Regulator of South Africa (NERSA) and the municipal association, the South African Local Government Association (SALGA) leave to appeal against its earlier judgment precluding Nersa from approving tariff increases in more than 100 municipalities. The court agreed with AfriForum and ordered that Nersa was not authorised to approve any tariff increase unless they were based on a cost-of-supply (CoS) studies. Sakina Kamwendo spoke to Morne Moster, Manager of local government  affairs at AfriForum

In a significant victory for consumers, the Gauteng High Court has ruled that municipal electricity distributors cannot increase their prices from July 1, 2024. This decision comes after AfriForum's successful urgent application to block the National Energy Regulator of South Africa (Nersa) from considering tariff hike requests from municipalities. The court found that distributors failed to submit the required Cost of Supply studies to Nersa, a critical requirement for tariff increases. To discuss the implications of this ruling Elvis Presslin spoke to Morné Mostert, Manager of Local Government Affairs at AfriForum

Eskom is seeking to increase electricity tariffs by a significant 36% in 2025, following a 12% rise earlier this year. If the National Energy Regulator of South Africa (Nersa) approves the proposal, the hike will take effect on April 1, 2025. The South African Federation of Trade Unions (SAFTU) has vehemently opposed the move, warning that it will result in the loss of free basic electricity for millions of households. Joining Elvis Presslin to discuss the implications of this proposed tariff increase is SAFTU's spokesperson, Trevor Shaku

Lobby group AfriForum has brought an urgent application in the High Court in Pretoria against the National Energy Regulator of South Africa (Nersa) in hopes of preventing the regulator from considering municipalities' applications for electricity tariff increases. AfriFourm said that the tariff hike decision, which is set to be implemented on 1 July, was done “without the required cost studies,” which a 2022 High Court stipulated is required as prescribed by the Electricity Regulation Act 4 of 2006.Morné Mostert, Manager of Local Government Affairs at AfriForum, explains more now  See omnystudio.com/listener for privacy information.

Chris Yelland, Energy Analyst and MD at EE Business Intelligence, joins Bruce Whitfield to discuss how The National Energy Regulator of South Africa (Nersa) is negotiating with authorities to potentially increase the free electricity provided to low-income households. Currently, over 8 million households in South Africa benefit from the free basic electricity (FBE) program, receiving 50 kWh per month. At the end of May, Nersa approved a new rate for FBE, which municipalities must pay Eskom for supplying this free power. Starting July 1, the rate for the 2024/25 municipal financial year will be 194.40c/kWh, a 12.5% increase from the previous rate of 172.76c/kWh. Siobhan Redford,  Economist at RMB takes host, Bruce Whitfield through The RMB/BER Business Confidence Index. It edged up ahead of the national election in May, with businesses in the country taking a wait-and-see approach to the country's future now that the results have been declared. Siphiwe Moyo, Executive Director of the Organisational Behaviour Institute, joins Bruce Whitfield to discuss fostering an inclusive work environment amidst political noise. They explore strategies for leaders and HR to navigate sensitive topics, promote open dialogue, and create a sense of belonging and respect within diverse teams. Maintaining such an environment, especially during South African coalition talks, can enhance employee engagement, productivity, and overall organisational success. Bruce Whitfield profiles Zwelakhe Mnguni, the CIO of Benguela Global Fund Managers. Mnguni grew up in a squatter camp in Sebokeng, south of Johannesburg. After finishing school, he worked as a security guard for four years to save money for his education. Despite his humble beginnings and challenging circumstances, Mnguni pursued his dreams. Today, he is a co-founder of Benguela Global Fund Managers and serves as its chief investment officer, overseeing R7.2 billion in assets under management. See omnystudio.com/listener for privacy information.

Chris Yelland, Energy Analyst and MD at EE Business Intelligence, joins Bruce Whitfield to discuss how The National Energy Regulator of South Africa (Nersa) is negotiating with authorities to potentially increase the free electricity provided to low-income households. Currently, over 8 million households in South Africa benefit from the free basic electricity (FBE) program, receiving 50 kWh per month. At the end of May, Nersa approved a new rate for FBE, which municipalities must pay Eskom for supplying this free power. Starting July 1, the rate for the 2024/25 municipal financial year will be 194.40c/kWh, a 12.5% increase from the previous rate of 172.76c/kWh.See omnystudio.com/listener for privacy information.

Reneilwe Morema reports on Eskom's new stage 16 load shedding schedule which has been approved by The National Energy Regulator of South Africa (NERSA). The Stage 16 guidelines have been met with negative reviews from the citizens of South Africa, prompting the Minister of Electricity to release a statement to reassure us that ''these guidelines are just insurance measures should anything happen in the future, this how the System Operator will manage the grid, but in terms of implementing stage 16 nationally it is unlikely to happen.'' --- Send in a voice message: https://podcasters.spotify.com/pod/show/africandiasporanews/message Support this podcast: https://podcasters.spotify.com/pod/show/africandiasporanews/support

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. With the National Transmission Company South Africa (NTCSA) currently scheduled to be operationalised in July and efforts under way to ensure that the Electricity Regulation Act (ERA) Amendment Bill is passed by the current Parliament, work is now advancing on the market code for the future multimarket architecture that will progressively replace the vertically integrated structure that has prevailed for over a century. Eskom transmission MD Segomoco Scheppers will lead the NTCSA once it begins trade after addressing the remaining Companies Act requirements, having already met the key conditions of board independence, licensing and lender consent. He reported that, barring any surprises, the wholly owned Eskom subsidiary would transition towards being the transmission system operator (TSO) envisaged in the amended ERA, which by South African standards had advanced relatively speedily through the Parliamentary process. The ERA is currently being consider by the National Council of Provinces, having been endorsed by the National Assembly, and, if approved, will then be sent to President Cyril Ramaphosa, who has previously expressed an eagerness for the legislation to be promulgated as a matter of urgency. Scheppers admitted during a workshop on the draft market code that would govern the transition to a competitive industry, that he was continuously monitoring his emails for any sign of a legal challenge, following the recent issuance of creditor notices, which stipulated that any objection be lodged within 15 days of issuance and take the form of a legal challenge. However, he expressed cautious optimism that, absent any objections, the July timeframe could be met. This, after Eskom failed to meet the April 1 target date, which would have coincided with the start of the 2024/25 financial year. NEXT CHAPTER That said, he also stressed that the start of trade represented but one major milestone in a larger transformation effort, with the "next chapter" to begin once the ERA came into force and the NTCSA began integrating the TSO roles envisaged in the Act, which provides five years for such an evolution. Initially, the role of the NTCSA would be a "plug and play" version of the one performed hitherto by the transmission division. The amended ERA, however, also stipulates the following: The establishment of an independent TSO to manage the national grid, as well as system and market operations; The creation of a competitive electricity market, enabling multiple generators to compete on a level playing field; Ensure that regulation and tariffs are transparent, effective and clearly defined in scope; and Provide certainty to all market participants of their respective roles and responsibility. Speaking from the same platform as Scheppers, the Presidency's Saul Musker also highlighted that the ERA stipulated that a clear process be followed for the development by NTCSA of a market code, outlining qualifying criteria for power market participants, and for that code to be approved by the National Energy Regulator of South Africa (Nersa). The first draft of such a market code was published on April 19, following initial consultations pursued through the structure of the National Energy Crisis Committee (Necom), which was set up by Ramaphosa in July 2022 in response to the country's intensifying loadshedding crisis. Besides setting short- and medium-term goals to reduce the severity of, and eventually end, loadshedding, Necom was also instructed by Ramaphosa to "fundamentally transform the electricity sector to achieve long-term energy security". Musker said that besides the unbundling of Eskom in line with international trends and establishing the NTCSA, the key next steps related to developing a Nersa-approved market code, setting up a market operator within the NTCSA and imple...

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. With the National Transmission Company South Africa (NTCSA) currently scheduled to be operationalised in July and efforts under way to ensure that the Electricity Regulation Act (ERA) Amendment Bill is passed by the current Parliament, work is now advancing on the market code for the future multimarket architecture that will progressively replace the vertically integrated structure that has prevailed for over a century. Eskom transmission MD Segomoco Scheppers will lead the NTCSA once it begins trade after addressing the remaining Companies Act requirements, having already met the key conditions of board independence, licensing and lender consent. He reported that, barring any surprises, the wholly owned Eskom subsidiary would transition towards being the transmission system operator (TSO) envisaged in the amended ERA, which by South African standards had advanced relatively speedily through the Parliamentary process. The ERA is currently being consider by the National Council of Provinces, having been endorsed by the National Assembly, and, if approved, will then be sent to President Cyril Ramaphosa, who has previously expressed an eagerness for the legislation to be promulgated as a matter of urgency. Scheppers admitted during a workshop on the draft market code that would govern the transition to a competitive industry, that he was continuously monitoring his emails for any sign of a legal challenge, following the recent issuance of creditor notices, which stipulated that any objection be lodged within 15 days of issuance and take the form of a legal challenge. However, he expressed cautious optimism that, absent any objections, the July timeframe could be met. This, after Eskom failed to meet the April 1 target date, which would have coincided with the start of the 2024/25 financial year. NEXT CHAPTER That said, he also stressed that the start of trade represented but one major milestone in a larger transformation effort, with the "next chapter" to begin once the ERA came into force and the NTCSA began integrating the TSO roles envisaged in the Act, which provides five years for such an evolution. Initially, the role of the NTCSA would be a "plug and play" version of the one performed hitherto by the transmission division. The amended ERA, however, also stipulates the following: The establishment of an independent TSO to manage the national grid, as well as system and market operations; The creation of a competitive electricity market, enabling multiple generators to compete on a level playing field; Ensure that regulation and tariffs are transparent, effective and clearly defined in scope; and Provide certainty to all market participants of their respective roles and responsibility. Speaking from the same platform as Scheppers, the Presidency's Saul Musker also highlighted that the ERA stipulated that a clear process be followed for the development by NTCSA of a market code, outlining qualifying criteria for power market participants, and for that code to be approved by the National Energy Regulator of South Africa (Nersa). The first draft of such a market code was published on April 19, following initial consultations pursued through the structure of the National Energy Crisis Committee (Necom), which was set up by Ramaphosa in July 2022 in response to the country's intensifying loadshedding crisis. Besides setting short- and medium-term goals to reduce the severity of, and eventually end, loadshedding, Necom was also instructed by Ramaphosa to "fundamentally transform the electricity sector to achieve long-term energy security". Musker said that besides the unbundling of Eskom in line with international trends and establishing the NTCSA, the key next steps related to developing a Nersa-approved market code, setting up a market operator within the NTCSA and imple...

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. The National Energy Regulator of South Africa (Nersa) has initiated consultations on Eskom's latest Regulatory Clearing Account (RCA) application for the 2022/23 financial year, where Eskom is requesting R9-million, its lowest RCA application since the utility began making yearly submissions under the claw-back mechanism. Given that the amount is less than 2% of Eskom's allowable revenue for the year, Nersa is not required to undertake public hearings. Nevertheless, a consultation document has been published, with virtual hearings scheduled for August 2 and 4 and a decision expected by December 2. Eskom indicates that the cost and revenue variances during the period were relatively modest largely because foregone revenue related to loadshedding during the period has not been included in the RCA. GM for regulation Hasha Tlhotlhalemaje reports that the effect of loadshedding on Eskom during the period was about R20-billion, but that this amount has been excluded from the application as has been the case historically. She also tells Engineering News that the relatively small variance does not reflect a growing convergence between Eskom and Nersa regarding RCA calculations, disputes over which have been the subject of legal action. Eskom has reviewed all RCA decisions from 2014/15 to 2020/21 in court and court processes are still under way involving about R60-billion in what the utility alleges to be incorrect RCA decisions. Tlhotlhalemaje says this view has been endorsed by a court judgment and order for the financial years 2014/15 to 2016/17 RCA decisions, which Eskom subsequently re-reviewed after Nersa failed to comply with the order. Therefore, she does not view the current small variation as reflecting a growing convergence between Nersa and Eskom on the way the RCA mechanism is being implemented. "Instead, the key variances make the difference; one of these being revenue related to loadshedding that has not been included in the RCA. "Thus, an amount of approximately R20-bilion is not recovered, which has always been the tradition, but the amount is very extreme for this financial year," Tlhotlhalemaje explains. Eskom and Nersa also not yet aligned on the methodological approach that should be taken for the next round of tariff applications. Nersa has approve Electricity Pricing Determination Rules (EPDR), which it wants to be implemented for the 2025/26 financial year. Eskom, however, says the EPDR cannot be implemented as its fails to include a method for calculating tariffs and that the prevailing multiyear price determination, or MYPD, framework and methodology will, thus, have to be used. "Eskom is complying with the court order that requires the use of whatever methodology is in existence in September 2023 for the revenue determination for 2025/26. "The process is under way for a decision by Nersa in December 2024," Tlhotlhalemaje tells Engineering News.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. The National Energy Regulator of South Africa (Nersa) has initiated consultations on Eskom's latest Regulatory Clearing Account (RCA) application for the 2022/23 financial year, where Eskom is requesting R9-million, its lowest RCA application since the utility began making yearly submissions under the claw-back mechanism. Given that the amount is less than 2% of Eskom's allowable revenue for the year, Nersa is not required to undertake public hearings. Nevertheless, a consultation document has been published, with virtual hearings scheduled for August 2 and 4 and a decision expected by December 2. Eskom indicates that the cost and revenue variances during the period were relatively modest largely because foregone revenue related to loadshedding during the period has not been included in the RCA. GM for regulation Hasha Tlhotlhalemaje reports that the effect of loadshedding on Eskom during the period was about R20-billion, but that this amount has been excluded from the application as has been the case historically. She also tells Engineering News that the relatively small variance does not reflect a growing convergence between Eskom and Nersa regarding RCA calculations, disputes over which have been the subject of legal action. Eskom has reviewed all RCA decisions from 2014/15 to 2020/21 in court and court processes are still under way involving about R60-billion in what the utility alleges to be incorrect RCA decisions. Tlhotlhalemaje says this view has been endorsed by a court judgment and order for the financial years 2014/15 to 2016/17 RCA decisions, which Eskom subsequently re-reviewed after Nersa failed to comply with the order. Therefore, she does not view the current small variation as reflecting a growing convergence between Nersa and Eskom on the way the RCA mechanism is being implemented. "Instead, the key variances make the difference; one of these being revenue related to loadshedding that has not been included in the RCA. "Thus, an amount of approximately R20-bilion is not recovered, which has always been the tradition, but the amount is very extreme for this financial year," Tlhotlhalemaje explains. Eskom and Nersa also not yet aligned on the methodological approach that should be taken for the next round of tariff applications. Nersa has approve Electricity Pricing Determination Rules (EPDR), which it wants to be implemented for the 2025/26 financial year. Eskom, however, says the EPDR cannot be implemented as its fails to include a method for calculating tariffs and that the prevailing multiyear price determination, or MYPD, framework and methodology will, thus, have to be used. "Eskom is complying with the court order that requires the use of whatever methodology is in existence in September 2023 for the revenue determination for 2025/26. "The process is under way for a decision by Nersa in December 2024," Tlhotlhalemaje tells Engineering News.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. The National Energy Regulator of South Africa (Nersa) has belatedly moved to quell concern that its recent approval of a new loadshedding code of practice, which increases the number of potential stages from eight to 16, represents a signal that the prospect for higher levels of loadshedding is imminent. Following extensive public consultations undertaken by the National Rationalised Specifications (NRS) Association of South Africa, the third edition of the NRS048-9 standard was approved by the regulator for use by Eskom and municipal system operators during times of electricity constraint. It increases the number of loadshedding stages from the eight outlined in the second edition to 16 with the aim of preventing the system from succumbing to a blackout; a scenario from which it could take South Africa weeks to recover. At Stage 16, which Nersa fulltime regulator for electricity Nhlanhla Gumede described as a "highly unlikely scenario", 80% of demand would go unmet, and South African households and businesses would experience 32 hours of power cuts over a 32-hour period. At Stage 8, a level not yet implemented by Eskom, 40% of the load would be shed, equating to 16 hours over 32 hours. The utility has already implemented loadshedding at Stage 6 on several occasions, which under the third edition of NRS048-9, involves 30% of the load not being met, or 12 hours of loadshedding over 32 hours. In a media briefing hosted partly to explain the code and partly to allay fears, Gumede stressed that the approval of the new code was "not an indication that greater levels of loadshedding are imminent". NRS Association management committee chairperson Vally Padayachee said the updated standard had been developed using a scenario-planning methodology across the entire country load so as to address critical uncertainties, "including the unlikely event of Stage 16". "In so doing, we significantly mitigated the propensity of human error," he added. Prior to the approval of the update to NRS048-9, Eskom and municipal system operators had no firm guidance regarding the implementation of loadshedding beyond Stage 8, which was left open to their discretion. Padayachee argued that the lack of clear guidelines beyond Stage 8 posed a risk, particularly given that system operators would be making difficult decisions in an emergency situation where stress levels would be heightened, which could in turn increase the propensity for error. The new code of practice, he added, would help prepare operators to protect the national electricity grid, as it outlined a structured and proactive approach to addressing a crisis should one arise.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. The National Energy Regulator of South Africa (Nersa) has belatedly moved to quell concern that its recent approval of a new loadshedding code of practice, which increases the number of potential stages from eight to 16, represents a signal that the prospect for higher levels of loadshedding is imminent. Following extensive public consultations undertaken by the National Rationalised Specifications (NRS) Association of South Africa, the third edition of the NRS048-9 standard was approved by the regulator for use by Eskom and municipal system operators during times of electricity constraint. It increases the number of loadshedding stages from the eight outlined in the second edition to 16 with the aim of preventing the system from succumbing to a blackout; a scenario from which it could take South Africa weeks to recover. At Stage 16, which Nersa fulltime regulator for electricity Nhlanhla Gumede described as a "highly unlikely scenario", 80% of demand would go unmet, and South African households and businesses would experience 32 hours of power cuts over a 32-hour period. At Stage 8, a level not yet implemented by Eskom, 40% of the load would be shed, equating to 16 hours over 32 hours. The utility has already implemented loadshedding at Stage 6 on several occasions, which under the third edition of NRS048-9, involves 30% of the load not being met, or 12 hours of loadshedding over 32 hours. In a media briefing hosted partly to explain the code and partly to allay fears, Gumede stressed that the approval of the new code was "not an indication that greater levels of loadshedding are imminent". NRS Association management committee chairperson Vally Padayachee said the updated standard had been developed using a scenario-planning methodology across the entire country load so as to address critical uncertainties, "including the unlikely event of Stage 16". "In so doing, we significantly mitigated the propensity of human error," he added. Prior to the approval of the update to NRS048-9, Eskom and municipal system operators had no firm guidance regarding the implementation of loadshedding beyond Stage 8, which was left open to their discretion. Padayachee argued that the lack of clear guidelines beyond Stage 8 posed a risk, particularly given that system operators would be making difficult decisions in an emergency situation where stress levels would be heightened, which could in turn increase the propensity for error. The new code of practice, he added, would help prepare operators to protect the national electricity grid, as it outlined a structured and proactive approach to addressing a crisis should one arise.

The National Energy Regulator of South Africa (Nersa) has approved guidelines for implementing load shedding up to stage 16. The regulator published the latest revision of the load shedding Code of Practice. The revision was developed by experts from Eskom, the Energy Intensive User Group, among others. They say the code aims to help Eskom and municipal distributors mitigate the impact of high load-shedding stages while preventing a grid collapse. Sakina Kamwendo spoke to Vally Padayachee, Chairman of the Management Committee of the National Rationalised Specifications Association of SA and began by asking him why there was a need to revise South Africa's load shedding guidelines.

Starting from TOMORROW Eskom will be implementing  a 12.7% electricity price increase, as approved by the National Energy Regulator of South Africa (Nersa). The power utility in October 2023 applied to Nersa for the approval of its Retail Tariff and Structural Adjustment Application and the schedule of tariffs for the period from  the first of April 2024 to  the 31st of March 2025. For more Bongiwe Zwane spoke to Energy expert from the South African National Energy Development Institute (SANEDI)- Professor Sampson Mamphweli

Eskom is set to increase its electricity tariff on Monday by a whooping 12.74 per cent across the board. This was after the National Energy Regulator of South Africa (Nersa) approved the electricity tariff hike for the 2024/25 financial year in January 2023. The  South African Federation of Trade Unions has lambasted that this increase is above the inflation rate and will ultimately widen energy poverty. Sakina Kamwendo spoke to SAFTU national spokesperson, Trevor Shaku

