South Africa: President Cyril Ramaphosa Announces Significant Step in Reforming Electricity Sector

press release

President announces major reform to enable investment in embedded generation and promote energy security

President Cyril Ramaphosa, together with Minister of Mineral Resources and Energy Gwede Mantashe, today (10 June 2021) announced a significant step in further reforming our electricity sector towards the achievement of a stable and secure supply of energy.

Following an extensive public consultation process undertaken by the Department of Mineral Resources and Energy, Schedule 2 of the Electricity Regulation Act will be amended to increase the licensing threshold for embedded generation projects from 1 MW to 100 MW.

New generation projects up to 100 MW in size will now be registered and will be able to connect to the grid.

Generation facilities will still need to have their registration approved by the regulator and meet all of the associated requirements, including grid connection approval from the network provider.

Generators will be allowed to sell electricity to one or more end-use customers, on the condition that they are registered and have secured grid connection approval.

This intervention is undertaken within the broader context of electricity industry reforms currently underway. The raising of the licensing threshold is expected to unlock significant investment in new generation capacity in the short and medium term.

President Ramaphosa said: "This decision reflects our determination to take the necessary action to achieve energy security and reduce the impact of load shedding on businesses and households across the country."

The final version of the amendment to Schedule 2 and associated rules will be published within the next 60 days.

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