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. Electricity Minister Kgosientsho Ramokgopa reports that Eskom's eight "lender groups" have given their consent to the establishment of the National Transmission Company South Africa (NTCSA) as a separate subsidiary under Eskom Holdings. Bondholder consent was one of several key approvals required ahead of the operationalisation of the NTCSA, officially scheduled for April 1, alongside the appointment of an independent board and licensing approvals from the regulator. Ramokgopa did not name the lender groups during a briefing on March 25, saying only that the eighth and final letter of consent was provided "last week". In February, the National Energy Regulator of South Africa (Nersa) officially published the three licences required for the operationalisation of the NTCSA, having approved their transfer from Eskom in 2023. And, Public Enterprises Minister Pravin Gordhan appointed the inaugural NTCSA board on January 9. In March, South Africa's Energy Regulator also consented to the transfer of powers and duties relating to power purchase agreements with independent power producers from Eskom to the NTCSA. Nersa said in a statement that NTCSA's trading licence would be amended to reflect the change. These regulatory decisions align with an application made to Nersa by Eskom, which is unbundling its generation, transmission, and distribution businesses in line with the 'Roadmap for Eskom in a reformed electricity supply industry' published by the Department of Public Enterprises in 2019. While being advanced under the existing Electricity Regulation Act (ERA), they also accord with some of the architectural changes outlined in amendments to the ERA, which were approved by the National Assembly on March 14. The legislation will now serve before the National Council of Provinces, whose approval is also required before it can be signed into law by the President. While opposition lawmakers have raised some concerns with the amendments, particularly with regard to the discretionary powers extended to the Energy Minister and with the future role envisaged for Nersa in setting prices and tariffs, Ramokgopa argued that the legislation would "remake the South Africa energy landscape". "One of the primary interventions [of the legislation] is to make it easier to produce and sell electricity in South Africa. "In order to do this, it established what the Bill refers to as a Transmission System Operator (TSO), which is managed by a newly formed entity that is wholly owned by Eskom and by extension wholly owned by the South African public, the NTCSA," Ramokgopa explained. He said the TSO would ensure that all electricity producers were treated "equally and fairly and be allowed access to the national grid on a non-discriminatory basis". Secondly, the legislation enables a "market platform" through which electricity can be bought and sold by multiple participants. Describing the legislation as a "democratisation" of the sector, Ramokgopa also forecast that the new framework would, over time, help reduce prices through competition and innovation, improve reliability by boosting investment in supply, and introduce consumer choice.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. Electricity Minister Kgosientsho Ramokgopa reports that Eskom's eight "lender groups" have given their consent to the establishment of the National Transmission Company South Africa (NTCSA) as a separate subsidiary under Eskom Holdings. Bondholder consent was one of several key approvals required ahead of the operationalisation of the NTCSA, officially scheduled for April 1, alongside the appointment of an independent board and licensing approvals from the regulator. Ramokgopa did not name the lender groups during a briefing on March 25, saying only that the eighth and final letter of consent was provided "last week". In February, the National Energy Regulator of South Africa (Nersa) officially published the three licences required for the operationalisation of the NTCSA, having approved their transfer from Eskom in 2023. And, Public Enterprises Minister Pravin Gordhan appointed the inaugural NTCSA board on January 9. In March, South Africa's Energy Regulator also consented to the transfer of powers and duties relating to power purchase agreements with independent power producers from Eskom to the NTCSA. Nersa said in a statement that NTCSA's trading licence would be amended to reflect the change. These regulatory decisions align with an application made to Nersa by Eskom, which is unbundling its generation, transmission, and distribution businesses in line with the 'Roadmap for Eskom in a reformed electricity supply industry' published by the Department of Public Enterprises in 2019. While being advanced under the existing Electricity Regulation Act (ERA), they also accord with some of the architectural changes outlined in amendments to the ERA, which were approved by the National Assembly on March 14. The legislation will now serve before the National Council of Provinces, whose approval is also required before it can be signed into law by the President. While opposition lawmakers have raised some concerns with the amendments, particularly with regard to the discretionary powers extended to the Energy Minister and with the future role envisaged for Nersa in setting prices and tariffs, Ramokgopa argued that the legislation would "remake the South Africa energy landscape". "One of the primary interventions [of the legislation] is to make it easier to produce and sell electricity in South Africa. "In order to do this, it established what the Bill refers to as a Transmission System Operator (TSO), which is managed by a newly formed entity that is wholly owned by Eskom and by extension wholly owned by the South African public, the NTCSA," Ramokgopa explained. He said the TSO would ensure that all electricity producers were treated "equally and fairly and be allowed access to the national grid on a non-discriminatory basis". Secondly, the legislation enables a "market platform" through which electricity can be bought and sold by multiple participants. Describing the legislation as a "democratisation" of the sector, Ramokgopa also forecast that the new framework would, over time, help reduce prices through competition and innovation, improve reliability by boosting investment in supply, and introduce consumer choice.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. The National Energy Regulator of South Africa (Nersa) reports that a further 124 generation facilities were registered during the third quarter of its financial year from October to December, increasing the number of facilities registered since 2018 to 1 087. The newly registered generators have a combined capacity of 605 MW and a collective investment value of R7.8-billion. Most of the projects, 122 in total, are solar photovoltaic (PV) plants, with a combined capacity of 604 MW, with two projects with a combined capacity of 1 MW being solar PV generators combined with battery energy storage systems. The Western Cape had the highest number of registrations during the period, 33 in total, with a combine capacity of 16 MW and an investment value of R222-million, but the North West attracted the biggest plants with the highest investment value. The eight projects registered in the North West have a combined capacity of 372 MW and a combined investment value of R3.54-billion. The Limpopo and Mpumalanga provinces also attracted large projects, with the 11 generators in Limpopo having a combined capacity of 83 MW, while attracting R1.82-billion in investment and Mpumalanga's five projects involving 77 MW and R1.3-billion in investment. There were 23 registrations in Gauteng (16 MW and R222-million), 14 in KwaZulu-Natal (10 MW and R140-million), 14 in the Eastern Cape (18 MW and R284-million), 11 in the Free State (12 MW and R233-million) and five in the Northern Cape (1 MW and R13-million). Nersa calculated the average investment cost for the third quarter to be R12 817/kW. It also reported that 86 generation facilities, with a combined capacity of 568 MW and an investment value of R7.2-billion, are connected to the Eskom network while 38 generation facilities are connected to the municipal distribution network and generate a total of 37 MW, with an investment value of R500-million. Trade and Industrial Policy Strategies' Gaylor Montmasson-Clair, who tracks registrations over the calendar year, reported in January that a total of 4 530 MW of renewables generators had been registered with Nersa in 2023, which he said was almost three times that registered in 2022, and more than 50 times the registration recorded in 2021. Montmasson-Clair attributed the rise to government's decision to remove licensing requirement on distributed projects.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. The National Energy Regulator of South Africa (Nersa) reports that a further 124 generation facilities were registered during the third quarter of its financial year from October to December, increasing the number of facilities registered since 2018 to 1 087. The newly registered generators have a combined capacity of 605 MW and a collective investment value of R7.8-billion. Most of the projects, 122 in total, are solar photovoltaic (PV) plants, with a combined capacity of 604 MW, with two projects with a combined capacity of 1 MW being solar PV generators combined with battery energy storage systems. The Western Cape had the highest number of registrations during the period, 33 in total, with a combine capacity of 16 MW and an investment value of R222-million, but the North West attracted the biggest plants with the highest investment value. The eight projects registered in the North West have a combined capacity of 372 MW and a combined investment value of R3.54-billion. The Limpopo and Mpumalanga provinces also attracted large projects, with the 11 generators in Limpopo having a combined capacity of 83 MW, while attracting R1.82-billion in investment and Mpumalanga's five projects involving 77 MW and R1.3-billion in investment. There were 23 registrations in Gauteng (16 MW and R222-million), 14 in KwaZulu-Natal (10 MW and R140-million), 14 in the Eastern Cape (18 MW and R284-million), 11 in the Free State (12 MW and R233-million) and five in the Northern Cape (1 MW and R13-million). Nersa calculated the average investment cost for the third quarter to be R12 817/kW. It also reported that 86 generation facilities, with a combined capacity of 568 MW and an investment value of R7.2-billion, are connected to the Eskom network while 38 generation facilities are connected to the municipal distribution network and generate a total of 37 MW, with an investment value of R500-million. Trade and Industrial Policy Strategies' Gaylor Montmasson-Clair, who tracks registrations over the calendar year, reported in January that a total of 4 530 MW of renewables generators had been registered with Nersa in 2023, which he said was almost three times that registered in 2022, and more than 50 times the registration recorded in 2021. Montmasson-Clair attributed the rise to government's decision to remove licensing requirement on distributed projects.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. Eskom says the Electricity Pricing Determination Rules (EPDR) approved by the National Energy Regulator of South Africa (Nersa) in December cannot be implemented for the 2025/26 financial year as proposed by the regulator, owing to the time it takes to prepare, adjudicate and approve such applications. In addition, the utility has questioned whether the rules are implementable at all given how far they deviate from established standards used globally for determining electricity tariffs. Following a period of public consultation, Nersa approved the EPDR late last year. These tariffs are applicable for all licensees providing electricity to customers. The prevailing multiyear price determination (MYPD) framework and methodology has been used to determine Eskom's yearly allowable revenue since 2006. That allowable revenue is then divided by approved sales volumes for the period to determine average tariffs. The detailed Eskom tariffs to be charged in any given year are then determined by the Eskom Retail Tariff and Structural Adjustment methodology. For municipalities, Nersa is required to base tariffs on the cost of supply framework. Nersa says the revision to the way tariffs are determined has been informed by changes under way in the electricity supply industry, including the emergence of new participants in generation and trading and the unbundling of Eskom. Tariffs, it argues, will no longer be aggregated and will instead be determined for each licensed activity along the value chain - including generation, transmission, distribution and trading - based on the fixed costs, variable costs and customer-specific costs allowed by the regulator. Nersa has already acknowledged the potential difficulties in transitioning from the MYPD to the EPDR and has outlined two possible routes, described as Plan A and Plan B, for introducing the new framework. It has also noted that the MYPD was introduced even though the methodology was not fully finalised in 2006. However, Eskom GM for regulation Hasha Tlhotlhalemaje does not believe the EPDR is implementable at all and argues that neither Plan A nor Plan B can be implemented in 2025/26 as proposed, as neither plan fully accounts for the time it takes Eskom to prepare a submission and meet the relevant legislative requirements. These timing requirements have been reinforced in recent court judgments and orders, which have stipulated that only a methodology that is in place 18 months ahead of a new tariff adjustment can be applicable. That being the case, the new rules and associated methodology would have to have been approved by September 2023 for it to be implemented for the 2025/26 tariff period, which starts on April 1 next year. Furthermore, Tlhotlhalemaje argues that the EPDR approved by Nersa in December is not a complete set of rules, but rather an approach to determining tariffs based on individual customer profiles and not the system profile. "This is not possible and has not been implemented anywhere in the world and we think it will result in complete chaos," she says. While asserting that it will take Eskom at least two years to adjust to any new approach, she argues that it could take even longer for other industry participants, such as independent power producers (IPPs) and traders, given that they have had little experience of Nersa's tariff processes. "Before this can be implemented - and assuming it is implementable - a complete understanding of the process and requirements is needed. "This is not included in the rules at the moment." She notes, too, that because all licensees will be expected to provide Nersa with information before tariffs can be determined, practical tools, such as clear forms and formulas, are also required and such documentation has not yet been published or consulted. "If Nersa wishes to chan...

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. Eskom says the Electricity Pricing Determination Rules (EPDR) approved by the National Energy Regulator of South Africa (Nersa) in December cannot be implemented for the 2025/26 financial year as proposed by the regulator, owing to the time it takes to prepare, adjudicate and approve such applications. In addition, the utility has questioned whether the rules are implementable at all given how far they deviate from established standards used globally for determining electricity tariffs. Following a period of public consultation, Nersa approved the EPDR late last year. These tariffs are applicable for all licensees providing electricity to customers. The prevailing multiyear price determination (MYPD) framework and methodology has been used to determine Eskom's yearly allowable revenue since 2006. That allowable revenue is then divided by approved sales volumes for the period to determine average tariffs. The detailed Eskom tariffs to be charged in any given year are then determined by the Eskom Retail Tariff and Structural Adjustment methodology. For municipalities, Nersa is required to base tariffs on the cost of supply framework. Nersa says the revision to the way tariffs are determined has been informed by changes under way in the electricity supply industry, including the emergence of new participants in generation and trading and the unbundling of Eskom. Tariffs, it argues, will no longer be aggregated and will instead be determined for each licensed activity along the value chain - including generation, transmission, distribution and trading - based on the fixed costs, variable costs and customer-specific costs allowed by the regulator. Nersa has already acknowledged the potential difficulties in transitioning from the MYPD to the EPDR and has outlined two possible routes, described as Plan A and Plan B, for introducing the new framework. It has also noted that the MYPD was introduced even though the methodology was not fully finalised in 2006. However, Eskom GM for regulation Hasha Tlhotlhalemaje does not believe the EPDR is implementable at all and argues that neither Plan A nor Plan B can be implemented in 2025/26 as proposed, as neither plan fully accounts for the time it takes Eskom to prepare a submission and meet the relevant legislative requirements. These timing requirements have been reinforced in recent court judgments and orders, which have stipulated that only a methodology that is in place 18 months ahead of a new tariff adjustment can be applicable. That being the case, the new rules and associated methodology would have to have been approved by September 2023 for it to be implemented for the 2025/26 tariff period, which starts on April 1 next year. Furthermore, Tlhotlhalemaje argues that the EPDR approved by Nersa in December is not a complete set of rules, but rather an approach to determining tariffs based on individual customer profiles and not the system profile. "This is not possible and has not been implemented anywhere in the world and we think it will result in complete chaos," she says. While asserting that it will take Eskom at least two years to adjust to any new approach, she argues that it could take even longer for other industry participants, such as independent power producers (IPPs) and traders, given that they have had little experience of Nersa's tariff processes. "Before this can be implemented - and assuming it is implementable - a complete understanding of the process and requirements is needed. "This is not included in the rules at the moment." She notes, too, that because all licensees will be expected to provide Nersa with information before tariffs can be determined, practical tools, such as clear forms and formulas, are also required and such documentation has not yet been published or consulted. "If Nersa wishes to chan...

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. The National Energy Regulator of South Africa (Nersa) has approved far-reaching changes to the way electricity tariffs will be set in future, but it could still take some time before the rules are fully implemented. Nersa approved the new Electricity Price Determination Rules (EPDR) on December 14, following a consultation phase, which was initiated in 2021 to find an alternative to the current multiyear price determination (MYPD) framework that has been used to set Eskom tariffs since 2006. Full-time regulatory member for electricity Nhlanhla Gumede tells Engineering News that the decision to revamp the approach to setting tariffs was informed by changes under way in the electricity supply industry, including the emergence of new participants in generation and trading and the unbundling of Eskom. In addition, the regulator had grown increasingly concerned about the steep rise in tariffs over the past number of years that, alongside a dismal industry performance, had undermined credibility and sent poor price signals. "The objective was to develop interventions to make the pricing framework more fit-for-purpose in an increasingly disaggregated industry and to drive efficiencies in both the use and production of electricity for improved price stability," Gumede explains. The move to a competitive industry, he argues, also requires a tool that focuses on the industry as a whole and not only a single licensee. Under the EPDR, tariffs will no longer be aggregated and are instead determined for each licensed activity along the value chain - including generation, transmission, distribution and trading - based on the fixed costs, variable costs and customer-specific costs allowed by the regulator. Nersa argues that such activity-based costing (ABC) should be no more data-intensive than the current methodologies, as licensees collect costing and financial data on an ongoing basis. ABC, it adds, simply requires the licensees to package the same data with a standardised set of regulatory accounts, before the allowable revenue calculations are undertaken. The proposed outcome is what Gumede describes as being "unbundled and cost reflective tariffs". Nersa is currently aiming to implement the EPDR from the 2025/26 financial year but acknowledges that transitioning from the MYPD poses challenges and timing will depend on the readiness of licensees and other effected stakeholders. Implementation also requires the finalisation of the methodology to be used by licensees to prepare a tariff submission, and no timeline has as yet been set for the publication of such a methodology. In approving the EPDR, Nersa outlined both a Plan A and a Plan B for implementation, with Plan B allowing for the use of the MYPD methodology, with certain conditions. Eskom has stated previously that it takes two years to prepare a revenue application under the MYPD and has, thus, already started preparing its submission for the 2025/26 financial year under the existing methodology. In addition, in July 2022 the High Court confirmed that any revenue application needed to be made in accordance with an existing methodology, which in the case of the EPDR still must be finalised. Therefore, Eskom is likely to argue that it is not practical to implement the EPDR in 2025, given that its submission would have to be made this year to allow Nersa time to conduct the public consultations and hearings required for the approval of municipal tariffs by March 15, 2025, as stipulated by the Finance Minister. Nevertheless, Gumede indicates that the regulator is eager to transition to the EPDR, while highlighting that the EPDR implementation plan "provides for a period of support to licensees and affected stakeholders to transition to the new pricing rules". He notes, too, that Eskom's September 2005 application for revenue f...

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. The National Energy Regulator of South Africa (Nersa) has approved far-reaching changes to the way electricity tariffs will be set in future, but it could still take some time before the rules are fully implemented. Nersa approved the new Electricity Price Determination Rules (EPDR) on December 14, following a consultation phase, which was initiated in 2021 to find an alternative to the current multiyear price determination (MYPD) framework that has been used to set Eskom tariffs since 2006. Full-time regulatory member for electricity Nhlanhla Gumede tells Engineering News that the decision to revamp the approach to setting tariffs was informed by changes under way in the electricity supply industry, including the emergence of new participants in generation and trading and the unbundling of Eskom. In addition, the regulator had grown increasingly concerned about the steep rise in tariffs over the past number of years that, alongside a dismal industry performance, had undermined credibility and sent poor price signals. "The objective was to develop interventions to make the pricing framework more fit-for-purpose in an increasingly disaggregated industry and to drive efficiencies in both the use and production of electricity for improved price stability," Gumede explains. The move to a competitive industry, he argues, also requires a tool that focuses on the industry as a whole and not only a single licensee. Under the EPDR, tariffs will no longer be aggregated and are instead determined for each licensed activity along the value chain - including generation, transmission, distribution and trading - based on the fixed costs, variable costs and customer-specific costs allowed by the regulator. Nersa argues that such activity-based costing (ABC) should be no more data-intensive than the current methodologies, as licensees collect costing and financial data on an ongoing basis. ABC, it adds, simply requires the licensees to package the same data with a standardised set of regulatory accounts, before the allowable revenue calculations are undertaken. The proposed outcome is what Gumede describes as being "unbundled and cost reflective tariffs". Nersa is currently aiming to implement the EPDR from the 2025/26 financial year but acknowledges that transitioning from the MYPD poses challenges and timing will depend on the readiness of licensees and other effected stakeholders. Implementation also requires the finalisation of the methodology to be used by licensees to prepare a tariff submission, and no timeline has as yet been set for the publication of such a methodology. In approving the EPDR, Nersa outlined both a Plan A and a Plan B for implementation, with Plan B allowing for the use of the MYPD methodology, with certain conditions. Eskom has stated previously that it takes two years to prepare a revenue application under the MYPD and has, thus, already started preparing its submission for the 2025/26 financial year under the existing methodology. In addition, in July 2022 the High Court confirmed that any revenue application needed to be made in accordance with an existing methodology, which in the case of the EPDR still must be finalised. Therefore, Eskom is likely to argue that it is not practical to implement the EPDR in 2025, given that its submission would have to be made this year to allow Nersa time to conduct the public consultations and hearings required for the approval of municipal tariffs by March 15, 2025, as stipulated by the Finance Minister. Nevertheless, Gumede indicates that the regulator is eager to transition to the EPDR, while highlighting that the EPDR implementation plan "provides for a period of support to licensees and affected stakeholders to transition to the new pricing rules". He notes, too, that Eskom's September 2005 application for revenue f...

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. The National Energy Regulator of South Africa (Nersa) has officially published on its website the three licences required for the operationalisation of the National Transmission Company South Africa (NTCSA), having approved their transfer from Eskom to the NTCSA last year. The NTCSA is in the process of being established as an independent subsidiary of Eskom Holdings as part of a far-reaching restructuring process initiated in 2019 to unbundle the vertically integrated utility into three independent businesses of transmission, distribution and generation. While the licensing has been implemented under the current Electricity Regulation Act, the transfer is also aligned with amendments currently before lawmakers aimed at facilitating a more competitive market structure. The separation of NTCSA has also been prioritised ahead of that of distribution, whose unbundling is also well advanced, and generation, owing to the importance of having an independent transmission, system and market operator in levelling the playing field between the Eskom generators and those of independent power producers. The NTCSA is expected to begin operating from the start of it new financial year on April 1 and it inaugural board, chaired by Priscillah Mabelane, was appointed on January 9, leaving the securing of bondholder consent as the key remaining condition precedent for operationalisation. On February 1, Nersa published NTCSA's transmission licence, officially issued on July 27, 2023, as well as trading and import and export licences, issued on September 14, 2023. In terms of the transmission licence, the NTCSA has been authorised to operate the transmission facility and to undertake the roles of Transmission Network Service Provider, System Operator, Transmission System Planner, and Grid Code Secretariat. Through the trading and import and export licences, the NTCSA can trade with generators and customers in South Africa and import and export regionally, including through the Southern African Power Pool. The transmission and import and export licences are valid for 25 years from the date of issuance, while the trading licence is valid for five years.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. The National Energy Regulator of South Africa (Nersa) has officially published on its website the three licences required for the operationalisation of the National Transmission Company South Africa (NTCSA), having approved their transfer from Eskom to the NTCSA last year. The NTCSA is in the process of being established as an independent subsidiary of Eskom Holdings as part of a far-reaching restructuring process initiated in 2019 to unbundle the vertically integrated utility into three independent businesses of transmission, distribution and generation. While the licensing has been implemented under the current Electricity Regulation Act, the transfer is also aligned with amendments currently before lawmakers aimed at facilitating a more competitive market structure. The separation of NTCSA has also been prioritised ahead of that of distribution, whose unbundling is also well advanced, and generation, owing to the importance of having an independent transmission, system and market operator in levelling the playing field between the Eskom generators and those of independent power producers. The NTCSA is expected to begin operating from the start of it new financial year on April 1 and it inaugural board, chaired by Priscillah Mabelane, was appointed on January 9, leaving the securing of bondholder consent as the key remaining condition precedent for operationalisation. On February 1, Nersa published NTCSA's transmission licence, officially issued on July 27, 2023, as well as trading and import and export licences, issued on September 14, 2023. In terms of the transmission licence, the NTCSA has been authorised to operate the transmission facility and to undertake the roles of Transmission Network Service Provider, System Operator, Transmission System Planner, and Grid Code Secretariat. Through the trading and import and export licences, the NTCSA can trade with generators and customers in South Africa and import and export regionally, including through the Southern African Power Pool. The transmission and import and export licences are valid for 25 years from the date of issuance, while the trading licence is valid for five years.

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. Eskom has taken a major step in unlocking much-needed grid capacity for wind projects in the Western and Eastern Cape provinces by publishing the highly-anticipated curtailment addendum to its latest Generation Connection Capacity Assessment, or GCCA 2025. The addendum, which has been published on Eskom's website and has been approved by the National Energy Regulator of South Africa (Nersa), states that, by accepting a "reasonable share of no more than 10% of curtailment", 3 470 MW of additional grid capacity to connect wind generation will be made available, including 2 680 MW in the Western Cape and 790 MW in the Eastern Cape. Curtailment is defined in the document as the controlled reduction of the output of renewable energy plants as a system operator response to transmission capacity constraints. "When the grid limit is reached, any further increase of generation in the supply area leads to grid congestion. In such cases, and in order to remove the congestion, generation has to be reduced." However, it argues that the generation connection capacity for constrained areas can be safely increased by accepting a reasonable share of curtailment, adding, too, that curtailment will maximise the use of the existing grid. Prior to the addendum, the GCCA 2025 had stated that there was no remaining grid capacity in the Eastern, Northern and Western Cape provinces, while indicating there to be some 19 900 MW of capacity in the rest of the country. The publication of the addendum could have major implications for the renewables bid window currently under way for the procurement of 5 000 MW, divided between 3 200 MW of wind and 1 800 MW of solar photovoltaic (PV). Although it has not yet been confirmed whether the new curtailment framework will now be applied during the round, with another bidding round due for release by the end of March. Bid Window Seven is the first bidding round to be hosted following the partial failure of Bid Window Six, when only solar PV projects with a combined capacity of 1 000 MW advanced to a preferred-bidder stage after Eskom indicated there to be no remaining grid-connection capacity for those wind projects that had been vying for a 3 200 MW allocation. This failure led to significant debate about why a mechanisms such as curtailment, which is used by system operators globally to maximise the use of the grid, was not being employed given the urgency to close what is considered to be a supply shortfall of at least 6 000 MW and in light of intensifying loadshedding. An assessment by Eskom and two leading European transmission system operators - 50Hertz of Germany and Elia of Belgium - was then undertaken last year. It showed that the capacity of the existing Western Cape grid to host variable renewable generators could be doubled under a scenario where no more than 10% curtailment was implemented. Nevertheless, no such curtailment framework was included in the GCCA 2025, which was published in October. However, Eskom promised that an addendum would be published once it had received the necessary internal governance authorisations, as well as Nersa's approval. Ahead of the publication of the GCCA 2025 addendum, it was assumed that wind projects in particular would have to be bid in lower-yielding regions, unless they had existing grid connection budget quotes or could secure capacity that had expired in relation to projects that failed to reach financial close under the risk mitigation round and the fifth renewables bid window. Independent Power Producer Office head Bernard Magoro indicated ahead of the addendum's release that this was likely to result in a price premium, noting that in previous rounds, wind projects bid in Mpumalanga had carried tariffs that were 30% higher than those in the Cape provinces. The GCCA addendum itself highlights ongoin...

This audio is brought to you by Endress and Hauser, a leading supplier of products, solutions and services for industrial process measurement and automation. Eskom has taken a major step in unlocking much-needed grid capacity for wind projects in the Western and Eastern Cape provinces by publishing the highly-anticipated curtailment addendum to its latest Generation Connection Capacity Assessment, or GCCA 2025. The addendum, which has been published on Eskom's website and has been approved by the National Energy Regulator of South Africa (Nersa), states that, by accepting a "reasonable share of no more than 10% of curtailment", 3 470 MW of additional grid capacity to connect wind generation will be made available, including 2 680 MW in the Western Cape and 790 MW in the Eastern Cape. Curtailment is defined in the document as the controlled reduction of the output of renewable energy plants as a system operator response to transmission capacity constraints. "When the grid limit is reached, any further increase of generation in the supply area leads to grid congestion. In such cases, and in order to remove the congestion, generation has to be reduced." However, it argues that the generation connection capacity for constrained areas can be safely increased by accepting a reasonable share of curtailment, adding, too, that curtailment will maximise the use of the existing grid. Prior to the addendum, the GCCA 2025 had stated that there was no remaining grid capacity in the Eastern, Northern and Western Cape provinces, while indicating there to be some 19 900 MW of capacity in the rest of the country. The publication of the addendum could have major implications for the renewables bid window currently under way for the procurement of 5 000 MW, divided between 3 200 MW of wind and 1 800 MW of solar photovoltaic (PV). Although it has not yet been confirmed whether the new curtailment framework will now be applied during the round, with another bidding round due for release by the end of March. Bid Window Seven is the first bidding round to be hosted following the partial failure of Bid Window Six, when only solar PV projects with a combined capacity of 1 000 MW advanced to a preferred-bidder stage after Eskom indicated there to be no remaining grid-connection capacity for those wind projects that had been vying for a 3 200 MW allocation. This failure led to significant debate about why a mechanisms such as curtailment, which is used by system operators globally to maximise the use of the grid, was not being employed given the urgency to close what is considered to be a supply shortfall of at least 6 000 MW and in light of intensifying loadshedding. An assessment by Eskom and two leading European transmission system operators - 50Hertz of Germany and Elia of Belgium - was then undertaken last year. It showed that the capacity of the existing Western Cape grid to host variable renewable generators could be doubled under a scenario where no more than 10% curtailment was implemented. Nevertheless, no such curtailment framework was included in the GCCA 2025, which was published in October. However, Eskom promised that an addendum would be published once it had received the necessary internal governance authorisations, as well as Nersa's approval. Ahead of the publication of the GCCA 2025 addendum, it was assumed that wind projects in particular would have to be bid in lower-yielding regions, unless they had existing grid connection budget quotes or could secure capacity that had expired in relation to projects that failed to reach financial close under the risk mitigation round and the fifth renewables bid window. Independent Power Producer Office head Bernard Magoro indicated ahead of the addendum's release that this was likely to result in a price premium, noting that in previous rounds, wind projects bid in Mpumalanga had carried tariffs that were 30% higher than those in the Cape provinces. The GCCA addendum itself highlights ongoin...

South Africa's grid constraints are continuing to cast a shadow over the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), the seventh bidding round for which was launched in December for 3 200 MW of onshore wind and 1 800 MW of solar photovoltaic (PV) after months of delay. Independent Power Producer Office head Bernard Magoro told prospective REIPPPP Bid Window Seven (BW7) bidders during a virtual conference on January 17 that the delays were largely attributed to concerns over the availability of grid-connection capacity in the wind- and solar-rich Eastern, Western and Northern Cape provinces. Various interventions and solutions had been considered following the partial failure of BW6, during which none of the wind projects vying for a 3 200 MW allocation were selected as preferred bids after Eskom indicated that the gird capacity on which they were premised had been consumed. Therefore, only bids for 1 000 MW of solar PV advanced to the preferred-bidder stage. The development resulted in Eskom introducing an interim grid allocation solution that departs from the previous 'first come, first served' approach to one that prioritises so-called 'shovel-ready projects', while it also sought approval for a new 'gated' approach that would enable it to set aside specific capacity for public and private procurement cycles. Eskom also indicated that it would adopt a new curtailment framework that could unlock immediate connection capacity in those areas that are described in its most recent Generation Connection Capacity Assessment as having 'zero' capacity. The document indicates that there is 19.9 GW of grid capacity elsewhere in the country, however. Both proposed solutions have been submitted to the National Energy Regulator of South Africa (Nersa) for noting and approval but they have not been integrated into the BW7 request for proposals (RFP). It does, however, include a modest change to the curtailment approach by removing the previous threshold restricting compensation for energy than could not be absorbed by the grid so as to "optimise the management of available grid capacity". In addition, BW7 allows for bidders to bid based on grid-connection cost estimate letters (CELs) and valid budget quotes (BQs), instead of CELs alone. There is also potential for bidders to access capacity recovered as a result of the expiry of BQs for projects that failed to achieve financial close under both BW5 and the Risk Mitigation procurement programme. Eskom announced the expiry in early January of five Risk Mitigation BQs and there is a likelihood of further expiries arising from BW5. Nevertheless, prospective bidders for the allocation in REIPPPP BW7 could have to rely heavily on prospects outside of those regions with the most potent renewable resources, while Nersa continues to consider the new curtailment and grid allocation frameworks for future rounds. MORE RENEWABLES, BATTERY & GAS PROCUREMENT SOON Magoro indicated that BW8 for another 5 000 MW of renewables could be launched before the end of government's financial year, which runs to the end of March. Likewise the office is also preparing a third battery storage auction for 616 MW and a Coega-specific gas-to-power bid window, which will have a request for qualifications phase ahead of the RFP. These would be in addition to the second bidding round under way for 615 MW of battery storage and the inaugural gas-to-power auction for 2 000 MW. The grid, Magoro said, would remain a challenge for the future rounds. But he expressed optimism that all the components proposed for managing grid capacity and grid allocations would be in place for the upcoming bid windows. Besides the modification to BW7's approach to curtailment, the other new elements introduced as part of the RFP include: A reduction, from 100% to 80%, in the government guarantee framework should Eskom, which remains the buyer, fail to pay, while the 100% guarantee remains in place for any gover...

South Africa's grid constraints are continuing to cast a shadow over the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), the seventh bidding round for which was launched in December for 3 200 MW of onshore wind and 1 800 MW of solar photovoltaic (PV) after months of delay. Independent Power Producer Office head Bernard Magoro told prospective REIPPPP Bid Window Seven (BW7) bidders during a virtual conference on January 17 that the delays were largely attributed to concerns over the availability of grid-connection capacity in the wind- and solar-rich Eastern, Western and Northern Cape provinces. Various interventions and solutions had been considered following the partial failure of BW6, during which none of the wind projects vying for a 3 200 MW allocation were selected as preferred bids after Eskom indicated that the gird capacity on which they were premised had been consumed. Therefore, only bids for 1 000 MW of solar PV advanced to the preferred-bidder stage. The development resulted in Eskom introducing an interim grid allocation solution that departs from the previous 'first come, first served' approach to one that prioritises so-called 'shovel-ready projects', while it also sought approval for a new 'gated' approach that would enable it to set aside specific capacity for public and private procurement cycles. Eskom also indicated that it would adopt a new curtailment framework that could unlock immediate connection capacity in those areas that are described in its most recent Generation Connection Capacity Assessment as having 'zero' capacity. The document indicates that there is 19.9 GW of grid capacity elsewhere in the country, however. Both proposed solutions have been submitted to the National Energy Regulator of South Africa (Nersa) for noting and approval but they have not been integrated into the BW7 request for proposals (RFP). It does, however, include a modest change to the curtailment approach by removing the previous threshold restricting compensation for energy than could not be absorbed by the grid so as to "optimise the management of available grid capacity". In addition, BW7 allows for bidders to bid based on grid-connection cost estimate letters (CELs) and valid budget quotes (BQs), instead of CELs alone. There is also potential for bidders to access capacity recovered as a result of the expiry of BQs for projects that failed to achieve financial close under both BW5 and the Risk Mitigation procurement programme. Eskom announced the expiry in early January of five Risk Mitigation BQs and there is a likelihood of further expiries arising from BW5. Nevertheless, prospective bidders for the allocation in REIPPPP BW7 could have to rely heavily on prospects outside of those regions with the most potent renewable resources, while Nersa continues to consider the new curtailment and grid allocation frameworks for future rounds. MORE RENEWABLES, BATTERY & GAS PROCUREMENT SOON Magoro indicated that BW8 for another 5 000 MW of renewables could be launched before the end of government's financial year, which runs to the end of March. Likewise the office is also preparing a third battery storage auction for 616 MW and a Coega-specific gas-to-power bid window, which will have a request for qualifications phase ahead of the RFP. These would be in addition to the second bidding round under way for 615 MW of battery storage and the inaugural gas-to-power auction for 2 000 MW. The grid, Magoro said, would remain a challenge for the future rounds. But he expressed optimism that all the components proposed for managing grid capacity and grid allocations would be in place for the upcoming bid windows. Besides the modification to BW7's approach to curtailment, the other new elements introduced as part of the RFP include: A reduction, from 100% to 80%, in the government guarantee framework should Eskom, which remains the buyer, fail to pay, while the 100% guarantee remains in place for any gover...

The National Energy Regulator of South Africa (Nersa) has approved the process to secure an additional generating capacity from nuclear. South Africa will procure an additional 2,500 megawatts (MW) of new generation capacity from nuclear sources to counter the rolling blackouts that have plagued the country. Addressing the media , Electricity Minister - Kgosientso Ramokgopa said the procurement of nuclear energy would assist the country to achieve a generation mix required to reach the envisaged demand and to ensure the country's energy security in the future. Electricity Minister - Kgosientso Ramokgopa elaborates

The National Energy Regulator of South Africa (Nersa) reports that it registered a further 98 generation facilities - with a combined capacity of 908 MW and an investment value of R17.3-billion - during the second quarter of its 2023/24 financial year. These registrations, which took place from July to September, raise to 1 185 the total number of generation facilities registered since 2018. However, the pace of registrations accelerated markedly after a 2021 reform was made to Schedule 2 of the Electricity Regulation Act, lifting the licence-exemption cap from 1 MW to 100 MW. That cap was subsequently removed entirely to accelerate investment as power disruptions intensified. In August, the National Energy Crisis Committee reported that, since the implementation of the regulatory changes, the pipeline of private sector generation projects had increased to over 100 projects representing more than 10 000 MW of capacity. Projects registered with Nersa to date, meanwhile, have a combined capacity of 5 785 MW and an investment value of R111-billion and exclude the thousands of smaller installations that have been implemented by households and businesses in response to loadshedding. Eskom has estimated that some 4 400 MW of behind-the-meter generation was installed between July 2022 and July 2023, mostly in the form of rooftop solar. Nersa reports that 92 of the registrations during the second quarter were for solar photovoltaic (PV) facilities, which make up 71% of the capacity registered. The balance comprises two solar PV projects with battery energy storage systems, two co-generators and two wind projects. Regulator Member responsible for Electricity Regulation Nhlanhla Gumede commended the uptake in registrations, which he indicated had been processed by Nersa within an average of five working days. However, he recommended that future registration applications for generation facilities of variable energy sources be coupled with battery storage. Sixty-eight of the generation facilities registered during the period are connected to the Eskom network and have a total capacity of 785 MW and an associated investment value of R14.8-billion. A total of 30 generation facilities are connected to the municipal distribution network, with a capacity of 27 MW and investment value of R2.5-billion. The three provinces with the highest number of new registered generation facilities in the second quarter were Gauteng (19 projects for 11 MW), Western Cape (17 projects for 119 MW) and KwaZulu-Natal (15 projects for 7 MW). The top three provinces by capacity were the Free State (251 MW across 7 projects), North West (192 MW across 11 projects) and the Western Cape. The 11 projects registered in the North West province during the period carried the highest investment value, at R5.8-billion. The average investment cost for the second quarter of the 2023/24 financial year is R19 000/kW, Nersa states.

The National Energy Regulator of South Africa (Nersa) reports that it registered a further 98 generation facilities - with a combined capacity of 908 MW and an investment value of R17.3-billion - during the second quarter of its 2023/24 financial year. These registrations, which took place from July to September, raise to 1 185 the total number of generation facilities registered since 2018. However, the pace of registrations accelerated markedly after a 2021 reform was made to Schedule 2 of the Electricity Regulation Act, lifting the licence-exemption cap from 1 MW to 100 MW. That cap was subsequently removed entirely to accelerate investment as power disruptions intensified. In August, the National Energy Crisis Committee reported that, since the implementation of the regulatory changes, the pipeline of private sector generation projects had increased to over 100 projects representing more than 10 000 MW of capacity. Projects registered with Nersa to date, meanwhile, have a combined capacity of 5 785 MW and an investment value of R111-billion and exclude the thousands of smaller installations that have been implemented by households and businesses in response to loadshedding. Eskom has estimated that some 4 400 MW of behind-the-meter generation was installed between July 2022 and July 2023, mostly in the form of rooftop solar. Nersa reports that 92 of the registrations during the second quarter were for solar photovoltaic (PV) facilities, which make up 71% of the capacity registered. The balance comprises two solar PV projects with battery energy storage systems, two co-generators and two wind projects. Regulator Member responsible for Electricity Regulation Nhlanhla Gumede commended the uptake in registrations, which he indicated had been processed by Nersa within an average of five working days. However, he recommended that future registration applications for generation facilities of variable energy sources be coupled with battery storage. Sixty-eight of the generation facilities registered during the period are connected to the Eskom network and have a total capacity of 785 MW and an associated investment value of R14.8-billion. A total of 30 generation facilities are connected to the municipal distribution network, with a capacity of 27 MW and investment value of R2.5-billion. The three provinces with the highest number of new registered generation facilities in the second quarter were Gauteng (19 projects for 11 MW), Western Cape (17 projects for 119 MW) and KwaZulu-Natal (15 projects for 7 MW). The top three provinces by capacity were the Free State (251 MW across 7 projects), North West (192 MW across 11 projects) and the Western Cape. The 11 projects registered in the North West province during the period carried the highest investment value, at R5.8-billion. The average investment cost for the second quarter of the 2023/24 financial year is R19 000/kW, Nersa states.

Eskom has confirmed that it has delivered a curtailment framework, as well as its proposed Gated Generator Connection Process (GGCP) to the National Energy Regulator of South Africa (Nersa) for approval. However, it is not yet clear whether either will be approved ahead of the restart of public procurement for new independent power producer (IPP) capacity. Minerals Resources and Energy Minister Gwede Mantashe reported this week that Bid Window Seven (BW7) of the Renewable Energy Independent Power Producer Procurement Programme would be launched "within two weeks", along with an inaugural gas-to-power bidding round and a second battery storage bid window. The renewables bidding round was initially expected to be launched by mid-year following the partial failure of the previous round, when no wind project advanced to preferred-bidder status after Eskom indicated that all grid connection capacity in the Eastern, Northern and Western Cape provinces had been absorbed. The subsequent renewables round, together with the gas-to-power and second battery bid window, had since been delayed largely because of ongoing uncertainty over what grid capacity was still available and whether Eskom would implement curtailment to unlock capacity in the grid-constrained provinces. In October, Eskom published its latest Generation Connection Capacity Assessment (GCCA), indicating there to be 19.9 GW of grid-connection capacity available nationally, but with zero capacity remaining in the three Cape provinces and the Hydra Central area, which borders the Cape provinces and the Free State. In November, however, Eskom indicated that curtailment studies had been undertaken to provide "developers with an alternate option if they are still keen to connect in these constrained areas". It also indicated that a curtailment addendum to the GCCA would be published that could unlock 4 GW of connection capacity in the Eastern and Western Cape provinces. Speaking from the same platform where Mantashe announced the new IPP bidding timeframe, Eskom Transmission MD Segomoco Scheppers confirmed that the curtailment framework and GGCP were currently before Nersa but did not comment on when the regulator was expected to decide on the documents. IPP Office head Bernard Magoro indicated that there had been ongoing engagements with Eskom following BW6 to find solutions to the grid-access issues that rose to prominence during the round, as well as to ensure an "orderly approach" to grid allocation, in light of regulatory changes that had made it possible for private-offtaker projects of any size to proceed in the absence of a licence, including when these were grid-connected. Eskom's GGCP proposes a shift from a one-on-one assessment of the connection requests to a clustered process, whereby aggregated grid adequacy and stability assessments will be made in batches. The GGCP also envisages "rolling cycles of procurement" that alternate between the public and private offtaker programmes, with grid cost estimate letters to be specific to each programme. It was not immediately certain whether Nersa intended hosting hearings on either the curtailment framework or the GGCP.

Eskom has confirmed that it has delivered a curtailment framework, as well as its proposed Gated Generator Connection Process (GGCP) to the National Energy Regulator of South Africa (Nersa) for approval. However, it is not yet clear whether either will be approved ahead of the restart of public procurement for new independent power producer (IPP) capacity. Minerals Resources and Energy Minister Gwede Mantashe reported this week that Bid Window Seven (BW7) of the Renewable Energy Independent Power Producer Procurement Programme would be launched "within two weeks", along with an inaugural gas-to-power bidding round and a second battery storage bid window. The renewables bidding round was initially expected to be launched by mid-year following the partial failure of the previous round, when no wind project advanced to preferred-bidder status after Eskom indicated that all grid connection capacity in the Eastern, Northern and Western Cape provinces had been absorbed. The subsequent renewables round, together with the gas-to-power and second battery bid window, had since been delayed largely because of ongoing uncertainty over what grid capacity was still available and whether Eskom would implement curtailment to unlock capacity in the grid-constrained provinces. In October, Eskom published its latest Generation Connection Capacity Assessment (GCCA), indicating there to be 19.9 GW of grid-connection capacity available nationally, but with zero capacity remaining in the three Cape provinces and the Hydra Central area, which borders the Cape provinces and the Free State. In November, however, Eskom indicated that curtailment studies had been undertaken to provide "developers with an alternate option if they are still keen to connect in these constrained areas". It also indicated that a curtailment addendum to the GCCA would be published that could unlock 4 GW of connection capacity in the Eastern and Western Cape provinces. Speaking from the same platform where Mantashe announced the new IPP bidding timeframe, Eskom Transmission MD Segomoco Scheppers confirmed that the curtailment framework and GGCP were currently before Nersa but did not comment on when the regulator was expected to decide on the documents. IPP Office head Bernard Magoro indicated that there had been ongoing engagements with Eskom following BW6 to find solutions to the grid-access issues that rose to prominence during the round, as well as to ensure an "orderly approach" to grid allocation, in light of regulatory changes that had made it possible for private-offtaker projects of any size to proceed in the absence of a licence, including when these were grid-connected. Eskom's GGCP proposes a shift from a one-on-one assessment of the connection requests to a clustered process, whereby aggregated grid adequacy and stability assessments will be made in batches. The GGCP also envisages "rolling cycles of procurement" that alternate between the public and private offtaker programmes, with grid cost estimate letters to be specific to each programme. It was not immediately certain whether Nersa intended hosting hearings on either the curtailment framework or the GGCP.

The Energy Regulator has approved six-year negotiated pricing agreements (NPAs) for ferrochrome smelters operated in South Africa by both Glencore-Merafe Chrome Venture and Samancor Chrome. The National Energy Regulator of South Africa (Nersa) issued a statement on November 6 confirming NPAs had been approved for four of Glencore-Merafe Chrome Venture's ferrochrome operations in Mpumalanga, Limpopo and North West, as well as for six of Samancor Chrome's smelter operations in Mpumalanga, Limpopo and North West. Eskom submitted the applications to the regulator on May 9 in line with the interim long-term NPA framework approved by Mineral Resources and Energy Minister Gwede Mantashe in August 2020. The framework targets large power users with minimum consumption thresholds of 80 GWh and/or load factors greater than 70% and where electricity is a large cost component. The interim long-term NPA framework aims to incentivise, through discounted tariffs, the retention of operations in strategic sectors that would otherwise be severely curtailed or shut down without discounted rates. In the past, tariffs have been indexed to the price of the commodity being produced, but it was not immediately clear whether that was the case for the Glencore-Merafe and Samancor Chrome NPAs. Nersa reported that Eskom will implement separate six-year NPAs for Glencore-Merafe Chrome Venture's Boshoek (130 MVA), Wonderkop (310 MVA), Lion (275 MVA) and Lydenburg (165 MVA) operations. The Samancor Chrome operations, meanwhile, collectively amount to 1 363 MVA, or projected baseload sales of about 7.6 TWh yearly, and include: Ferrometals (270 MVA), Middelburg Ferrochrome (286 MVA), Tubatse Ferrochrome (245 MVA), Tubatse Alloy (220 MVA), TC Smelters (140 MVA) and Dikwena Chrome (202 MVA). The NPAs could be implemented one full calendar month after Nersa's approval and terminate 72 calendar months thereafter. Nersa did not provide tariff details but indicated that the NPAs were set at a level to ensure the sustainability of the operations, while covering Eskom's cost of supply. It also did not confirm whether the agreement included a clause for Eskom to interrupt supply, which is the case with other NPAs. The State-owned utility, whose tariffs have been rising steeply for several years, has indicated previously that to qualify for an NPA larger consumers need to show that they would not be sustainable on the applicable standard tariff.

The Energy Regulator has approved six-year negotiated pricing agreements (NPAs) for ferrochrome smelters operated in South Africa by both Glencore-Merafe Chrome Venture and Samancor Chrome. The National Energy Regulator of South Africa (Nersa) issued a statement on November 6 confirming NPAs had been approved for four of Glencore-Merafe Chrome Venture's ferrochrome operations in Mpumalanga, Limpopo and North West, as well as for six of Samancor Chrome's smelter operations in Mpumalanga, Limpopo and North West. Eskom submitted the applications to the regulator on May 9 in line with the interim long-term NPA framework approved by Mineral Resources and Energy Minister Gwede Mantashe in August 2020. The framework targets large power users with minimum consumption thresholds of 80 GWh and/or load factors greater than 70% and where electricity is a large cost component. The interim long-term NPA framework aims to incentivise, through discounted tariffs, the retention of operations in strategic sectors that would otherwise be severely curtailed or shut down without discounted rates. In the past, tariffs have been indexed to the price of the commodity being produced, but it was not immediately clear whether that was the case for the Glencore-Merafe and Samancor Chrome NPAs. Nersa reported that Eskom will implement separate six-year NPAs for Glencore-Merafe Chrome Venture's Boshoek (130 MVA), Wonderkop (310 MVA), Lion (275 MVA) and Lydenburg (165 MVA) operations. The Samancor Chrome operations, meanwhile, collectively amount to 1 363 MVA, or projected baseload sales of about 7.6 TWh yearly, and include: Ferrometals (270 MVA), Middelburg Ferrochrome (286 MVA), Tubatse Ferrochrome (245 MVA), Tubatse Alloy (220 MVA), TC Smelters (140 MVA) and Dikwena Chrome (202 MVA). The NPAs could be implemented one full calendar month after Nersa's approval and terminate 72 calendar months thereafter. Nersa did not provide tariff details but indicated that the NPAs were set at a level to ensure the sustainability of the operations, while covering Eskom's cost of supply. It also did not confirm whether the agreement included a clause for Eskom to interrupt supply, which is the case with other NPAs. The State-owned utility, whose tariffs have been rising steeply for several years, has indicated previously that to qualify for an NPA larger consumers need to show that they would not be sustainable on the applicable standard tariff.

Chairperson of Democratic Alliance Federal Council, Helen Zille says load shedding has caused economic collapse and massive unemployment in South Africa. Zille's remarks come in light of this the DA taking the National Energy Regulator of South Africa (Nersa) to court following the regulator's authorisation of a 31,4% electricity tariff increase for Eskom. The matter is being heard at the North Gauteng High Court. Sakina Kamwendo spoke to SABC reporter, Naledi Ngcobo.

The National Energy Regulator of South Africa (Nersa) has licensed the National Transmission Company of South Africa (NTCSA) to operate the country's transmission system. Eskom has welcomed the decision of the NERSA. Eskom will be divided into three entities: generation, distribution, and transmission, which form a key part of Eskom's Turnaround Plan as detailed in the Department of Public Enterprises' Roadmap for Eskom in a Reformed Electricity Supply Industry. Sakina Kamwendo spoke to Full-time Regulator Member primarily responsible for Electricity Regulation at NERSA. Nhlanhla Gumede

A new and updated edition of the loadshedding code of practice, which includes up to 16 stages of loadshedding, has been finalised by an expert group and delivered to the National Energy Regulator of South Africa (Nersa) for approval. The current NRS 048-9 edition, known as Edition 2, has protocols governing up to eight stages of loadshedding, which would involve rotational cuts of up to 16 hours in a 32-hour cycle. Edition 3 has increased the number of stages to 16, with the highest stage involving 24 hours of loadshedding in a 32-hour cycle. To date, Eskom has not breached Stage 6, which has been implemented on several occasions over the past two years as the utility has struggled to balance supply and demand largely because its undermaintained coal fleet has become unreliable and unpredictable. The new NRS 048-9 edition has been drafted and adopted by the National Rationalised Specifications Association of South Africa, or the NRS Association, a voluntary forum that includes representatives from Eskom, the country's eight metros, municipalities, the South African Bureau of Standards and Nersa. The document itself has not been shared with the public but is expected to be released by Nersa when it conducts a public consultation process on the proposed new code of practice. NRS Association chairperson Vally Padayachee insists that the new edition should not be viewed as an indication that Stage 16 loadshedding is inevitable. Rather, the updated protocols are designed to improve the state of readiness among the 750 or so individuals responsible for grid stability across the national and municipal system to take the action needed to prevent a national blackout. Padayachee reports that the main rationale for increasing the number of stages is to mitigate the potential for human error that could arise from the fact that once Stage 8 is breached under the current protocols, system operators rely on “contingency measures” rather than a clearly defined code of practice. “Even though Eskom's performance this winter has been better than expected, there is still potential for loadshedding of up to Stage 8 or beyond should demand climb significantly due to cold weather,” he says, noting the coldest periods historically are during the third week of July and the first week of August. Ahead of winter, Eskom warned that Stage 8 loadshedding was a possibility. However, lower-than-expected demand and an improved performance from some coal stations have enabled the utility to reduce the intensity of loadshedding in recent weeks. Electricity Minister Dr Kgosientsho Ramokgopa has highlighted, in particular, an improving breakdown trend across the coal fleet, which has fallen to within touching distance of the 15 000 MW target set by Eskom as one where both loadshedding and the use of diesel could be reduced to more tolerable levels. Demand, however, has been noticeably lower than initially forecast, with daily peaks of about 30 000 MW, instead of the 34 000 MW-plus peaks forecast ahead of winter. That said, Padayachee believes the new loadshedding code of practice will further bolster resilience as it outlines “mechanically” what system operators, who have been operating under extreme conditions, need to do to ensure that there is no total grid collapse.

South Africans are bracing themselves for yet another hike in the price of electricity the after the National Energy Regulator of South Africa (NERSA) approved an average increase in the electricity tariff of 18.65% for the 2023/24 financial year and a 12.74% increase for the following year. The increase will take effect from 1 April for clients that source their electricity directly from Eskom, while municipalities will increase their prices from 1 July. Sakina Kamwendo spoke to Senior Financial analyst at the Electricity department at NERSA, Dr. Bongani Khonjelwayo..

DA leader John Steenhuisen says they will vehemently oppose the proposed eighteen-point- percent electricity taffif hike for Eskom. He led thousands of his supporters in march against loadshedding, to the ANC head offices in Johannesburg today. The official opposition accused the ANC of deliberately engineering the rolling blackouts. Last week the National Energy Regulator of South Africa - NERSA appoved the tarrfi hike for electricity for this year. Steenhuisen says South Africans can no longer take the responsibility of the ANC's mismanagement. Sakina Kamwendo spoke to SABC reporters Ntebo Mokobo in Johannesburg and Mlamli Maneli in Cape Town.

Eskom CFO Calib Cassim told lawmakers on Tuesday that the State-owned utility had spent R18-billion on diesel for its current financial year-to-date, which began in April last year, and that it would probably need to spend another R4-billion until the end of March, raising the overall diesel spend for the year to R22-billion. The utility was continuing to operate its diesel-fuelled open-cycle gas turbines (OCGTs) despite having announced in November that it was no longer in a financial position to do so. That said, outgoing CEO André de Ruyter told the Standing Committee on Public Accounts that, had it not been for its financial constraints, Eskom would have burnt more diesel to offset the coal fleet's poor performance and limit loadshedding stages. However, chairperson Mpho Makwana revealed that an agreement had been reached with the National Energy Crisis Committee on January 23 regarding a diesel funding model, the details of which were being finalised. “While this diesel funding model is being put in place, we are funding the diesel from internal savings and reallocations from other priorities,” De Ruyter told the committee members. “So, our CFO has had to do some very nifty footwork in order to release the cash from other sources to enable us to buy as much diesel as we can responsibly procure. [But] of course there's a limit . . . and, therefore, we have had to conserve our reserves to responsible levels.” He also provided insight into some of the initiatives that Eskom had proposed to government to assist it in buying diesel as cost-effectively as possible. One of these included an application to the Department of Mineral Resources and Energy for a wholesale licence to enable it to purchase diesel at the level of the Basic Fuel Price, which could have yielded billions in savings. The application had been rejected, however, while the South African Revenue Service had, to date, rebuffed its attempts to secure tax rebates to which Eskom felt it was entitled. Cassim said expenditure on diesel to operate its OCGTs at Ankerlig and Gourikwa had already exceeded the budget for the year by more than R10-billion and he indicated that there were also likely to be further shortfalls in 2023/24 and 2024/25. Eskom had applied to the National Energy Regulator of South Africa (Nersa) for revenue to operate its OCGT plants at a load factor of 12% for the coming two financial years, which would have translated to allowable revenue of about R17-billion a year for diesel alone. In approving the recent hikes of 18.65% for 2023/24 and 12.74% for 2024/25, Nersa said Eskom should operate the plants at a load factor of 6%, which would translate to a diesel budget of about R8.5-billion for the coming two financial years. Cassim said the diesel budget shortfall would, thus, probably be about R16-billion over the coming two financial years, depending on actual oil prices, final diesel volumes and coal-fleet performance. De Ruyter refused to be drawn on the debate as to whether Eskom should forgo the tariff increase in light of cost-of-living pressures; one that had intensified in light of various legal actions against the hikes and President Cyril Ramaphosa's call for the board to find ways to limit the increases. “I won't comment on cost-reflective tariffs – that being a particularly sensitive and litigious topic at this point in time – save to say that there are essentially two sources of enabling Eskom to recover its costs: either from those who consume electricity or from the taxpayer by way of transfers from the National Treasury. “And this is a choice that those who take these decisions need to make,” he said.

The National Energy Crisis Committee (NECOM), which is overseeing the implementation of the National Energy Plan announced by President Cyril Ramaphosa in July, presented a ‘Roadmap to end Loadshedding' to various partners and stakeholders this week. The presentation has not been formally released and the committee is yet to make a public briefing. It is, thus, possible that the roadmap presented will be adjusted, particularly given intensive recent discussions on the crisis and reports that Ramaphosa had “locked NECOM in a room” this week with an instruction to find solutions. The roadmap presented covers this year and next, as well as the period after 2024 and outlines what energy and capacity could be injected over the period as a result of the various interventions that have been announced as part of the Energy Action Plan. Besides assuming that 6 000 MW could be introduced over the coming two years as a result of an improved performance from Eskom's coal fleet, especially from Tutuka, Kendal, Duvha, Majuba, Medupi and Kusile, the roadmap indicates that 8 822 MW could be added this year from other sources. Notably the roadmap makes no reference, however, to securing additional diesel for the open-cycle gas turbines, despite a renewed call from business for government to fund Eskom's diesel use to reduce loadshedding stages in the short term. Eskom has already more than exhausted its diesel budget for the current financial year and the National Energy Regulator of South Africa (Nersa) has granted Eskom revenue of R8.4-billion for the coming financial year, beginning on April 1, against an Eskom request for R16.9-billion. The specific interventions outlined for 2023 outside of the generation recovery plan under way at Eskom include sourcing: 2 880 MW from the recovery of Kusile Units 1, 2 and 3, as well as the completion of Unit 5. Currently, three Kusile units are offline following the October 23 structural collapse of the chimney duct, which is forecast to take months to repair; up to 1 625 MW arising from imports from neighbouring countries; 1 597 MW from private embedded generation projects; 1 350 MW from the standard offer and emergency generation programme; some 850 MW from rooftop solar; about 250 MW arising from demand-response and energy-efficiency programmes; some 200 MW from the first phase of Eskom battery roll-out; and 70 MW arising from existing independent power producers (IPPs) with surplus energy. During 2024, the roadmap estimates that a further 8 665 MW could be injected from municipal procurement (1 500 MW); emergency power projects (775 MW); bid window five renewables projects (794 MW), additional demand response (1 200 MW), the procurement of IPP battery storage (513 MW); the return to service of Medupi Unit 4 and the completion of Kusile Unit 6 (1 520 MW); additional embedded generation (2 125 MW) and Eskom just transition and battery projects (238 MW). Beyond 2024, the roadmap indicates that more than 29 000 MW could be added from various public and private procurement initiatives. The presentation also insists that the Energy Action Plan, which has been operationalised to include nine workstreams, provides a clear way out of this crisis. It acknowledges, however, that the electricity system will remain under pressure in the short term, which, given the current public mood, is likely to add further pressure on Eskom and government as the backlash against loadshedding intensifies. The presentation also highlights measures that should be taken to accelerate the implementation of the Energy Action Plan, including six specific actions to add new capacity in the short-term, namely: improving Eskom plant performance through the ‘Generation Recovery Plan'; the procurement of emergency power, for which no details are provided but which is likely to be seen as code for powerships; the import of additional power from neighbouring countries; the finalisation of a feed-in tariff and net-metering guidelines “to...

The Energy Intensive Users Group (EIUG) has confirmed that its large mining and industrial members have a 4 GW-plus pipeline of generation projects that can be connected to the grid over the next five years to help close the electricity supply gap. However, it argues that other supply- and demand-side interventions are urgently required to reduce the intensity of both loadshedding and load curtailment. “We are of the view that Eskom and government alone will not be able to resolve these issues soon and, hence, other options need to be explored considering that this is a crisis and business-as-usual contributions are no longer adequate,” CEO Fanele Mondi tells Engineering News. Mondi believes there is particular potential for South Africa to support an “aggressive roll-out” of rooftop solar in the commercial and residential sectors over the short-term and that this should be incentivised as a priority intervention. Rooftop solar photovoltaic (PV) systems, he argues, are not constrained by the same permitting, funding and grid-access delays that are currently afflicting utility scale projects. In December, the Department of Mineral Resources and Energy announced that only six utility-scale PV projects, with a combined capacity of just 860 MW, had advanced to preferred-bidder status, following a bidding round that had been expanded to procure 4 200 MW of both PV and wind projects. Not one of the 23 wind projects that bid for the round's 3 200 MW wind allocation was appointed, owing to grid constraints. “Economic incentives and net metering will help to expedite the roll-out to reach a stage where Eskom's pumped-storage schemes can be topped up from new rooftop PV generation, which will have a positive double whammy effect on the current situation.” Eskom already has net-billing tariffs for agriculture, commercial and industrial customers that provide a credit for energy exported at the same energy rate the customer pays for consumption. However, the National Energy Regulator of South Africa (Nersa) still needs to approve the residential tariff, dubbed Homeflex, which will allow Eskom to offer net-billing to residential customers. Eskom has also finalised its standard offer, which extends a three-year price for the purchase of power and it is understood the recent tariff hike approved by Nersa includes revenue specifically for this offer, which could evolve into a national feed-in tariff in future. In a recent update, the National Energy Crisis Committee (NECOM) indicated that the standard offer had the potential to secure 1 600 MW in the near-term. Mondi believes there is also potential for large power users to undertake co-ordinated maintenance so as to manage demand in a way that provides Eskom with space to do the maintenance the utility needs to perform to improve the energy availability factor of its coal power stations. In parallel, however, the EIUG says action needs to be taken to expedite the execution of public and private generation projects, including by strengthening and expanding the grid and ancillary services to maximise renewable energy penetration and by removing any remaining regulatory constraints. Mondi also believes more could be done to encourage investment in energy storage through financial incentives and by creating ancillary service products to be sold to the system operator. “This can be used to reduce demand during peak periods and stabilise the grid.” Given that EIUG members collectively account for over 40% of the electrical energy consumed, the organisation also has strong views on the possible demand-side instruments that could be deployed. “Demand-side management is the fastest and cheapest response, and the previous demand-side management programme was successful in saving significant energy, which eased the pressure on the grid, allowing for lower stages of load shedding and/or space for maintenance,” Mondi highlights. To be effective, however, the EIUG says the measures need to be economica...

The National Energy Regulator of South Africa-Nersa has given Eskom a go ahead to increase tarrifs by 18-point-65 percent. The increases will be effective from the first of April this year. The National Energy Regulator of South AFrica - NERSA - said the decision to increase tariffs was a tough one given the financial constrains consumers are facing. Businesses across the country are severely affected by the rolling blackouts especially small business owners who are struggling to keep their entities afloat. Some businesses have been forced to permanently shut down as they could not absorb the additional costs, leading to further job losses. As things stand South Africans are being forced to make trade-offs between their food security and energy needs. For our Sunday Morning Discussion we spoke to Hilton Trollip, a Research Fellow from the Global Risk Governance Programme at the University of Cape Town (UCT) AND we are also joined by a frustrated small business owner Tumi Matjie who has had ENOUGH with load-shedding as it is affecting her ability to run a successful enterprise

State-owned energy utility Eskom says it appreciates the tough tariff decision made by the National Energy Regulator of South Africa (Nersa) for the 2023/24 and 2024/25 financial years, for which the utility has been granted tariff increases of 18.65% and 12.74%, respectively. The utility says it is confident the decision will positively contribute from a financial and sustainability point of view, while the revenue determination of R319-billion and R352-billion for the financial years, respectively, will allow a further migration towards a price level that reflects the efficient cost of producing electricity. Eskom has also apologised for the extent of loadshedding, saying it understands the severe impact it has on businesses and individuals. However, representatives from the business, labour and government spheres have expressed outrage over the persistent tariff increases that seem to lead nowhere. For South Africans, there is no escape from spiralling electricity prices and increased loadshedding, as customers are expected to shore up the country's failed electricity utility, comments the Organisation Undoing Tax Abuse (Outa). Although the 2023/24 financial year's grant came in below the 32% hike that Eskom requested, it is still well above the inflation-linked levels that most stakeholders believe should have been implemented. Outa says Eskom is experiencing huge pressure to improve its energy availability factor to above 65% to meet the regulator's conditions, while not being given the full extent of its 32% tariff increase application. The tariff increase is applicable for Eskom's direct customers, including municipalities, from April 1, while the increase from the municipalities' side will kick in from July. Outa, which formally requested Nersa to grant Eskom only a maximum consumer price index tariff increase, says it is outraged at government's failure to help South Africans weather this storm. The organisation believes government, particularly Mineral Resources and Energy Minister Gwede Mantashe can do better to fast-track independent power producer (IPP) procurement, instead of leaving Eskom with no choice but to use expensive diesel-powered open-cycle gas turbine generators to reduce loadshedding. While it is unclear what Nersa will do if Eskom does not meet its energy availability requirement, Outa Parliamentary adviser Liz McDaid says it is encouraging that Nersa is pushing Eskom on this. Outa commends Eskom for acknowledging that corruption adds to the breakdowns at coal-fired power stations, but believes more urgent and decisive efforts to address corruption are needed. Meanwhile, the Midvaal local municipality comments that the price of electricity has risen by more than 500% in the past 16 years, with Eskom continuing to receive billions of rands in bailouts, and, yet, South Africans currently face not having electricity for up to nine hours a day. On top of this, the municipality explains that increased loadshedding stages have an adverse effect on the municipality's electricity infrastructure and network, including equipment failures and increased instances of cable theft. The municipality is in the process of getting an embedded generation policy in place, which will result in the municipality introducing a feed-in tariff for solar users to supply energy into the grid. It encourages more municipalities to consider this route. Representing the broader voice of local government, South African Local Government Association says consumer debt to municipalities stands at R289-billion as it stands, without the impending tariff increase. The association deems the current electricity model - of municipalities putting a mark-up on Eskom's direct supply of electricity and then selling to households - as fundamentally flawed. The association is advocating for legislative reforms that will enable municipalities to generate their own electricity and purchase electricity from IPPs. Moreover, SALGA would like to see m...

The Gauteng High Court has granted the National Energy Regulator of South Africa (Nersa) an extension, to make the final decision on Eskom's revenue application for 2023/24. South Africans will wait a little longer to know how much extra to pay for electricity. Energy Expert Clyde Mallinson joins Abongile to consider what to make of the delay.See omnystudio.com/listener for privacy information.

The National Energy Regulator of South Africa (Nersa) has refused to concur with two electricity procurement determinations submitted by the Department of Mineral Resources and Energy (DMRE) under Section 34 of the Energy Regulation Act – including one for a 3 000 MW Combined Cycle Gas Technology (CCGT) project that Eskom plans to develop in Richards Bay, KwaZulu-Natal. Earlier this year, the DMRE submitted three determinations for the regulator's concurrence, which is required before public procurement can take place, including: a determination for the procurement of 1 000 MW of new generation capacity from technologies such as landfill, biogas and co-generators; the procurement of 14 791 MW of new generation capacity from renewables and storage by independent power producers; and a determination for the procurement of 3 000 MW of new CCGT. During a meeting on December 14, the Energy Regulator voted against concurring with the 1 000 MW determination or the 3 000 MW of CCGT, while approving the determination for 14 791 MW of new generation capacity from renewables and storage in line with the Integrated Resource Plan of 2019 (IRP 2019). Concurrence was not provided for the 1 000 MW on the basis that a Section 34 determination was the incorrect instrument, as the energy could be procured by Eskom under a Short-Term Power Procurement Programme (STPPP) and the costs recouped through the tariff. The Energy Regulator made the decision despite the previous STPPP having been mothballed partly because Nersa had refused to treat it as a pass-through cost when making Eskom revenue determinations. The 3 000 MW CCGT determination was also rejected on the basis that a request to deviate from the IRP 2019 should be pursued as a Section 34 determination. In its reasons for decision, which were not immediately shared, Nersa would reportedly make a recommendation for the approval to be sought using another section of the Act.

The Energy Regulator has postponed deciding on Eskom's tariffs for 2023/24 and 2024/25 after the Electricity Subcommittee (ELS) of the National Energy Regulator of South Africa (Nersa) requested more time to finalise its recommendation – this only ten days out from a looming December 24 deadline for the regulator to finalise its decision as stipulated in an order made earlier in the year by the High Court. Eskom's fifth Multi-Year Price Determination (MYPD5) revenue application, if fully approved, would translate into a 32% hike in its standard tariff on April 1, 2023, followed by a 9.74% increase in 2024/25. The increase requested by Eskom is premised on allowable revenue of R335-billion, before any possible regulatory clearing account (RCA) adjustments and before catering for R15-billion arising from a settlement reached after the Supreme Court of Appeal ordered that the remaining portion of a R69-billion government equity injection, which was found to have been deducted incorrectly from Eskom's MYPD4 revenue, be recouped. In terms of the settlement, the outstanding R59-billion would be recovered during the financial years from 2024 to 2027. The Energy Regulator was scheduled to make an MYPD5 determination on Wednesday, but following a protracted workshop held to consider the application a total of 14 issues of concern were raised by regulatory members. As a result, the ELS requested the Energy Regulator, Nersa's highest decision-making body, to provide it with more time to finalise its recommendation. While the Christmas Eve court-ordered deadline was highlighted, no firm timeframe was provided for when a final decision would be made. Instead, officials were instructed to finalise a “project plan” by the close of business on December 14 for resolving the outstanding matters. The Energy Regulator also postponed approving Eskom's R10-billion RCA application for the 2020/21 financial year, which formed part of the MYPD4 revenue cycle. During a meeting on November 29, the Energy Regulator referred the RCA decision back to the ELS for reconsideration, arguing that several questions about the application remained unanswered. These issues had not been resolved satisfactorily by December 14 and the ELS, thus, also requested more time. Approval was provided, however, on an implementation plan for RCAs arising from the 2019/20 and 2020/21 financial years, which were approved by the Energy Regulator on December 6, 2021, and November 8, 2022, respectively. Collectively the RCAs amount to R3.46-billion and the Energy Regulator approved that these would be liquidated over a three-year period, beginning in 2024/25.

The Energy Regulator has postponed deciding on Eskom's tariffs for 2023/24 and 2024/25 after the Electricity Subcommittee (ELS) of the National Energy Regulator of South Africa (Nersa) requested more time to finalise its recommendation – this only ten days out from a looming December 24 deadline for the regulator to finalise its decision as stipulated in an order made earlier in the year by the High Court. Eskom's fifth Multi-Year Price Determination (MYPD5) revenue application, if fully approved, would translate into a 32% hike in its standard tariff on April 1, 2023, followed by a 9.74% increase in 2024/25. The increase requested by Eskom is premised on allowable revenue of R335-billion, before any possible regulatory clearing account (RCA) adjustments and before catering for R15-billion arising from a settlement reached after the Supreme Court of Appeal ordered that the remaining portion of a R69-billion government equity injection, which was found to have been deducted incorrectly from Eskom's MYPD4 revenue, be recouped. In terms of the settlement, the outstanding R59-billion would be recovered during the financial years from 2024 to 2027. The Energy Regulator was scheduled to make an MYPD5 determination on Wednesday, but following a protracted workshop held to consider the application a total of 14 issues of concern were raised by regulatory members. As a result, the ELS requested the Energy Regulator, Nersa's highest decision-making body, to provide it with more time to finalise its recommendation. While the Christmas Eve court-ordered deadline was highlighted, no firm timeframe was provided for when a final decision would be made. Instead, officials were instructed to finalise a “project plan” by the close of business on December 14 for resolving the outstanding matters. The Energy Regulator also postponed approving Eskom's R10-billion RCA application for the 2020/21 financial year, which formed part of the MYPD4 revenue cycle. During a meeting on November 29, the Energy Regulator referred the RCA decision back to the ELS for reconsideration, arguing that several questions about the application remained unanswered. These issues had not been resolved satisfactorily by December 14 and the ELS, thus, also requested more time. Approval was provided, however, on an implementation plan for RCAs arising from the 2019/20 and 2020/21 financial years, which were approved by the Energy Regulator on December 6, 2021, and November 8, 2022, respectively. Collectively the RCAs amount to R3.46-billion and the Energy Regulator approved that these would be liquidated over a three-year period, beginning in 2024/25.

The National Energy Regulator of South Africa (Nersa) has refused to concur with two electricity procurement determinations submitted by the Department of Mineral Resources and Energy (DMRE) under Section 34 of the Energy Regulation Act – including one for a 3 000 MW Combined Cycle Gas Technology (CCGT) project that Eskom plans to develop in Richards Bay, KwaZulu-Natal. Earlier this year, the DMRE submitted three determinations for the regulator's concurrence, which is required before public procurement can take place, including: a determination for the procurement of 1 000 MW of new generation capacity from technologies such as landfill, biogas and co-generators; the procurement of 14 791 MW of new generation capacity from renewables and storage by independent power producers; and a determination for the procurement of 3 000 MW of new CCGT. During a meeting on December 14, the Energy Regulator voted against concurring with the 1 000 MW determination or the 3 000 MW of CCGT, while approving the determination for 14 791 MW of new generation capacity from renewables and storage in line with the Integrated Resource Plan of 2019 (IRP 2019). Concurrence was not provided for the 1 000 MW on the basis that a Section 34 determination was the incorrect instrument, as the energy could be procured by Eskom under a Short-Term Power Procurement Programme (STPPP) and the costs recouped through the tariff. The Energy Regulator made the decision despite the previous STPPP having been mothballed partly because Nersa had refused to treat it as a pass-through cost when making Eskom revenue determinations. The 3 000 MW CCGT determination was also rejected on the basis that a request to deviate from the IRP 2019 should be pursued as a Section 34 determination. In its reasons for decision, which were not immediately shared, Nersa would reportedly make a recommendation for the approval to be sought using another section of the Act.

President Cyril Ramaphosa reports that the pipeline of confirmed private embedded generation projects has increased to 100 with a total combined capacity of around 9 000 MW. The President confirmed the figure in a series of written responses to Parliamentary questions posed by Democratic Alliance permanent delegate to the National Council of Provinces from the North West, Carin Visser. The questions focused on what progress, if any, had been made since both the President's State of the Nation address, which had electricity security as a major theme, and his July 25 announcement of a series of initiatives to tackle intensifying loadshedding. South Africa has experienced its worst-ever year for rotational power cuts with more than 155 days affected by the beginning of November and the outlook for the coming two years remaining bleak. In his written responses, Ramaphosa said the amendment to Schedule 2 of the Electricity Regulation Act – which allowed generation facilities below 100 MW in size to wheel power across the grid and to sell power to multiple customers without requiring a licence – had created a vibrant market. He added that the 100 MW licensing threshold was in the process of being lifted entirely by a further reform to Schedule 2 that was in progress. The registration process with the National Energy Regulator of South Africa (Nersa) for such generation projects had also been “substantially simplified” to shorten timeframes for project approval. “These measures will enable significantly more generation capacity to be added to the grid from independent power producers (IPPs).” The President also noted that a National Energy Crisis Committee had been established to oversee the implementation of the Eskom and non-Eskom initiatives announced in July and provided the following update on the non-Eskom supply interventions, including: the submission by Eskom of a net-metering tariff for residential customers to Nersa, with work under way to develop a feed-in tariff mechanism to further incentivise uptake of rooftop solar; The development by Eskom of a standard offer programme to purchase available power from existing installations, as well as an emergency generation programme to procure power that can be made available at times of peak demand; the recruitment of skilled personnel, including former Eskom staff, to support operational improvements at the utility, with three appointments of former Eskom employees having been made at power station manager level for Kendal, Koeberg and Medupi; and the importation of an additional 200 MW of power from neighbouring countries, with negotiations under way to secure over 1 000 MW of additional power subject to agreements being finalised. It was also highlighted that several municipalities were at various stages of procuring power independently, while the President offered a mixed progress report on government's procurement of additional utility-scale generation from IPPs. “The first three preferred bidders from Bid Window 5 have signed project agreements and additional projects are expected to reach this milestone within the coming weeks,” he wrote, without making specific reference to the fact that a total of 25 wind and solar projects had meant to have progressed to construction under the round, but were facing difficulties in reaching financial close. “Three projects from the risk mitigation procurement programme representing 540 MW of solar photovoltaic and 225 MW of battery storage have reached financial close and commenced construction,” he added, again without stating that most of the projects, representing about 2 000 MW, had not progressed as planned. “The amount of new generation capacity to be procured through Bid Window 6 has been increased from 2 600 MW to 4 200 MW. [and] a request for proposals (RFP) has been released for over 500 MW of battery storage, which will be followed by a further RFP for 3 000 MW of gas power,” the President wrote. Eskom, meanwhile, was also...

Engineering News Editor Terence Creamer talks about the public hearings that were due to be held this week by the National Energy Regulator of South Africa (Nersa), but which had to be rescheduled owing to a poor response; what Nersa will do next; and the overall trend of waning interest in Nersa hearings.

Engineering News Editor Terence Creamer talks about the public hearings that were due to be held this week by the National Energy Regulator of South Africa (Nersa), but which had to be rescheduled owing to a poor response; what Nersa will do next; and the overall trend of waning interest in Nersa hearings.

The National Energy Regulator of South Africa (Nersa) has announced new dates for public hearings regarding its concurrence with three Ministerial determinations opening the way for the procurement of 18 771 MW of new electricity capacity, having initially cancelled hearings scheduled for this week, owing to a lack of response. In a notice issued on October 13, Nersa announced that the time for public comment regarding its concurrence with the determinations had been extended and invited stakeholders to attend rescheduled virtual hearings on October 20 and 21, between 13:00 and 17:00 on both days. Members of the public and stakeholders wishing to attend or present their views were requested to notify Nersa by October 19. The fact that no stakeholders had approached the regulator to make input on the determinations came as a surprise, given that some questions had been raised recently about a determination for 3 000 MW of gas-to-power. Initially, Nersa said that the 3 000 MW was based on an allocation for gas/diesel generation outlined in Table 5 of the Integrated Resource Plan of 2019, or IRP2019. It later circulated an erratum on September 12 clarifying that the 3 000 MW arose from an Eskom application to deviate from the IRP2019 for a combined cycle gas power plant at Richards Bay, in KwaZulu-Natal. It was anticipated that this deviation request would attract stakeholder comment, particularly given that some environmental groups had approached the Gauteng High Court recently to have the environmental authorisation for the project reviewed and set aside. In a judgment delivered on October 6, Judge Anthony Miller dismissed an application for the granting of the environmental authorisation to be reviewed and set aside. However, he ordered that a copy of the authorisation and the conditions attached, which had been published in English, be translated into isiZulu and published in at least two newspapers that circulated widely in the Richards Bay area of KwaZulu-Natal. The other two determinations delivered to Nersa in August by Mineral Resources and Energy Minister Gwede Mantashe are for 14 771 MW of wind and solar photovoltaic (PV) generation allocated for in the IRP2019, but not yet catered for in an existing Ministerial determination for wind and solar PV, and 1 000 MW of ‘Other Distributed Generation, Co-Gen, Biomass, Landfill' capacity for 2023 and 2024 also outlined in Table 5 of the IRP2019. In confirming the extension for comment, Nersa cautioned that should it not receive any requests to present at the advertised public hearing by the closing date of this notice, it “retains the right not to hold the scheduled hearing”.

The National Energy Regulator of South Africa (Nersa) has announced new dates for public hearings regarding its concurrence with three Ministerial determinations opening the way for the procurement of 18 771 MW of new electricity capacity, having initially cancelled hearings scheduled for this week, owing to a lack of response. In a notice issued on October 13, Nersa announced that the time for public comment regarding its concurrence with the determinations had been extended and invited stakeholders to attend rescheduled virtual hearings on October 20 and 21, between 13:00 and 17:00 on both days. Members of the public and stakeholders wishing to attend or present their views were requested to notify Nersa by October 19. The fact that no stakeholders had approached the regulator to make input on the determinations came as a surprise, given that some questions had been raised recently about a determination for 3 000 MW of gas-to-power. Initially, Nersa said that the 3 000 MW was based on an allocation for gas/diesel generation outlined in Table 5 of the Integrated Resource Plan of 2019, or IRP2019. It later circulated an erratum on September 12 clarifying that the 3 000 MW arose from an Eskom application to deviate from the IRP2019 for a combined cycle gas power plant at Richards Bay, in KwaZulu-Natal. It was anticipated that this deviation request would attract stakeholder comment, particularly given that some environmental groups had approached the Gauteng High Court recently to have the environmental authorisation for the project reviewed and set aside. In a judgment delivered on October 6, Judge Anthony Miller dismissed an application for the granting of the environmental authorisation to be reviewed and set aside. However, he ordered that a copy of the authorisation and the conditions attached, which had been published in English, be translated into isiZulu and published in at least two newspapers that circulated widely in the Richards Bay area of KwaZulu-Natal. The other two determinations delivered to Nersa in August by Mineral Resources and Energy Minister Gwede Mantashe are for 14 771 MW of wind and solar photovoltaic (PV) generation allocated for in the IRP2019, but not yet catered for in an existing Ministerial determination for wind and solar PV, and 1 000 MW of ‘Other Distributed Generation, Co-Gen, Biomass, Landfill' capacity for 2023 and 2024 also outlined in Table 5 of the IRP2019. In confirming the extension for comment, Nersa cautioned that should it not receive any requests to present at the advertised public hearing by the closing date of this notice, it “retains the right not to hold the scheduled hearing”.

The National Energy Regulator of South Africa (Nersa) cancelled two days of planned hearings called to receive public comment on the regulator providing its concurrence to three Ministerial determinations opening the way for the procurement of 18 771 MW of new electricity capacity. Nersa said that the hearings had been cancelled as no requests were received from stakeholders to make representations on the matter. In terms of Section 34 of the Electricity Regulation Act, the regulator is required to provide its concurrence prior the conclusion of the determination process by the Minister of Mineral Resources and Energy. It is also required to consult the public before offering such concurrence. This was confirmed in 2017 when the Western Cape High Court declared “unlawful and unconstitutional” government's 2013 and 2016 determinations relating to the procurement of 9 600 MW of new nuclear on the basis that they had not been subjected to Nersa-led public consultations. Three consultation papers were published by the regulator on August 26 regarding its concurrence with proposed Ministerial determinations delivered to it by Minerals Resources and Energy Minister Gwede Mantashe for the procurement of 14 771 MW of wind and solar photovoltaic (PV) generation, 3 000 MW of gas-to-power and 1 000 MW of ‘Other Distributed Generation, Co-Gen, Biomass, Landfill' capacity. The lack of concurrence on the new renewables Ministerial determination resulted in the National Energy Crisis Committee deciding recently to reduce the size of Bid Window Six of the renewables procurement programme from 5 200 MW to 4 200 MW. President Cyril Ramaphosa initially announced that the size of the round would be doubled from 2 600 MW, but the solar PV allocation provided for by a previous determination was insufficient to allow for a doubling in the PV allocation to 2 000 MW. Therefore, only the wind allocation was doubled to 3 200 MW, while the solar allocation was held at 1 000 MW. The potential opportunity cost became apparent after the bid submission deadline of October 3, when the IPP Office confirmed that the PV allocation was more than five-times oversubscribed with the combined capacity of the 33 solar PV bids being about 5 550 MW. By contrast the wind allocation was only 30% oversubscribed with the 23 bids having a combined capacity of about 4 100 MW. GAS DEVIATION In addition, Nersa circulated an erratum on September 12 in relation to it providing concurrence to a Ministerial determination for the procurement of 3 000 MW of gas-fired electricity. In its original consultation paper, the regulator said that the 3 000 MW was based on an allocation for gas/diesel generation outlined in Table 5 of the Integrated Resource Plan of 2019. In the erratum, however, it clarified that the 3 000 MW arose from an Eskom application to deviate from the IRP2019 for a combined cycle gas power plant at Richards Bay, in KwaZulu-Natal. It was anticipated that this deviation request would attract stakeholder comment, particularly given that some environmental groups had approached the courts recently to have the environmental authorisation for the project reviewed and set aside. That application failed. The fact that no requests were made to make oral submissions also raised questions as to whether the hearings had been sufficiently advertised, as notice of the hearings could not be found on the Nersa website, nor on its social media platforms. There had been newspaper adverts, however. Engineering News was unable to immediately confirm whether or not Nersa planned to readvertise the public hearings for a later date.

The National Energy Regulator of South Africa (Nersa) cancelled two days of planned hearings called to receive public comment on the regulator providing its concurrence to three Ministerial determinations opening the way for the procurement of 18 771 MW of new electricity capacity. Nersa said that the hearings had been cancelled as no requests were received from stakeholders to make representations on the matter. In terms of Section 34 of the Electricity Regulation Act, the regulator is required to provide its concurrence prior the conclusion of the determination process by the Minister of Mineral Resources and Energy. It is also required to consult the public before offering such concurrence. This was confirmed in 2017 when the Western Cape High Court declared “unlawful and unconstitutional” government's 2013 and 2016 determinations relating to the procurement of 9 600 MW of new nuclear on the basis that they had not been subjected to Nersa-led public consultations. Three consultation papers were published by the regulator on August 26 regarding its concurrence with proposed Ministerial determinations delivered to it by Minerals Resources and Energy Minister Gwede Mantashe for the procurement of 14 771 MW of wind and solar photovoltaic (PV) generation, 3 000 MW of gas-to-power and 1 000 MW of ‘Other Distributed Generation, Co-Gen, Biomass, Landfill' capacity. The lack of concurrence on the new renewables Ministerial determination resulted in the National Energy Crisis Committee deciding recently to reduce the size of Bid Window Six of the renewables procurement programme from 5 200 MW to 4 200 MW. President Cyril Ramaphosa initially announced that the size of the round would be doubled from 2 600 MW, but the solar PV allocation provided for by a previous determination was insufficient to allow for a doubling in the PV allocation to 2 000 MW. Therefore, only the wind allocation was doubled to 3 200 MW, while the solar allocation was held at 1 000 MW. The potential opportunity cost became apparent after the bid submission deadline of October 3, when the IPP Office confirmed that the PV allocation was more than five-times oversubscribed with the combined capacity of the 33 solar PV bids being about 5 550 MW. By contrast the wind allocation was only 30% oversubscribed with the 23 bids having a combined capacity of about 4 100 MW. GAS DEVIATION In addition, Nersa circulated an erratum on September 12 in relation to it providing concurrence to a Ministerial determination for the procurement of 3 000 MW of gas-fired electricity. In its original consultation paper, the regulator said that the 3 000 MW was based on an allocation for gas/diesel generation outlined in Table 5 of the Integrated Resource Plan of 2019. In the erratum, however, it clarified that the 3 000 MW arose from an Eskom application to deviate from the IRP2019 for a combined cycle gas power plant at Richards Bay, in KwaZulu-Natal. It was anticipated that this deviation request would attract stakeholder comment, particularly given that some environmental groups had approached the courts recently to have the environmental authorisation for the project reviewed and set aside. That application failed. The fact that no requests were made to make oral submissions also raised questions as to whether the hearings had been sufficiently advertised, as notice of the hearings could not be found on the Nersa website, nor on its social media platforms. There had been newspaper adverts, however. Engineering News was unable to immediately confirm whether or not Nersa planned to readvertise the public hearings for a later date.

The affordability of the 32% tariff hike being sought by Eskom for implementation on April 1 next year came under intense scrutiny on the last day of National Energy Regulator of South Africa (Nersa) public hearings. The regulator, which adjudicated the first year of the three-year fifth multiyear price determination (MYPD5) in January, when it approved a 9.61% increase for the 2023 financial year against an Eskom request for 20.5%, expects to decide for the 2024 and 2025 financial years by November 7. The utility has applied for allowable revenue of R351-billion for 2024 and R382-billion for 2025, inclusive of the R15-billion a year arising from a court order stipulating that the utility be allowed to recover, over five financial years, the full R69-billion equity injection Nersa incorrectly deducted from its MYPD4 allowable revenue. If granted, the standard Eskom tariff would rise to 172.6c/kWh on April 1, or by more than 32%. Eskom argues that even after such a steep hike, the tariff would remain below a cost-reflective level, which it calculates to be 185.7c/kWh. TERRIBLE INJUSTICE The utility's request was strongly opposed by all of the presenters on the third and final day of the hearings, including Cape Town Mayor Geordin Hill-Lewis, who urged Nersa to unequivocally reject the request and instead grant no increase above the current inflation rate. Warning that South Africans were being confronted with a cost-of-living crisis, Hill-Lewis argued that it would be a “terrible injustice” to expect electricity consumers to pay for previous mismanagement and corruption at the utility, particularly in the context of intensifying load-shedding. He noted, too, that all of the 70 bidders that responded to the city's recent tender to procure an initial 200 MW of renewable electricity had been able to beat even Eskom's lowest prevailing tariff. City of Johannesburg MMC Michael Sun added that the proposed tariff hike would have a “devastating impact” on the citizens of Johannesburg, erode business confidence and disrupt economic recovery. Sun added that City Power was of the view that Eskom could reduce its proposed revenue by R55-billion, for each of the years covered by the application, reducing the increase to a maximum of 18.4% for the 2024 financial year. However, Mogale City mayor Tyron Gray also called for an inflation-linked increase, indicating that ongoing load-shedding was resulting in water disruptions in the high-lying Gauteng city and that a price hike would exacerbate the problem, owing to the nature of the water/power cross subsidies in place. DISALLOW DIESEL REQUEST Energy Intensive Users Group (EIUG) CEO Fanele Mondi warned that a 32% increase would have a significant negative impact on its mining and heavy-industrial members, given that electricity represented up to 40% of their costs. Mondi made specific recommendations with regard to how Nersa should treat various cost components in Eskom's application, including the utility request for R16.9-billion next year and R17.7-billion in the 2025 financial year to operate its diesel-fuelled power plants. The increase outlined by Eskom is based on deploying the plants at a load factor of 12%, rather than 5%, to offset the fall in the coal and nuclear fleet's energy availability factor to 59% from 62%. “This represents a staggering R11.8-billion and R12.41-billion [additional cost for diesel] for the respective years,” he noted. The EIUG requested Nersa to disallow the request for higher diesel volumes, which made up 60% of the increase, and instead base any increased allowance on real diesel price increases. “Nersa should get a better explanation for the seemingly excessive volume increase. “If it is due to poor generation performance, rather consider investing more money in maintenance and demand-side-management incentives. “Such a reallocation will be a more sustainable investment financially with an opportunity to decrease the costs in the medium term,” Mondi argue...

The affordability of the 32% tariff hike being sought by Eskom for implementation on April 1 next year came under intense scrutiny on the last day of National Energy Regulator of South Africa (Nersa) public hearings. The regulator, which adjudicated the first year of the three-year fifth multiyear price determination (MYPD5) in January, when it approved a 9.61% increase for the 2023 financial year against an Eskom request for 20.5%, expects to decide for the 2024 and 2025 financial years by November 7. The utility has applied for allowable revenue of R351-billion for 2024 and R382-billion for 2025, inclusive of the R15-billion a year arising from a court order stipulating that the utility be allowed to recover, over five financial years, the full R69-billion equity injection Nersa incorrectly deducted from its MYPD4 allowable revenue. If granted, the standard Eskom tariff would rise to 172.6c/kWh on April 1, or by more than 32%. Eskom argues that even after such a steep hike, the tariff would remain below a cost-reflective level, which it calculates to be 185.7c/kWh. TERRIBLE INJUSTICE The utility's request was strongly opposed by all of the presenters on the third and final day of the hearings, including Cape Town Mayor Geordin Hill-Lewis, who urged Nersa to unequivocally reject the request and instead grant no increase above the current inflation rate. Warning that South Africans were being confronted with a cost-of-living crisis, Hill-Lewis argued that it would be a “terrible injustice” to expect electricity consumers to pay for previous mismanagement and corruption at the utility, particularly in the context of intensifying load-shedding. He noted, too, that all of the 70 bidders that responded to the city's recent tender to procure an initial 200 MW of renewable electricity had been able to beat even Eskom's lowest prevailing tariff. City of Johannesburg MMC Michael Sun added that the proposed tariff hike would have a “devastating impact” on the citizens of Johannesburg, erode business confidence and disrupt economic recovery. Sun added that City Power was of the view that Eskom could reduce its proposed revenue by R55-billion, for each of the years covered by the application, reducing the increase to a maximum of 18.4% for the 2024 financial year. However, Mogale City mayor Tyron Gray also called for an inflation-linked increase, indicating that ongoing load-shedding was resulting in water disruptions in the high-lying Gauteng city and that a price hike would exacerbate the problem, owing to the nature of the water/power cross subsidies in place. DISALLOW DIESEL REQUEST Energy Intensive Users Group (EIUG) CEO Fanele Mondi warned that a 32% increase would have a significant negative impact on its mining and heavy-industrial members, given that electricity represented up to 40% of their costs. Mondi made specific recommendations with regard to how Nersa should treat various cost components in Eskom's application, including the utility request for R16.9-billion next year and R17.7-billion in the 2025 financial year to operate its diesel-fuelled power plants. The increase outlined by Eskom is based on deploying the plants at a load factor of 12%, rather than 5%, to offset the fall in the coal and nuclear fleet's energy availability factor to 59% from 62%. “This represents a staggering R11.8-billion and R12.41-billion [additional cost for diesel] for the respective years,” he noted. The EIUG requested Nersa to disallow the request for higher diesel volumes, which made up 60% of the increase, and instead base any increased allowance on real diesel price increases. “Nersa should get a better explanation for the seemingly excessive volume increase. “If it is due to poor generation performance, rather consider investing more money in maintenance and demand-side-management incentives. “Such a reallocation will be a more sustainable investment financially with an opportunity to decrease the costs in the medium term,” Mondi argue...

Eskom is requesting the National Energy Regulator of South Africa (Nersa) to approve diesel costs of R16.9-billion for its upcoming financial year in line with a material upward revision in the assumed load factor of its diesel-fuelled open cycle gas turbines (OCGTs) from 5% to 12%. The increase is designed to accommodate a steep reduction in the expected energy availability factor (EAF) from the State-owned utility's coal-dominant fleet, which has been reduced to 59%. In Eskom's original fifth multiyear price determination (MYPD5) application, submitted in June last year, the assumed EAF was 72%, which was lowered to 62% in January during Nersa's adjudication of Eskom's 2023 tariff request. The regulator is currently hosting public hearings into Eskom's application for a 32% tariff hike for the 2024 financial year, followed by a 9.74% increase for 2025. Nersa granted the utility a 9.6% increase in January for the 2023 financial year, which began on April 1, against an Eskom request for a 20.5% hike. The diesel costs in the application before Nersa represent a significant increase on the R5-billion outlined in January. CFO Calib Cassim told Nersa on Monday that the change was premised on a 60% increase in the volumes of diesel that Eskom was now expecting to consume next year, together with a 40% increase in the price of the fuel, which had risen sharply following Russia's invasion of Ukraine. During the first six months of the current financial year, Eskom has spent more than R7.7-billion on diesel as it resorted to using its OCGT plants intensively to avoid or limit load-shedding. Rotational power cuts have been implemented for more than 100 days so far in 2022 to close gaps left by the poorly performing coal fleet and the prolonged unavailability of Koeberg Unit 2, which has tripped again following a recent extended maintenance. Eskom has a R500-million diesel budget remaining, but has already indicated that it expects to spend a similar amount on diesel during the second half of the financial year to the end of March as it has year-to-date. Overall, Eskom is seeking R101-billion for primary energy next year to cover expected coal costs of R69-billion (slightly down on the R70-billion outlined in January), diesel cost of R16.9-billion, and start-up fuel oil costs of R6.8-billion (more than double the R3.1-billion assumed in January). Nersa regulatory member Muzi Mkhize questioned Cassim on why consumers should be expected to pay for the additional diesel costs when such costs would not have been incurred had Eskom sustained an EAF of 72%. In response, Cassim argued that resorting to the OCGT plants as a “last resort” was prudent to reduce the cost to the economy of power interruptions. Eskom's application also outlines a large increase in the depreciation allowance, which accounts for 10.67% of the 32% being sought. The utility argues that the depreciation adjustment arises from an “incorrect” regulatory asset base (RAB) valuation by Nersa in a 2021 tariff decision, whereby the regulator reduced Eskom's RAB from over R1.2-trillion to about R550-billion. Eskom subsequently took the RAB aspect of the decision on legal review and a ruling could be made prior to the next Nersa tariff determination. In total, Eskom is requesting allowable revenue of R351-billion, which includes R15-billion arising from a settlement reached after the Supreme Court of Appeal ordered that the remaining portion of a R69-billion government equity injection, which was found to have been deducted incorrectly from Eskom's MYPD4 revenue, be recouped. It also includes an amount of R1.7-billion arising from a R3.4-billion Regulatory Clearing Account amount awarded to Eskom, which had not yet been liquidated. The Eskom request is facing strong opposition from business and civil society groups, with the Organisation Undoing Tax Abuse (Outa) calling on Nersa during the first day of hearings to limit any increase to the consumer price index. “If the economy...

Eskom is requesting the National Energy Regulator of South Africa (Nersa) to approve diesel costs of R16.9-billion for its upcoming financial year in line with a material upward revision in the assumed load factor of its diesel-fuelled open cycle gas turbines (OCGTs) from 5% to 12%. The increase is designed to accommodate a steep reduction in the expected energy availability factor (EAF) from the State-owned utility's coal-dominant fleet, which has been reduced to 59%. In Eskom's original fifth multiyear price determination (MYPD5) application, submitted in June last year, the assumed EAF was 72%, which was lowered to 62% in January during Nersa's adjudication of Eskom's 2023 tariff request. The regulator is currently hosting public hearings into Eskom's application for a 32% tariff hike for the 2024 financial year, followed by a 9.74% increase for 2025. Nersa granted the utility a 9.6% increase in January for the 2023 financial year, which began on April 1, against an Eskom request for a 20.5% hike. The diesel costs in the application before Nersa represent a significant increase on the R5-billion outlined in January. CFO Calib Cassim told Nersa on Monday that the change was premised on a 60% increase in the volumes of diesel that Eskom was now expecting to consume next year, together with a 40% increase in the price of the fuel, which had risen sharply following Russia's invasion of Ukraine. During the first six months of the current financial year, Eskom has spent more than R7.7-billion on diesel as it resorted to using its OCGT plants intensively to avoid or limit load-shedding. Rotational power cuts have been implemented for more than 100 days so far in 2022 to close gaps left by the poorly performing coal fleet and the prolonged unavailability of Koeberg Unit 2, which has tripped again following a recent extended maintenance. Eskom has a R500-million diesel budget remaining, but has already indicated that it expects to spend a similar amount on diesel during the second half of the financial year to the end of March as it has year-to-date. Overall, Eskom is seeking R101-billion for primary energy next year to cover expected coal costs of R69-billion (slightly down on the R70-billion outlined in January), diesel cost of R16.9-billion, and start-up fuel oil costs of R6.8-billion (more than double the R3.1-billion assumed in January). Nersa regulatory member Muzi Mkhize questioned Cassim on why consumers should be expected to pay for the additional diesel costs when such costs would not have been incurred had Eskom sustained an EAF of 72%. In response, Cassim argued that resorting to the OCGT plants as a “last resort” was prudent to reduce the cost to the economy of power interruptions. Eskom's application also outlines a large increase in the depreciation allowance, which accounts for 10.67% of the 32% being sought. The utility argues that the depreciation adjustment arises from an “incorrect” regulatory asset base (RAB) valuation by Nersa in a 2021 tariff decision, whereby the regulator reduced Eskom's RAB from over R1.2-trillion to about R550-billion. Eskom subsequently took the RAB aspect of the decision on legal review and a ruling could be made prior to the next Nersa tariff determination. In total, Eskom is requesting allowable revenue of R351-billion, which includes R15-billion arising from a settlement reached after the Supreme Court of Appeal ordered that the remaining portion of a R69-billion government equity injection, which was found to have been deducted incorrectly from Eskom's MYPD4 revenue, be recouped. It also includes an amount of R1.7-billion arising from a R3.4-billion Regulatory Clearing Account amount awarded to Eskom, which had not yet been liquidated. The Eskom request is facing strong opposition from business and civil society groups, with the Organisation Undoing Tax Abuse (Outa) calling on Nersa during the first day of hearings to limit any increase to the consumer price index. “If the economy...

After updating some key cost assumptions, Eskom has confirmed that it will be applying for a 32% tariff hike for implementation on April 1, 2023. The State-owned utility is also applying for a 9.74% increase for its subsequent financial year. The increases are outlined in an addendum to Eskom's fifth multiyear price determination (MYPD5) application, which contains changes to various key assumptions, including those relating to the cost and use of diesel for its open-cycle gas turbines (OCGTs), as well as independent power producer (IPP) costs. The addendum also outlines a large increase in the depreciation allowance, which accounts for 10.67% of the 32.02% being sought. Eskom argues that the depreciation adjustment arises from an “incorrect” regulatory asset base (RAB) valuation by the National Energy Regulator of South Africa (Nersa) in a 2021 tariff decision, whereby the regulator reduced Eskom's RAB from over R1.2-trillion to about R550-billion. Eskom subsequently took the RAB aspect of the decision on legal review and a ruling could be made prior to the next Nersa tariff determination. The 2024 financial year hike outlined in the addendum is slightly below the 38.1% increase contained in a Nersa consultation paper released in July. That paper was published following a court order stipulating that Nersa adjudicate at least Eskom's 2024 financial year application under the existing MYPD methodology and make a final determination by December 24. Written comments had to be submitted by September 8 and public hearings will be held from September 19 to 23, with Nersa indicating that it plans to make a decision on November 7. Following a court order in 2021, the Energy Regulator adjudicated only the first year of the three-year MYPD5 application, which was submitted in June 2021 and covered the three financial years of 2023, 2024 and 2025. A 9.61% hike was approved for 2023 financial year and was implemented on April 1, 2022, raising Eskom's allowable revenue to R264-billion for the year. Eskom had applied for a 20.5% increase. The Nersa consultation paper published in July in relation to the 2024 and 2025 financial years also arose following a court order stipulating that Nersa adjudicate at least the 2024 financial year application under the existing MYPD methodology, as a new methodology was yet to be finalised. The increase outlined by Eskom in its updated MYPD5 submission is still based on the allowable revenue figure of R335-billion included in the original 2021 application. After RCA and court-ordered revenue allowances, however, the figure rises to R351-billion. That larger revenue figure includes R15-billion arising from settlement reached after the Supreme Court of Appeal ordered that the remaining portion of a R69-billion government equity injection, which was found to have been deducted incorrectly from Eskom's MYPD4 revenue, be recouped. In terms of the settlement, the outstanding R59-billion would be recovered during the financial years from 2024 to 2027. The R351-billion revenue figure also includes an amount of R1.7-billion arising from a R3.4-billion RCA amount awarded to Eskom, which it has not yet liquidated. Despite a slight upward adjustment to assumed sales for the year, the standard tariff would need to rise by 32% next year for Eskom to secure the full allowable revenue being sought. As has become the norm, the request will be strongly resisted by stakeholders during public hearings. Besides the large depreciation amount outlined, the other two major contributors to the 32% requests relate to primary-energy costs, which make up 7.85% of the increase being sought and IPP costs, which comprise 9.05% BIG RISE IN DIESEL COSTS OUTLINED The main driver behind the primary energy cost rise is a revision to Eskom's assumption regarding diesel, the price of which has increased materially since Russian's invasion of Ukraine. The utility is also expecting to rely more heavily on its OCGTs over the coming two years...

After updating some key cost assumptions, Eskom has confirmed that it will be applying for a 32% tariff hike for implementation on April 1, 2023. The State-owned utility is also applying for a 9.74% increase for its subsequent financial year. The increases are outlined in an addendum to Eskom's fifth multiyear price determination (MYPD5) application, which contains changes to various key assumptions, including those relating to the cost and use of diesel for its open-cycle gas turbines (OCGTs), as well as independent power producer (IPP) costs. The addendum also outlines a large increase in the depreciation allowance, which accounts for 10.67% of the 32.02% being sought. Eskom argues that the depreciation adjustment arises from an “incorrect” regulatory asset base (RAB) valuation by the National Energy Regulator of South Africa (Nersa) in a 2021 tariff decision, whereby the regulator reduced Eskom's RAB from over R1.2-trillion to about R550-billion. Eskom subsequently took the RAB aspect of the decision on legal review and a ruling could be made prior to the next Nersa tariff determination. The 2024 financial year hike outlined in the addendum is slightly below the 38.1% increase contained in a Nersa consultation paper released in July. That paper was published following a court order stipulating that Nersa adjudicate at least Eskom's 2024 financial year application under the existing MYPD methodology and make a final determination by December 24. Written comments had to be submitted by September 8 and public hearings will be held from September 19 to 23, with Nersa indicating that it plans to make a decision on November 7. Following a court order in 2021, the Energy Regulator adjudicated only the first year of the three-year MYPD5 application, which was submitted in June 2021 and covered the three financial years of 2023, 2024 and 2025. A 9.61% hike was approved for 2023 financial year and was implemented on April 1, 2022, raising Eskom's allowable revenue to R264-billion for the year. Eskom had applied for a 20.5% increase. The Nersa consultation paper published in July in relation to the 2024 and 2025 financial years also arose following a court order stipulating that Nersa adjudicate at least the 2024 financial year application under the existing MYPD methodology, as a new methodology was yet to be finalised. The increase outlined by Eskom in its updated MYPD5 submission is still based on the allowable revenue figure of R335-billion included in the original 2021 application. After RCA and court-ordered revenue allowances, however, the figure rises to R351-billion. That larger revenue figure includes R15-billion arising from settlement reached after the Supreme Court of Appeal ordered that the remaining portion of a R69-billion government equity injection, which was found to have been deducted incorrectly from Eskom's MYPD4 revenue, be recouped. In terms of the settlement, the outstanding R59-billion would be recovered during the financial years from 2024 to 2027. The R351-billion revenue figure also includes an amount of R1.7-billion arising from a R3.4-billion RCA amount awarded to Eskom, which it has not yet liquidated. Despite a slight upward adjustment to assumed sales for the year, the standard tariff would need to rise by 32% next year for Eskom to secure the full allowable revenue being sought. As has become the norm, the request will be strongly resisted by stakeholders during public hearings. Besides the large depreciation amount outlined, the other two major contributors to the 32% requests relate to primary-energy costs, which make up 7.85% of the increase being sought and IPP costs, which comprise 9.05% BIG RISE IN DIESEL COSTS OUTLINED The main driver behind the primary energy cost rise is a revision to Eskom's assumption regarding diesel, the price of which has increased materially since Russian's invasion of Ukraine. The utility is also expecting to rely more heavily on its OCGTs over the coming two years...

The National Energy Regulator of South Africa (Nersa) has confirmed that Eskom has not applied for a Ministerial determination for a 3 000 MW combined cycle gas power plant at Richards Bay in terms of the Integrated Resource Plan of 2019 (IRP2019), but is instead seeking permission to deviate from the IRP2019. On September 12, Nersa circulated an erratum to a consultation paper published for public comment on August 25 in relation to it providing concurrence to a Ministerial determination for the procurement of 3 000 MW of gas-fired electricity. In its original notice and consultation paper, the regulator said that the 3 000 MW was based on an allocation for gas/diesel generation outlined in Table 5 of the IRP2019. The table shows the allocation of 1 000 MW of gas/diesel by 2024 and 2 000 MW by 2027, and the original consultation paper stated that the Minister had determined to procure the total capacity of 3 000 MW of gas before 2028. In the erratum, however, Nersa clarified that the gas determination under consideration for concurrence related to an application submitted by Eskom to Mineral Resources and Energy Minister Gwede Mantashe on January 13 and not Table 5 of the IRP2019. “The correction seeks to explain that the request for the determination had not originated from the IRP2019 as indicated but from an Eskom application to the Minister in terms of Section 10 (2)(g) of the Electricity Regulation Act (ERA),” Nersa told Engineering News in response to an enquiry, adding that it had mistakenly linked the determination to Table 5 of the IRP2019. The regulator noted that Section 10(2)(g) of the ERA required every application for a generation licence to include “evidence of compliance with any Integrated Resource Plan applicable at that point in time or provide reasons for any deviation for the approval of the Minister”. “Eskom had accordingly applied for a deviation from IRP2019 and in accordance with the prescripts of [the] ERA, Eskom is obliged to provide reasons for the need for such a deviation,” Nersa explained. Following the public comment process, the regulator would conduct its own analysis and “make a decision on whether to concur or not with the Ministerial Section 34 determination based on the legal prescripts and facts and evidence presented or collected by it”. Asked by Engineering News whether, given the late correction, Nersa felt the September 16 closing date for comment to be sufficient, the regulator responded: “Yes, since the change only applies to the origin of the capacity while everything else contained in the consultation paper remains the same.” The original consultation paper had an initial closing date for public comment of September 23, which was subsequently revised to 16:30 on September 16. The earlier deadline is also applicable to consultation papers related to two other Ministerial determinations for 14 791 MW of ‘Storage', ‘PV' and ‘Wind', for the years 2024 to 2030 and 1 000 MW in accordance with the heading ‘Other Distributed Generation, Co-Gen, Biomass, Landfill', for the years 2023 and 2024. The deadline for the renewables determination was shifted earlier to accommodate a doubling of Bid Window Six (BW 6) of the Renewable Energy Independent Power Producer Procurement Programme to 5 200 MW, for which a September 22 bid submission date was set. However, the National Energy Crisis Committee announced on September 11 that the BW 6 request for proposals (RFP) would be reduced to 4 200 MW, given that the Nersa still needed to concur with a Ministerial determination opening the way for the procurement of more solar photovoltaic (PV) capacity. “Rather than delay this RFP for all requests to be approved, government opted to issue the current RFP for 4 200 MW as opposed to delaying the entire Bid Window. “A further announcement regarding the remaining 1 000 MW of solar PV will be made following the conclusion of the Nersa process regarding the concurrence of the new determination,” the commit...

The National Energy Regulator of South Africa (Nersa) has confirmed that Eskom has not applied for a Ministerial determination for a 3 000 MW combined cycle gas power plant at Richards Bay in terms of the Integrated Resource Plan of 2019 (IRP2019), but is instead seeking permission to deviate from the IRP2019. On September 12, Nersa circulated an erratum to a consultation paper published for public comment on August 25 in relation to it providing concurrence to a Ministerial determination for the procurement of 3 000 MW of gas-fired electricity. In its original notice and consultation paper, the regulator said that the 3 000 MW was based on an allocation for gas/diesel generation outlined in Table 5 of the IRP2019. The table shows the allocation of 1 000 MW of gas/diesel by 2024 and 2 000 MW by 2027, and the original consultation paper stated that the Minister had determined to procure the total capacity of 3 000 MW of gas before 2028. In the erratum, however, Nersa clarified that the gas determination under consideration for concurrence related to an application submitted by Eskom to Mineral Resources and Energy Minister Gwede Mantashe on January 13 and not Table 5 of the IRP2019. “The correction seeks to explain that the request for the determination had not originated from the IRP2019 as indicated but from an Eskom application to the Minister in terms of Section 10 (2)(g) of the Electricity Regulation Act (ERA),” Nersa told Engineering News in response to an enquiry, adding that it had mistakenly linked the determination to Table 5 of the IRP2019. The regulator noted that Section 10(2)(g) of the ERA required every application for a generation licence to include “evidence of compliance with any Integrated Resource Plan applicable at that point in time or provide reasons for any deviation for the approval of the Minister”. “Eskom had accordingly applied for a deviation from IRP2019 and in accordance with the prescripts of [the] ERA, Eskom is obliged to provide reasons for the need for such a deviation,” Nersa explained. Following the public comment process, the regulator would conduct its own analysis and “make a decision on whether to concur or not with the Ministerial Section 34 determination based on the legal prescripts and facts and evidence presented or collected by it”. Asked by Engineering News whether, given the late correction, Nersa felt the September 16 closing date for comment to be sufficient, the regulator responded: “Yes, since the change only applies to the origin of the capacity while everything else contained in the consultation paper remains the same.” The original consultation paper had an initial closing date for public comment of September 23, which was subsequently revised to 16:30 on September 16. The earlier deadline is also applicable to consultation papers related to two other Ministerial determinations for 14 791 MW of ‘Storage', ‘PV' and ‘Wind', for the years 2024 to 2030 and 1 000 MW in accordance with the heading ‘Other Distributed Generation, Co-Gen, Biomass, Landfill', for the years 2023 and 2024. The deadline for the renewables determination was shifted earlier to accommodate a doubling of Bid Window Six (BW 6) of the Renewable Energy Independent Power Producer Procurement Programme to 5 200 MW, for which a September 22 bid submission date was set. However, the National Energy Crisis Committee announced on September 11 that the BW 6 request for proposals (RFP) would be reduced to 4 200 MW, given that the Nersa still needed to concur with a Ministerial determination opening the way for the procurement of more solar photovoltaic (PV) capacity. “Rather than delay this RFP for all requests to be approved, government opted to issue the current RFP for 4 200 MW as opposed to delaying the entire Bid Window. “A further announcement regarding the remaining 1 000 MW of solar PV will be made following the conclusion of the Nersa process regarding the concurrence of the new determination,” the commit...

As the country grapples with another week of loadshedding, Eskom's worst case scenario modelling for energy availability factors at its aging coal plants is coming to pass, highlighting the urgency with which the country needs to move on the long and winding road to total energy market reform. Late on Friday 26 August, the National Electricity Regulator of South Africa (NERSA) asked for public comment on three section 34 determinations made by the Minister of Mineral Resources and Energy, Gwede Mantashe, which the minister sent to NERSA for concurrence. The first one is for 14 791 MW of solar, wind and storage capacity to be procured. A second one is for 1 000 MW from biomass and landfill projects. The third one is for 3 000 MW of gas. This is a massive announcement. It more than doubles the total MWs in procurement, pushing the total over 33 000 MW of capacity that will be opened for bids, and in due course connected to the grid. Murmurings ahead of the mini budget are also that Treasury will assume a portion of Eskom's debt. All the while Eskom's EAF declines and serious concerns are being raised about whether the Koeberg 20 year life extension target date of 2024 will be achieved. To talk about this Michael Avery is joined by Grove Steyn, MD of Meridian Economics; Miriam Altman, Director at Altman Advisory & Professor, 4IR Practice at the University of Johannesburg & Mark Swilling, Professor at Centre for Sustainability Transitions at Stellenbosch University

The National Energy Regulator of South Africa (Nersa) has published an erratum to a consultation paper published for public comment on August 25 in relation to it providing concurrence to a Ministerial determination for the procurement of 3 000 MW of gas-fired electricity. The original notice and consultation paper said that the 3 000 MW was based on an allocation for gas/diesel generation outlined in Table 5 of the Integrated Resource Plan of 2019 (IRP2019). The table shows the allocation of 1 000 MW of gas/diesel by 2024 and 2 000 MW by 2027, and the original consultation paper stated that the Minister had determined to procure the total capacity of 3 000 MW from gas before 2028. The original consultation paper raised questions as, in 2020, Mineral Resources and Energy Minister Gwede Mantashe Gazetted a Ministerial determination for 3 000 MW of gas to power for the years 2024 to 2027. In the erratum, Nersa clarified that the gas determination under consideration for concurrence actually related to an Eskom application submitted to the Minister on January 13 for a determination relating to a combined cycle gas power plant at Richards Bay, rather than Table 5 of the IRP2019. It does not indicate how Eskom and the Minister have sought to justify the allocation in terms of existing IRP2019 allocations, but the consultation paper states that the ever-declining performance of Eskom's coal fleet meant that “baseload and mid-merit capacity must be added to the grid in order to ensure that the System Operator is able to balance the grid with the aid of dispatchable capacity”. It also highlights that about 24 100 MW of coal generation capacity is planned to be decommissioned in the period beyond 2030 and that gas could minimise dependence on diesel. Nersa also confirmed that the public comment deadline, which was originally set down as September 23, had been revised to 16:30 on September 16.

The National Energy Regulator of South Africa (Nersa) has published an erratum to a consultation paper published for public comment on August 25 in relation to it providing concurrence to a Ministerial determination for the procurement of 3 000 MW of gas-fired electricity. The original notice and consultation paper said that the 3 000 MW was based on an allocation for gas/diesel generation outlined in Table 5 of the Integrated Resource Plan of 2019 (IRP2019). The table shows the allocation of 1 000 MW of gas/diesel by 2024 and 2 000 MW by 2027, and the original consultation paper stated that the Minister had determined to procure the total capacity of 3 000 MW from gas before 2028. The original consultation paper raised questions as, in 2020, Mineral Resources and Energy Minister Gwede Mantashe Gazetted a Ministerial determination for 3 000 MW of gas to power for the years 2024 to 2027. In the erratum, Nersa clarified that the gas determination under consideration for concurrence actually related to an Eskom application submitted to the Minister on January 13 for a determination relating to a combined cycle gas power plant at Richards Bay, rather than Table 5 of the IRP2019. It does not indicate how Eskom and the Minister have sought to justify the allocation in terms of existing IRP2019 allocations, but the consultation paper states that the ever-declining performance of Eskom's coal fleet meant that “baseload and mid-merit capacity must be added to the grid in order to ensure that the System Operator is able to balance the grid with the aid of dispatchable capacity”. It also highlights that about 24 100 MW of coal generation capacity is planned to be decommissioned in the period beyond 2030 and that gas could minimise dependence on diesel. Nersa also confirmed that the public comment deadline, which was originally set down as September 23, had been revised to 16:30 on September 16.

Government has confirmed that the procurement allocation for Bid Window Six (BW 6) of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) has been scaled back to 4 200 MW from the 5 200 MW announced by President Cyril Ramaphosa on July 25. The National Energy Crisis Committee announced on Sunday that the decision to proceed with a 4 200 MW request for proposals (RFP) had been decided so as to ensure that the procurement process was not delayed, given that the National Energy Regulator of South Africa (Nersa) still needed to concur with a Ministerial determination opening the way for the procurement of more solar photovoltaic (PV) capacity. Engineering News reported previously that Nersa had invited public comment on it providing concurrence with the new Ministerial determinations allowing for the procurement of 18 791 MW of new electricity capacity catered for under the 2019 edition of the Integrated Resource Plan (IRP 2019). The regulator initially set a deadline of September 23 for such comment, which would have been a day after the BW6 bid submission deadline of September 22, which had itself been shifted from August 11 following the announced enlargement of the round. Nersa later confirmed an earlier September 16 deadline. The solar PV allocation catered for under an existing determination, published in 2020, has nearly been exhausted and, absent a new determination, the IPP Office had indicated to Engineering News that the size of BW 6 might have to be reduced to 4 200 MW. Initially, 2 600 MW was due to be procured through BW 6, but Ramaphosa announced in July that the round would be doubled as part of a series of interventions announced as part of a so-called Energy Action Plan to tackle intensifying load-shedding. Mineral Resources and Energy Minister Gwede Mantashe subsequently delivered three proposed determinations to Nersa in line with Section 34 of the Electricity Regulation Act, covering the following capacities included in Table 5 of the IRP 2019: 14 791 MW of ‘Storage', ‘PV' and ‘Wind', for the years 2024 to 2030; 3 000 MW in accordance with the heading labelled ‘Gas/Diesel', for the years 2024 to 2027; and 1 000 MW in accordance with the heading ‘Other Distributed Generation, Co-Gen, Biomass, Landfill', for the years 2023 and 2024. However, in a statement the National Energy Crisis Committee said the RFP would be limited to 4 200 MW so as to avoid delaying the bidding process. “To clarify the procurement process currently under way, due to the urgency required to resolve the electricity supply crisis, the government decided to proceed with increasing the wind allocation from 2 600 MW to 3 200 MW at this stage, in line with the Second Determination of 2020. “Rather than delay this RFP for all requests to be approved, government opted to issue the current RFP for 4 200 MW as opposed to delaying the entire Bid Window. “A further announcement regarding the remaining 1 000 MW of solar PV will be made following the conclusion of the Nersa process regarding the concurrence of the new determination. “At the end of this process, we aim to be adding a total of 5 200 MW under BW 6 to the grid,” the statement reads. It adds that the decision to proceed follows the conclusion of all required governance approvals, including Eskom's approval, which is necessary as the State-owned utility remains the single buyer of all electricity procured by government under the REIPPPP. Meanwhile, none of the 25 preferred projects selected under REIPPPP BW 5 have reached financial close, despite the deadline having been shifted twice to accommodate the projects. The BW 5 projects, which were initially meant to close at the end of April, have been hampered by the slow issuance of grid connection Budget Quotes by Eskom's Grid Access Unit, as well as major cost changes precipitated by supply-chain disruptions and the rise in the cost of components since Russia's invasion of Ukraine. The IPP Office told Engineerin...

Government has confirmed that the procurement allocation for Bid Window Six (BW 6) of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) has been scaled back to 4 200 MW from the 5 200 MW announced by President Cyril Ramaphosa on July 25. The National Energy Crisis Committee announced on Sunday that the decision to proceed with a 4 200 MW request for proposals (RFP) had been decided so as to ensure that the procurement process was not delayed, given that the National Energy Regulator of South Africa (Nersa) still needed to concur with a Ministerial determination opening the way for the procurement of more solar photovoltaic (PV) capacity. Engineering News reported previously that Nersa had invited public comment on it providing concurrence with the new Ministerial determinations allowing for the procurement of 18 791 MW of new electricity capacity catered for under the 2019 edition of the Integrated Resource Plan (IRP 2019). The regulator initially set a deadline of September 23 for such comment, which would have been a day after the BW6 bid submission deadline of September 22, which had itself been shifted from August 11 following the announced enlargement of the round. Nersa later confirmed an earlier September 16 deadline. The solar PV allocation catered for under an existing determination, published in 2020, has nearly been exhausted and, absent a new determination, the IPP Office had indicated to Engineering News that the size of BW 6 might have to be reduced to 4 200 MW. Initially, 2 600 MW was due to be procured through BW 6, but Ramaphosa announced in July that the round would be doubled as part of a series of interventions announced as part of a so-called Energy Action Plan to tackle intensifying load-shedding. Mineral Resources and Energy Minister Gwede Mantashe subsequently delivered three proposed determinations to Nersa in line with Section 34 of the Electricity Regulation Act, covering the following capacities included in Table 5 of the IRP 2019: 14 791 MW of ‘Storage', ‘PV' and ‘Wind', for the years 2024 to 2030; 3 000 MW in accordance with the heading labelled ‘Gas/Diesel', for the years 2024 to 2027; and 1 000 MW in accordance with the heading ‘Other Distributed Generation, Co-Gen, Biomass, Landfill', for the years 2023 and 2024. However, in a statement the National Energy Crisis Committee said the RFP would be limited to 4 200 MW so as to avoid delaying the bidding process. “To clarify the procurement process currently under way, due to the urgency required to resolve the electricity supply crisis, the government decided to proceed with increasing the wind allocation from 2 600 MW to 3 200 MW at this stage, in line with the Second Determination of 2020. “Rather than delay this RFP for all requests to be approved, government opted to issue the current RFP for 4 200 MW as opposed to delaying the entire Bid Window. “A further announcement regarding the remaining 1 000 MW of solar PV will be made following the conclusion of the Nersa process regarding the concurrence of the new determination. “At the end of this process, we aim to be adding a total of 5 200 MW under BW 6 to the grid,” the statement reads. It adds that the decision to proceed follows the conclusion of all required governance approvals, including Eskom's approval, which is necessary as the State-owned utility remains the single buyer of all electricity procured by government under the REIPPPP. Meanwhile, none of the 25 preferred projects selected under REIPPPP BW 5 have reached financial close, despite the deadline having been shifted twice to accommodate the projects. The BW 5 projects, which were initially meant to close at the end of April, have been hampered by the slow issuance of grid connection Budget Quotes by Eskom's Grid Access Unit, as well as major cost changes precipitated by supply-chain disruptions and the rise in the cost of components since Russia's invasion of Ukraine. The IPP Office told Engineerin...

Mineral Resources and Energy Minister Gwede Mantashe has published for public comment proposed changes to South Africa's electricity regulations, exempting distributed generation facilities of any size from applying to the National Energy Regulator of South Africa (Nersa) for a licence. The majority of the exempted facilities will still need to be registered with Nersa and will have to comply with either transmission or distribution codes. Hitherto, facilities below 100 MW have been exempt from licensing in line with a reform announced jointly by President Cyril Ramaphosa and Mantashe in June 2021, lifting the licence-exemption threshold from 1 MW to 100 MW. However, on July 25 Ramaphosa announced that the 100 MW cap would be lifted as part of a series of initiatives aimed at tackling load-shedding, which has been implemented by Eskom on 91 days this year already. The proposed changes to the exemption rules are contained in a draft Licensing Exemption and Regulation Notice, under section 36(4) of the Electricity Regulation Act, and published in the Government Gazette of September 2. “The Licensing Exemption and Regulation Notice seeks to give effect to the various measures to address South Africa's electricity challenges as announced by President Cyril Ramaphosa in July 2022,” the Department of Mineral Resources and Energy said in a statement. “It outlines a set of electricity generation activities that are exempt from licensing, and those that in addition to being exempt from licensing must also comply with the Code (distribution code, transmission code, or any code approved by the Regulator) and must be registered with the regulator.” Interested persons and organisations have been given 30 days to submit written comments on the proposed changes. Since the initial lifting of the threshold to 100 MW, several companies have announced investments, or investment intentions, in distributed generation facilities, including facilities that will wheel electricity to third parties using either Eskom or municipal grid infrastructure. Ramaphosa told business leaders this week that the necessary amendments were being made to remove the licensing threshold for embedded generation. He also announced that over 500 MW of private renewable power generation projects had been registered with Nersa to date, and that the pipeline of such projects, which were at various stages of development, stood at over 6 000 MW.

Mineral Resources and Energy Minister Gwede Mantashe has published for public comment proposed changes to South Africa's electricity regulations, exempting distributed generation facilities of any size from applying to the National Energy Regulator of South Africa (Nersa) for a licence. The majority of the exempted facilities will still need to be registered with Nersa and will have to comply with either transmission or distribution codes. Hitherto, facilities below 100 MW have been exempt from licensing in line with a reform announced jointly by President Cyril Ramaphosa and Mantashe in June 2021, lifting the licence-exemption threshold from 1 MW to 100 MW. However, on July 25 Ramaphosa announced that the 100 MW cap would be lifted as part of a series of initiatives aimed at tackling load-shedding, which has been implemented by Eskom on 91 days this year already. The proposed changes to the exemption rules are contained in a draft Licensing Exemption and Regulation Notice, under section 36(4) of the Electricity Regulation Act, and published in the Government Gazette of September 2. “The Licensing Exemption and Regulation Notice seeks to give effect to the various measures to address South Africa's electricity challenges as announced by President Cyril Ramaphosa in July 2022,” the Department of Mineral Resources and Energy said in a statement. “It outlines a set of electricity generation activities that are exempt from licensing, and those that in addition to being exempt from licensing must also comply with the Code (distribution code, transmission code, or any code approved by the Regulator) and must be registered with the regulator.” Interested persons and organisations have been given 30 days to submit written comments on the proposed changes. Since the initial lifting of the threshold to 100 MW, several companies have announced investments, or investment intentions, in distributed generation facilities, including facilities that will wheel electricity to third parties using either Eskom or municipal grid infrastructure. Ramaphosa told business leaders this week that the necessary amendments were being made to remove the licensing threshold for embedded generation. He also announced that over 500 MW of private renewable power generation projects had been registered with Nersa to date, and that the pipeline of such projects, which were at various stages of development, stood at over 6 000 MW.

The National Energy Regulator of South Africa (Nersa) has issued an updated invitation, with an earlier September 16 deadline, for written comments regarding its concurrence with new Ministerial determinations allowing for the procurement of 18 791 MW of new electricity capacity. Nersa's original invitation set a closing date of September 23 for the receipt of public comments, which would have been a day after the bid submission deadline for the sixth bid window (BW6) of the Renewable Energy Independent Power Producer Procurement Programme. Had that been the case, it would not have been possible for a new determination for solar photovoltaic (PV) to be published to allow BW6 to be doubled from 2 600 MW to 5 200 MW, as announced by President Cyril Ramaphosa on July 25, when the enlarged bid window was unveiled as part of a package of measures aimed at tackling intensifying load-shedding. The solar PV allocation catered for under an existing determination, published in 2020, has nearly been exhausted and, absent a new determination, the IPP Office had indicated that the size of BW6 would have to be reduced to 4 200 MW. Nersa released the updated invitation and comment deadline on Friday, August 26, shortly after Engineering News published an article highlighting the fact that the September 23 deadline was out of sync with government's ambition to double next renewables round. Three proposed determinations have been delivered to Nersa by Mineral Resources and Energy Minister Gwede Mantashe in line with Section 34 of the Electricity Regulation Act and cover the following capacities included in Table 5 of the 2019 edition of the Integrated Resource Plan (IPR 2019): 14 791 MW of ‘Storage', ‘PV' and ‘Wind', for the years 2024 to 2030; 3 000 MW in accordance with the heading labelled ‘Gas/Diesel', for the years 2024 to 2027; and 1 000 MW in accordance with the heading ‘Other Distributed Generation, Co-Gen, Biomass, Landfill', for the years 2023 and 2024. Without the regulator's concurrence, the determinations cannot be Gazetted and the new generation capacity outlined in the IRP 2019 cannot be legally procured. Prior to Nersa's formal request for comment on the determination, IPP Office head Bernard Magoro indicated that the office was gearing up for the enlarged bid window and he expressed confidence that it and its transaction advisers had sufficient capacity to complete bid evaluations within two months of the bid submission date. He also confirmed that September 15 had been set as the last date for compulsory bid registration, including payment of the bid registration fee.

The National Energy Regulator of South Africa (Nersa) has invited public comment on it providing concurrence with new Ministerial determinations allowing for the procurement of 18 791 MW of new electricity capacity catered for under the 2019 edition of the Integrated Resource Plan (IRP 2019), which covers the period to 2030. However, the deadline set for the submission of comments is a day after the current bid submission deadline for the sixth bid window (BW6) of the Renewable Energy Independent Power Producer Procurement Programme, which requires a new determination for solar photovoltaic (PV) to enlarge the round to 5 200 MW. The solar PV allocation catered for under an existing determination, published in 2020, has nearly been exhausted and, absent a new determination, the IPP Office has indicated that the size of BW6 may have to be reduced to 4 200 MW. The doubling of BW 6 from an initial 2 600 MW was one of the interventions announced by President Cyril Ramaphosa on July 25 to tackle intensifying load-shedding. Three proposed determinations have been delivered to Nersa by Mineral Resources and Energy Minister Gwede Mantashe in line with Section 34 of the Electricity Regulation Act and cover the following capacities included in Table 5 of the IRP 2019: 14 791 MW of ‘Storage', ‘PV' and ‘Wind', for the years 2024 to 2030; 3 000 MW in accordance with the heading labelled ‘Gas/Diesel', for the years 2024 to 2027; and 1 000 MW in accordance with the heading ‘Other Distributed Generation, Co-Gen, Biomass, Landfill', for the years 2023 and 2024. Without the regulator's concurrence, the determinations cannot be Gazetted and the new generation capacity outlined in the IRP 2019 cannot be legally procured. Under the current timetable, the regulator's concurrence will not be made in time for the September 22 bid submission deadline set for BW6 – the deadline was shifted from an initial closing date of August 11 to cater for the doubling of the round. Nersa has set a closing date of September 23 for the receipt of written comments on the determinations. Engineering News contacted the IPP Office for its response to the development and the office indicated that it was still awaiting governance approvals and that it would revert as soon as these had been received. Prior to Nersa's formal request for comment on the determination, IPP Office head Bernard Magoro indicated that the office was gearing up for the enlarged bid window and he expressed confidence that it and its transaction advisers had sufficient capacity to complete bid evaluations within two months of the bid submission date. He also confirmed that September 15 had been set as the last date for compulsory bid registration, including payment of the bid registration fee. However, Magoro also pre-empted a possible delay to the finalisation of the final Ministerial determination saying: “If it's approved on time, it will allow us to add the additional 1 000 MW of PV. If not, the IPP Office will have to decide whether to delay the bid submission date again or proceed with 4 200 MW instead of 5 200 MW.”

The National Energy Regulator of South Africa (Nersa) has invited public comment on it providing concurrence with new Ministerial determinations allowing for the procurement of 18 791 MW of new electricity capacity catered for under the 2019 edition of the Integrated Resource Plan (IRP 2019), which covers the period to 2030. However, the deadline set for the submission of comments is a day after the current bid submission deadline for the sixth bid window (BW6) of the Renewable Energy Independent Power Producer Procurement Programme, which requires a new determination for solar photovoltaic (PV) to enlarge the round to 5 200 MW. The solar PV allocation catered for under an existing determination, published in 2020, has nearly been exhausted and, absent a new determination, the IPP Office has indicated that the size of BW6 may have to be reduced to 4 200 MW. The doubling of BW 6 from an initial 2 600 MW was one of the interventions announced by President Cyril Ramaphosa on July 25 to tackle intensifying load-shedding. Three proposed determinations have been delivered to Nersa by Mineral Resources and Energy Minister Gwede Mantashe in line with Section 34 of the Electricity Regulation Act and cover the following capacities included in Table 5 of the IRP 2019: 14 791 MW of ‘Storage', ‘PV' and ‘Wind', for the years 2024 to 2030; 3 000 MW in accordance with the heading labelled ‘Gas/Diesel', for the years 2024 to 2027; and 1 000 MW in accordance with the heading ‘Other Distributed Generation, Co-Gen, Biomass, Landfill', for the years 2023 and 2024. Without the regulator's concurrence, the determinations cannot be Gazetted and the new generation capacity outlined in the IRP 2019 cannot be legally procured. Under the current timetable, the regulator's concurrence will not be made in time for the September 22 bid submission deadline set for BW6 – the deadline was shifted from an initial closing date of August 11 to cater for the doubling of the round. Nersa has set a closing date of September 23 for the receipt of written comments on the determinations. Engineering News contacted the IPP Office for its response to the development and the office indicated that it was still awaiting governance approvals and that it would revert as soon as these had been received. Prior to Nersa's formal request for comment on the determination, IPP Office head Bernard Magoro indicated that the office was gearing up for the enlarged bid window and he expressed confidence that it and its transaction advisers had sufficient capacity to complete bid evaluations within two months of the bid submission date. He also confirmed that September 15 had been set as the last date for compulsory bid registration, including payment of the bid registration fee. However, Magoro also pre-empted a possible delay to the finalisation of the final Ministerial determination saying: “If it's approved on time, it will allow us to add the additional 1 000 MW of PV. If not, the IPP Office will have to decide whether to delay the bid submission date again or proceed with 4 200 MW instead of 5 200 MW.”

The National Energy Regulator of South Africa (Nersa) has issued an updated invitation, with an earlier September 16 deadline, for written comments regarding its concurrence with new Ministerial determinations allowing for the procurement of 18 791 MW of new electricity capacity. Nersa's original invitation set a closing date of September 23 for the receipt of public comments, which would have been a day after the bid submission deadline for the sixth bid window (BW6) of the Renewable Energy Independent Power Producer Procurement Programme. Had that been the case, it would not have been possible for a new determination for solar photovoltaic (PV) to be published to allow BW6 to be doubled from 2 600 MW to 5 200 MW, as announced by President Cyril Ramaphosa on July 25, when the enlarged bid window was unveiled as part of a package of measures aimed at tackling intensifying load-shedding. The solar PV allocation catered for under an existing determination, published in 2020, has nearly been exhausted and, absent a new determination, the IPP Office had indicated that the size of BW6 would have to be reduced to 4 200 MW. Nersa released the updated invitation and comment deadline on Friday, August 26, shortly after Engineering News published an article highlighting the fact that the September 23 deadline was out of sync with government's ambition to double next renewables round. Three proposed determinations have been delivered to Nersa by Mineral Resources and Energy Minister Gwede Mantashe in line with Section 34 of the Electricity Regulation Act and cover the following capacities included in Table 5 of the 2019 edition of the Integrated Resource Plan (IPR 2019): 14 791 MW of ‘Storage', ‘PV' and ‘Wind', for the years 2024 to 2030; 3 000 MW in accordance with the heading labelled ‘Gas/Diesel', for the years 2024 to 2027; and 1 000 MW in accordance with the heading ‘Other Distributed Generation, Co-Gen, Biomass, Landfill', for the years 2023 and 2024. Without the regulator's concurrence, the determinations cannot be Gazetted and the new generation capacity outlined in the IRP 2019 cannot be legally procured. Prior to Nersa's formal request for comment on the determination, IPP Office head Bernard Magoro indicated that the office was gearing up for the enlarged bid window and he expressed confidence that it and its transaction advisers had sufficient capacity to complete bid evaluations within two months of the bid submission date. He also confirmed that September 15 had been set as the last date for compulsory bid registration, including payment of the bid registration fee.

The National Energy Regulator of South Africa (Nersa) has published a list of the most recent 35 renewables projects – including a 100 MW solar photovoltaic (PV) project in the Northern Cape – to be registered following a recent market reform allowing for large-scale distributed generation projects to proceed without a licence. The projects were officially registered during the August 22 meeting of the Nersa regulator executive committee, which also registered the first two 100 MW solar PV projects in May and subsequently registered 16 distributed-generation projects in June, with a combined capacity of 211 MW. Nersa expects to consider the next batch of registrations during a meeting scheduled for September 5. The August registrations increased to eight the number of projects that have now been registered with a capacity greater then 10 MW and Nersa says the total installed capacity of such projects currently stands at 599.6 MW. As with previous registrations, most projects are small, but the list includes some notable large projects, including: the 100 MW Postmasburg Solar PV Energy Facility 2, in the Northern Cape; the 75 MW Buffels Solar project, in the North West; and the 19.9 MW Mzimkhulu Hydroelectric project, in KwaZulu-Natal. The other registrations confirmed by Nersa on August 22, were: two 0.330 MW apiece Bamco Koelkamers solar PV projects, in the Western Cape; the 0.440 MW Capital Propfund 2 solar PV, in Gauteng; the 0.150 MW Capital Propfund 3 solar PV project, in Gauteng; the 0.150 MW EC Maskell Boerdery solar PV, in the Eastern Cape; the 0.150 MW Eversolar solar PV project, in Mpumalanga; the 0.315 MW Jowilita Farms solar PV project, in the Northern Cape; the 0.325 MW Just Refrigeration solar PV project, in Mpumalanga; the 0.550 MW Martin and Martin solar PV project, in the Western Cape; the 0.110 MW and 0.220 MW apiece solar PV projects registered by Number Two Piggeries, in the Eastern Cape; four solar PV projects in the Northern Cape of 0.331 MW, 0.662 MW, 0.822 MW and 0.910 MW apiece registered by Paul de Villiers; the 0.112 MW Pietlam solar PV project in the Eastern Cape; solar PV projects of 0.450 MW and a 0.220 MW apiece registered by Redefine Properties in KwaZulu-Natal and Gauteng respectively; a 0.200 MW solar PV project registered by RZT Zelpy 4600, in KwaZulu-Natal; the 0.496 MW SolarAfrica Energy sola PV project, in the North West; the 0.133 MW Suncrest Estate solar PV project, in the Western Cape; the 0.150 MW Swartrandsdam solar PV project, in the Free State; the 0.594 MW and 0.273 MW solar PV projects registered by Terradew Three, in the Eastern Cape and KwaZulu-Natal respectively; the 0.300 MW Unlocked 18 solar PV project, in Gauteng; the 0.220 Widney Transport Components solar PV project, in Gauteng; the 0.233 MW Winterton Shopping Complex solar PV project, in KwaZulu-Natal; the 1.100 MW Zandspruit Value Centre Solar PV project, in Gauteng; the 2.600 MW hydro project registered by MBB Consulting Services, in Mpumalanga; and three 0.152 MW apiece solar PV projects, two in KwaZulu-Natal and one in Gauteng, registered by Thebe Solar Energy. The number of project registrations is expected to continue to climb following President Cyril Ramaphosa's July 25 announcement of the lifting of the licence-exemption cap on distributed generation projects as part of a series of interventions to tackle intensifying load-shedding. Prior to the announcement a 100 MW cap had been in place, following a June 2021 reform that raised the threshold from 1 MW to 100 MW.

Sasol Gas has confirmed that it has delayed the implementation of a controversial 96% increase in the price of pipeline gas, which was initially announced as being effective from August 1. Had the increase been introduced, the price of gas charged to South African customers would have increased from R68.39/GJ to R133.34/GJ. In a letter to customers, Sasol Gas said that it was continuing to engage with the National Energy Regulator of South Africa (Nersa) on the gas price to be implemented for the period to June 30, 2023, “in the hope that the matter can be finalised amicably and swiftly, in the interest of price certainty for gas suppliers, traders and consumers”. “Pending these ongoing engagements with Nersa, Sasol Gas has decided not to implement the new actual gas price of R133.34/GJ effective 1 August as previously communicated to you,” the letter reads, adding that it will continue to charge R68.39/GJ. Following news of the hike, Nersa insisted that it had not approved any increase in the maximum price of pipeline gas and stated that it “would not approve any increase which doubles its previously approved maximum gas price”. This statement followed an outcry from the Industrial Gas Users Association of Southern Africa (IGUA-SA), which warned that the hike would cost the South African economy R325-million a month and could trigger both manufacturing cutbacks and retail price hikes. IGUA-SA has been at loggerheads with Nersa over the gas-price methodology for years and in December last year lodged an application in the Gauteng division of the High Court challenging Nersa's 2021 approval of Sasol Gas' maximum gas prices. It has also made repeated calls for Nersa to adopt a methodology that uses Sasol's cost base as the main reference point for setting the price. Prior to its decision to delay the increase, Sasol Gas said the price had been determined using the approved calculation methodology and had been communicated with Nersa. It also noted that the revised price was well below the maximum gas price as determined by the Nersa Maximum Gas Price decision. “Applying this approved adjustment method yields a maximum gas price of R273.43/GJ,” Sasol Gas said.

The National Energy Regulator of South Africa (Nersa) says it has not approved an increase in the maximum price of pipeline gas to R133/GJ and insists that it “would not approve any increase which doubles its previously approved maximum gas price” of R68.39/GJ. It also insists that only Sasol Gas, which has confirmed that the 96% hike became effective from August 1, could respond to questions regarding the basis for the increase. Sasol Gas has indicated that it informed both Nersa and its customers that the price of piped gas sold in South Africa would increase to R133.34/GJ from the start of August. The company says it submitted the revised price to Nersa on May 29 together with a request that the regulator confirm that the price was in compliance with the 2021 Nersa Maximum Gas Price decision. “In its efforts to confirm its compliance, Sasol Gas also engaged with Nersa on several occasions after this submission,” the company tells Engineering News. Sasol says it has noted a media statement released by Nersa on August 4, in which the regulator states that it has not approved the “excessive increases in gas prices that have been announced by one of its licensees”. However, the JSE-listed group insists that the price increase is compliant with Nersa's 2021 decision and has been determined using the approved calculation methodology prescribed in that decision. “Applying this approved adjustment method yields a maximum gas price of R273.43/GJ,” Sasol reports, adding that it did not pursue such an increase, owing to the negative implications for its customers. However, Nersa says the maximum price arising from its application of the methodology is “well below R100/GJ”, against which Sasol Gas is then expected to provide a discount in line with objectives stipulated in Section 22 of the Gas Act, of 2001. Nersa also insists that any increase above the R68.39/GJ approved is “tantamount to setting a new gas price” that is excessive, as only the Energy Regulator is permitted to approve maximum gas prices. The 2021 decision, Nersa asserts, was influenced by competitive market conditions that prevailed at the time, which it acknowledged pre-dated the subsequent international price shocks. It adds that the decision was subjected to a rationality test, wherein costs were considered. “Nersa has no information of gas costs that increased by 96% which justify a corresponding increase in the price.” However, while the Industrial Gas Users Association of Southern Africa (IGUA-SA) has been calling for a cost-based methodology, the current methodology is based on a benchmark of international gas prices associated with the US Henry Hub, the Dutch Title Transfer Facility and the UK National Balancing Point. Nevertheless, the regulator tells Engineering News that it is considering various options including: a new maximum price subjected to a rationality test prescribed in its methodology; an adjustment factor that is cost reflective; a legal route which seeks to set aside part of its decision and remit it to Nersa; an investigation and adjudication over excessive or unreasonable gas price increases. No timeframe was provide for the selection and implementation of the options under consideration. In the meantime, the IGUA-SA has described the hike as “untenable” and has warned of possible manufacturing cutbacks, as well as potential increases in those essential foodstuffs produced using gas. IGUA-SA calculates the hike will cost the South African economy R325-million a month and, thus, poses a risk to an already struggling and weakened South African economy. “On the one hand, businesses are facing closure across the manufacturing sector, whilst on the other hand it would appear that the gas industry is heading for a regulatory void from a Nersa gas-pricing perspective,” CEO Jaco Human says. He has called for an unambiguous response from Nersa, including the adoption of a methodology that uses Sasol's cost base as the main reference point for setti...

The National Energy Regulator of South Africa (Nersa) has formally initiated the process of adjudicating Eskom's next tariff increase with the publication of a consultation paper on the utility's allowable revenue application for 2023/24 and 2024/25. The paper includes a pro forma tariff calculation indicating that Eskom's tariff could increase by as much as 38.1% on April 1 next year, followed by a further 5.12% increase in 2024/25. The regulator typically does not grant Eskom the full allowable revenue for which it applies, but in recent years the utility has made several successful court applications against the regulator in which it has shown that Nersa has not properly applied its methodologies. The calculation in the consultation paper includes an application made by Eskom for R317.7-billion in allowable revenue to be recovered from standard-tariff customers. The figure arises from an application made by Eskom in June last year as part of the utility's three-year fifth multiyear price determination, or MYPD5, submission. The first year of that MYPD5 application was eventually adjudicated only after the intervention of the courts and, in February, the Energy Regulator announced that Eskom's tariff could rise by 9.61% on April 1. The increase was less than half the 20.5% hike for which Eskom had applied. In addition, Nersa's 2023/24 calculation includes two regulatory clearing account (RCA) amounts with a combined value of R14-billion (of which R3.5-billion has been approved to date) and a R15-billion amount, arising from a legal settlement associated with Nersa's illegal decision to remove a R69-billion equity injection from Eskom's allowable revenue in 2019. The settlement stipulates that the regulator must add an amount of R15-billion to Eskom's allowable revenue for the financial years 2023/24 through to 2025/26, as well as a further R14-billion in 2026/27 so as to remedy the exclusion of the injection. The publication of the consultation paper has been made following a more recent court order, issued in July, stipulating that Nersa should adjudicate the 2023/24 application under the existing MYPD methodology and make a final determination by December 24. Nersa indicates that it intends announcing its decision on November 7, having given stakeholders until September 8 to make written comments, after which public hearings will be held from September 19 to September 23. In parallel, Nersa is consulting on a new methodology for setting electricity tariffs to replace the MYPD methodology, which it intends finalising by September 30. In response, Eskom has highlighted that the sweeping changes being proposed depart from cost-to-serve methodologies used internationally and, thus, recommends that an iterative approach should be adopted to any change. It has also called for an impact assessment to be undertaken before any new methodology is implemented. Such an assessment, Eskom argues, should include an evaluation as to whether the proposed methodology can indeed be implemented, as well as its impact on various customer groupings and the sustainability of licensees, including Eskom and municipalities.

President Cyril Ramaphosa's announcement that a feed-in tariff is to be created to incentivise businesses and households to invest in rooftop solar is likely to further stimulate the so-called ‘silent revolution' that is already under way as South Africans seek to navigate their way through an intensifying load-shedding crisis. The President confirmed that the feed-in tariff would incentivise homes and businesses to sell surplus power to Eskom. This represents a material shift in position given that the State-owned utility has hitherto not allowed for residential solar, resulting in more than 27 000 unregistered solar installations across its distribution network alone. The handful of municipalities that do currently allow such micro installations to feed electricity into their grids have done so only when households and businesses remain “net consumers”, which means they are selling less than they buy. That said, on the very day of Ramaphosa's announcement, the City of Cape Town confirmed that it would, in future, permit commercial and industrial small-scale embedded generators (SSEGs) to sell more electricity to the city than they use. Mayor Geordin Hill-Lewis also announced that the city would pay cash for such electricity, rather than merely extending municipal-bill credits and also unveiled a registration process for those commercial and industrial SSEGs keen to take up the offer. TARIFF STRUCTURE IN FOCUS As the legal space for small-scale distributed generators opens, however, the tariff and the tariff structure are poised to become increasingly important. There is particular concern that poor consumers should not be burdened, and that Eskom and the municipalities are able to extricate themselves from their utility death spirals through a migration to a cost-reflective tariff that fully reflects and recovers the cost of the grid and ancillary services. In preparation for the prospect of having an ever-increasing number of prosumers on its network, Eskom has approached the National Energy Regulator of South Africa (Nersa) with a tariff restructuring proposition that seeks to separate fixed and variable costs. The utility's proposal to implement a fixed monthly charge of more than R900 for grid access, whether or not a household has a solar system, has sparked particular debate and concern, even ahead of any approval by the regulator. Solar Photovoltaic Industry Association board member Frank Spencer, also of Bushveld Energy, says the move to a more cost-reflective tariff that distinguishes between fixed and energy charges is appropriate, particularly given the prospect of a possible feed-in tariff. However, he argues that Nersa should still ensure that these are indeed cost-reflective and fair across the board. “At the moment, there are huge discrepancies between various municipal tariffs, and Nersa should do more to bring these tariffs into being more fairly aligned with each other while also allowing for fair access to the grid for SSEGs,” Spencer tells Engineering News. Centre for Renewable and Sustainable Energy Studies director at Stellenbosch University Professor Sampson Mamphweli believes the regulator should consider developing a methodology and process similar to the one used to determine Eskom's wholesale tariffs so that retail tariffs can be standardised. He is more cautious, though, about whether SSEGs should be allowed to immediately sell more electricity into the grid than they buy, given the importance of such revenue to both Eskom and most municipalities. Nevertheless, Mamphweli is also strongly in favour of splitting the energy and fixed charges so that consumers without solar do not subsidise those with such systems and Eskom's network costs are fairly recovered. Mamphweli and Spencer both support Eskom's proposal for a time-of-use structure, explaining that it will ensure that energy is priced according to what it actually costs to produce at different hours of the day. “By having the right tariffs,...

Public Enterprises Minister Pravin Gordhan has accepted an offer from trade union Solidarity to assist in supplying Eskom with people who have the necessary technical skills to help the government address the power crisis. Gordhan informed the union that Eskom required power station engineers - including mechanical, nuclear, and electrical, among others. MEANWHILE, Solidarity has described Eskom's latest application submitted to the National Energy Regulator of South Africa (NERSA) as absurd, irrational, and unlawful, stating that if accepted, Solidarity would oppose the proposal with all the legal recourse at its disposal. Eskom has requested among other things that a tariff of over R900 per month be levied on consumers who are generating power themselves. For more on this, Elvis Presslin spoke to Solidarity Research Institute Head Connie Mulder

Going forward, combined renewables plans already in place are poised to slash Scope 2 emissions at Exxaro Resources's Grootegeluk coal mine in Limpopo by up to 90%. The renewable strategy being executed by coal miner Exxaro's wholly owned green energy arm – Cennergi – is the key driver of the JSE-listed company's carbon neutrality ambitions. Cennergi has 200 MW of solar and wind projects at advanced stages of development, much of the megawattage in Mpumalanga, to help catalyse South Africa's crucial just energy transition. (Also watch attached Creamer Media video.) Speaking to Mining Weekly in a Zoom interview, Exxaro/Cennergi MD Energy Roland Tatnall said of the energy transition: “It's a really critical pillar of what we're doing at Cennergi and it's integral to how Exxaro is approaching the future as well.” At the same time, Cennergi is talking to a number of third-party customers, large industrials and mining companies, to provide bespoke solutions for them. “There's a massive demand for the types of solutions that we're offering in the market,” said Tatnall, who described South Africa's move into the renewable energy space as “a groundswell of change that's only going in one direction”. Cennergi, which has been designing bespoke non-Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) solutions for several years, combines technologies to match large and small offtakers' needs. Earlier this month, the National Energy Regulator of South Africa (Nersa) gave Cennergi the go-ahead to self-generate 80 MW of solar power at Exxaro's Grootegeluk coal mine, in Limpopo. Music to the ears was that Nersa granted this registration in a record 47 days. On local green electron (renewables) and green molecule (green hydrogen) development, Tatnall said: “We really think that this whole green electrons, green molecule revolution could catalyse a significant directional change in South African industry, and be the just transition to enable South Africans to have a new industrial pillar.” Mining Weekly: What does the approval of Cennergi's 80 MW Lephalale solar project mean for Exxaro Resources? Tatnall: It's a major milestone. I think the most important aspect is the 47 days. This is a licensing process that historically would have taken anything up to a year and after the schedule two changes at a governmental level last year, Nersa has managed to bring forward registration processes to under two months, which I think is quite incredible. The 47 days is something that we didn't expect, and in the context of the mine that we'll be supplying, Grootegeluk, it means that we can advance the reduction in carbon emissions and reduction in costs of that mine. What role do these kinds of projects have in accelerating Exxaro's target of carbon neutrality by 2050? The renewable strategy within Exxaro that's being executed by Cennergi is very much the key driver at this point for carbon neutrality. A project like the Lephalale solar project, just one project, can reduce Scope 1 and Scope 2 emissions within a two-year period by about a third, so it's quite a significant driver for our drive towards carbon neutrality. When we add additional phases, for example, we're looking at wind projects for Grootegeluk as well, we're looking at potentially 60% plus of Scope 2 carbon reductions. Then latterly, we'll be adding energy storage as well, and we could be getting up to 80% and 90% of Scope 2 emission reductions through our renewable strategy. What plans has Exxaro put in place to begin the just transition journey and what have been the major challenges? That's not just a topical question, I think it's one of the most pressing questions for the country. When we restarted the Cennergi strategy to help decarbonise our portfolio, but also look at the broader South African environment, we realised that we couldn't just drive renewables with a purely commercial imperative. We are really at an inflection point in terms of the way that ele...

The National Energy Regulator of South Africa (Nersa) has approved the registration of a further 16 distributed generation projects with a combined capacity of 211 MW and a collective investment value of R3.65-billion. The approvals were made during a regulator executive committee meeting on June 6, at which full-time regulator member for electricity regulation Nhlanhla Gumede stated that the 100 MW reform “is now truly in play”. The reform was announced jointly by President Cyril Ramaphosa and Mineral Resources and Energy Minister Gwede Mantashe in June 2021 and theoretically opened the way for projects below 100 MW to proceed without a licence, even when such facilities wheel electricity through the grid and sell to nonrelated customers. Prior to the reform the project threshold had been 1 MW. However, the reform has faced some implementation difficulties, including registration, grid connection and environmental approval bottlenecks. As a result, Operation Vulindlela intervened in an effort to reduce red tape around the reform generally, as well as to support individual projects, with the first large registrations, involving two 100 MW solar photovoltaic (PV) projects in the North West province, approved in late May. Of the latest 16 registrations, five projects are above 5 MW in size, with the largest project being an 80 MW solar PV facility, in Limpopo. The majority of the projects, however, remain below 1 MW in size and are described as ‘own use' facilities by Nersa. The commercial projects for which registration certificates were approved and power purchase agreements noted, included: Lephalale Solar's 80 MW solar PV facility, in Limpopo; Msenge Emoyeni's 72 MW wind project, in the Eastern Cape; Richtersveld Sunspot's 40 MW solar PV facility, in the Northern Cape; Sturdee Energy's 10 solar PV project, in Limpopo; and Terradew Three's 0.77 MW facility, in Limpopo. The largest own-use registration related to a 5 MW solar PV project, which will be developed for chemicals group Omnia in Sasolburg, in the Free State. Nersa reports that cumulative registrations under both the 100 MW reform and the previous regime, which had a 1 MW threshold for grid-connected projects, have increased to about 600 and that the registered facilities have a combined capacity of 503 MW.

The National Energy Regulator of South Africa (Nersa) has confirmed that it will implement the Operation Vulindlela recommendation that power purchase agreements (PPAs) should not be a requirement for registration of embedded generation projects below 100 MW. The regulator tells Engineering News that it is currently following procedures to inform the Nersa governors of the change to the registration requirement for qualifying projects. Nersa also confirmed that it is prioritising the automation of the registration process as part of a broader strategy to automate its business processes. “This will ensure the much-needed investment in new generation capacity is added to the grid as soon as possible. “This will also alleviate load-shedding being experienced in the country,” Nersa said in reply to questions posed by Engineering News. The regulator has already committed to reducing its registration processing time from 60 to 45 days and has indicated that it plans to use automation to shorten the timeframe even further. It recently took 73 days for the regulator to register two 100 MW solar photovoltaic projects, the first projects above 10 MW to be registered to date. The projects, which are both located in the North West province, are being developed, financed, constructed and operated by the Sola Group for Tronox Mineral Sands. Other smaller projects have been registered, however, with Nersa informing Engineering News that, for the year-to-date, it had registered 111 qualifying projects. “Registrations are done every month during the Regulator Executive Meetings which are conducted twice monthly.” CEO Advocate Nomalanga Sithole told Parliamentarians earlier this month that Nersa would continue to refine its regulatory practices and methodologies in a bid to become a recognised world-class leader in energy regulation. She indicated, however, that shifting from manual to automated processes would require it to invest in its information and communication technology systems. Nersa reports that the automation project is at a preliminary stage and that no budget has yet been set, or service provider appointed. “No funding has been provided for, but the initial work will be insourced within Nersa.” The decision to implement the Operation Vulindlela recommendation regarding PPAs is anticipated to help unlock an investment pipeline of more than 50 projects, with a combined energy generating potential of about 4 500 MW. The Presidency's project management office head Rudi Dicks has reported that Operation Vulindlela is seeking to remove obstacles to individual projects, as well as to address any remaining systemic constraints. Besides addressing onerous registration requirements, attention is being given to reducing the time it takes to process environmental impact assessments and secure water-use licences, as well as to creating dedicated capacity in Eskom to process grid-connection applications more quickly. Dicks told delegates to the Mpumalanga Energy Summit this week that he expected the “floodgates to open” on further project approvals.

The National Energy Regulator of South Africa (Nersa) has confirmed the registration of the first two 100 MW projects following the August 2021 amendment of Schedule 2 of the Electricity Regulation Act allowing sub-100 MW projects to proceed without a licence. Both solar photovoltaic projects are located in the Ditsobotla Local Municipality of the North West province and are being developed, financed, constructed and operated by the Sola Group, and its partners, for Tronox Mineral Sands. The projects will cost R3.2-billion to build. “The significance of this first move is that it will pave the way for many more large-scale private projects to receive approvals to be able to contribute to generation capacity to the grid,” Sola CEO Dom Wills says in a statement. “Further, this is a clear signal to the market that private power is achievable and there are private funders that are excited to finance this market.” The Presidency's project management office head Rudi Dicks also confirmed the registration of the projects with Engineering News, while Nersa confirmed them to be the first registration of projects larger than 10 MW. Sola tells Engineering News that registration took 73 days. African Rainbow Energy, which is Sola's largest shareholder and an equity partner in the solar projects, reported that the developments had received significant assistance from the Presidency, which has been working, through Operation Vulindlela, to ease the remaining red tape preventing such projects from securing registration. “These projects are starting to realise this commitment as well as African Rainbow Energy's commitment to use new technology to provide large-scale clean power solutions for the economy,” CEO Brian Dames says, adding that the company intends honouring its South Africa Investment Conference pledge to invest R3-billion in the domestic electricity sector. Dicks has reported previously that various systemic and project-specific actions are being taken to unlock an investment pipeline of 58 projects, with a combined energy generating potential of 4 547 MW and a combined investment value of R54-billion. These projects are being pursued by independent power producers (IPPs) in partnership with miners and other energy intensive companies. Besides Nersa registration, the projects are also battling to secure environmental impact assessment (EIA) authorisations as well as budget quotes for grid connection from Eskom. Eskom CEO André de Ruyter has announced that the utility's Grid Access Unit has been beefed up to ensure the flow of cost-estimate letters and budget quotes for the projects, while Forestry, Fisheries and the Environment Minister Barbara Creecy reports that she has written to provincial environment MECs to enquire whether they require any assistance in processing EIAs. Sola reports that financial close of the projects is expected in July, following which the projects, which have a 30-year expected life, will require a construction period of 14 months before entering commercial operation. The developments, the company reports, will also make use of the electricity wheeling framework, enabled by Eskom. Under the mechanism, for which Eskom charges a wheeling fee, energy produced by an IPP in one Eskom connected area, can be sold to clients in other Eskom connected areas. “The advantage of the wheeling framework is that it allows perfect solar regions to be developed and used to provide power to perfect industrial and mining regions,” says Wills. He describes a perfect solar region as a flat area, with high solar resource, very little environmental or social impact, uncomplicated underground conditions and access to a strong grid node with good power evacuation potential. "The projects will have around 28 GWh of excess energy per year that Sola is marketing to interested Eskom-connected clients on a wheeling basis."

Despite facing various global challenges, JSE-listed gold miner Gold Fields achieved a 7% year-on-year increase in attributable equivalent gold production for the quarter ended March 31. While the 580 000 oz of gold produced in the quarter was 8% lower quarter-on-quarter, Gold Fields said it remained on track to achieve its full-year production guidance. The South Deep mine, in South Africa, produced 78 000 oz of gold in the first quarter – a 31% year-on-year increase. Production at Gold Fields' Ghana mines, however, decreased by 5% year-on-year to 210 000 oz. The Australian operations delivered a 10% year-on-year increase in output, at 258 000 oz, while the Cerro Corona mine, in Peru, produced 56 000 oz – a 21% year-on-year increase. CEO Chris Griffith said on May 5 that the first quarter had been a challenging start to the year from a macro perspective. “As we finally seemed to have overcome the worst of Covid‐19, the invasion of Ukraine by Russia has had a material impact. [In addition to] the devastation caused by . . . war, the world is being plagued with heightened inflation, driven by high oil and gas prices and, more broadly, higher commodity prices. "While we expected the mining sector to be challenged by high inflation at the start of the year, the impact has been worse than initially expected,” he said. Griffith noted that high commodity prices had driven inflation in energy costs, logistics and consumables. However, the higher inflationary pressures were offset to some extent by higher‐than‐expected copper by‐product credit, he added. Consequently, Gold Fields would leave its full-year cost guidance unchanged. For 2022, attributable gold equivalent production, excluding the Asanko mine, in Ghana, is expected to be between 2.25-million and 2.29-million ounces, compared with the 2.25-million ounces produced in 2021. Asanko is an equity accounted joint venture between precious metals producer Galiano Gold and Gold Fields. Including Asanko, however, attributable gold equivalent production is expected to be between 2.29-million and 2.34-million ounces. All-in-sustaining costs for the full-year are expected to be between $1 140/oz and $1 180/oz, with all-in costs (AIC) expected to be between $1 370/oz and $1 410/oz. If the large project capital expenditure taking place at the Salares Norte project, in Chile, is excluded, AIC are expected to be between $1 230/oz and $1 270/oz. RENEWABLE ENERGY In terms of Gold Fields renewable energy efforts, Griffith noted that the South Deep mine's 50 MW solar plant, in Gauteng, was on track for commissioning in the third quarter of the year, with installation of the 101 000 solar panels proceeding. Nearly 240 people have been employed in the construction phase of the project, with black economic empowerment contractors carrying out most of the work. After President Cyril Ramaphosa announced last year that the licensing exemption for distributed generation would increase to 100 MW, South Deep applied to the National Energy Regulator of South Africa (Nersa) for approval to increase its solar project output capacity to 60 MW. South Deep obtained approval from Nersa in March. Year-to-date expenditure on the plant amounted to R164-million, with the full-year expenditure expected to reach R554-million. Total expenditure to build and commission the plant is estimated at about R700-million. Griffith said the construction of the plant was currently 9% behind plan, owing to global supply constraints and the need to secure shipping slots. However, he noted that the team remained confident that the plant would still come online in August to supply electricity as planned. Meanwhile, at the Gruyere mine in Australia, the construction of a 12 MW solar plant and a 4.4 MW battery storage facility has been completed with the system now being performance tested and ramping up for commissioning, scheduled for June. Gruyere is a 50:50 joint venture between gold production companies Gold Road and Gruyere...

Eskom spokesperson, Sikonathi Mantshantsha says the National Energy Regulator of South Africa (NERSA) is fully aware and is in support of the work to be done at Koeberg. Mantshantsha says the other unit of the plant will also undergo the same maintenance work, effectively meaning the Koeberg plan may run at half capacity for almost the entire year in 2022. Energy expert and advisor at the Organization Undoing Tax Abuse (OUTA) Chris Yelland

Guest: Gabriel  Klaasen | Youth Coordinator at African Climate Alliance Africa is joined by Gabriel Klaasen, Youth Coordinator at African Climate Alliance decision along with GroundWork and Vukani Environmental Justice Movement in Action to take The National Energy Regulator of South Africa (Nersa) and Minister of Mineral Resources and Energy Gwede Mantashe to court over national plans to allow the construction of new coal-fired power plants. See omnystudio.com/listener for privacy information.

While Eskom has done everything on its side to achieve the legal separation of its transmission entity by December 2021, the matter also depends on getting legislative amendments and regulatory decisions timeously, according to CEO André De Ruyter. The group chief executive made the remarks during a pre-recorded interview with Enlit Africa, which was published on Tuesday. De Ruyter was highlighting some progress points of the power utility's five-point plan. Among these was the legal separation of the generation, distribution and transmission entities. The divisional boards of each of the three entities has been established - as well as their functional separation. Eskom previously told Parliament the separation would cost R500-million. The separation of the transmission entity is first in line and is subject to approval for a transmission licence from the National Energy Regulator of South Africa (Nersa), as well as lenders, Fin24 previously reported. De Ruyter said that Eskom has made progress with the legal separation for transmission. "We have done everything we can to meet the target date of legally separating transmission by December 2021," he said. But the legislative amendments and regulatory decisions that are required will depend on "choreography" between different departments such as Nersa, the Department of Mineral Resources and Energy, the Department of Public Enterprises, National Treasury and Eskom itself, De Ruyter explained. "From our perspective, we are driving the process. But the date can be at risk if we do not get the regulatory interventions in time for us to achieve the legal separation," he said. De Ruyter added that it will be "regrettable" if it is not achieved. Eskom's other prioritises include reducing its some R400-billion debt burden to a more manageable range of between R150-billion and R200-billion. While Eskom has been a beneficiary of equity injections from National Treasury, there is still more work to be done, he said. There is not a single silver bullet to solve the debt problem, he added. Eskom is considering multiple interventions such as optimising its working capital, addressing municipal debt levels, or converting some debt to equity. Finding a debt solution has been "slower" than Eskom would have liked, he said. Eskom is also making headway in terms of encouraging a "high performance" culture. "We are holding people accountable," said De Ruyter. Eskom has made leadership changes at power stations including coal-fired Tutuka, which was in a "shocking state" following years of neglected maintenance, according to Eskom executives who briefed the media on the state of the system on Monday. A number of key people at the station have been suspended and arrests will be made. De Ruyter added that people have been caught for engaging in corrupt activities. "Have we won the war as yet? No, but more and more the signal is getting out to those miscreants who are seeking to enrich themselves at the expense of South Africa and Eskom that crime does not pay and we will get them in the end," he said. De Ruyter added that Eskom would like to see greater support from law enforcement authorities to see more people in "orange overalls". So far Eskom has been pursuing civil cases to recover monies. Last year the power utility managed to recover R1.56-billion from contractor ABB South Africa. This was linked to overpayments to the contractor for the construction of Kusile power station.

Guest: Liz McDaid | founder member  at The Green Connection Despite an ongoing legal fight and environmental concerns, the National Energy Regulator of South Africa (Nersa) on Tuesday approved three generation licences for floating powership provider Karpowership SA.  The Environmental group 'the Green Connection' has responded by saying that the organization is likely to institute legal action against the Karpowership.  The organization's strategic lead, Liz McDaid, has described the decision as "flawed." She will join Mike Wills to explain her view and to assess the decision and its implications.  Liz McDaid is a South African activist who is the "Eco-Justice Lead" for the Southern African Faith Communities' Environment Institute. See omnystudio.com/listener for privacy information.

Consumers face a hefty electricity tariff hike in April as the National Energy Regulator of South Africa (Nersa) has agreed to Eskom's application to increase its tariff by over 15% for the 2021/22 financial year. The agreement between Nersa and Eskom came after the power utility won a case in the Pretoria High Court in October 2020, which allowed it to push for a higher tariff increase than what Nersa was willing to allow.

The government has sold its 13,91 percent stake in Vodacom to the Public Investment Corporation to help fund the 23-billion rand allocation to Eskom. National Treasury says these measures will strengthen Eskom's balance sheet. The National Energy Regulator of South Africa (NERSA) this week declined Eskom's most recent tariff increase application. To assess whether the sale of the Vodacom stake was the most viable option open to government. Sakina Kamwendo speaks to energy expert and Managing Director of EE Publishers, Chris Yelland.