Recent Developments Impacting the IPP Sector
Oct 19, 2022

Since President Cyril Ramaphosa announced that the cap on embedded generation had been lifted from 100MW earlier this in year in July, two important notices have been gazetted in the National Government Gazette of the Republic of South Africa.  Both notices have a bearing on the Independent Power Producer (IPP) industry, the second having particular importance for the solar sector. While the period for comment has passed for both notices the outcomes of both should be monitored by companies in the sector. 

On the 2nd of September a notice was published announcing the intention to replace a section of the Electricity Regulation Act 4 of 2006 with regard to licensing exemption and registration. This notice related to the already referenced announcement by the President that the 100MW cap would be removed for IPP’s. The content of the amended section, read together with the Regulator’s (NERSA) existing codes, will be important for the industry to scrutinise once finalised. 

In addition, on 8 September a notice was published announcing the possible intention to exclude the development and expansion of solar PV from required environmental authorisations (EIAs). This would however be based on the compliance with an already adopted environmental management instrument (a screening tool).  This refers to the Department of Forestry, Fisheries and the Environment’s National Screening Tool which is a web-based application that allows for an online application for an EIA. 

As the energy crisis continues it is likely government, from a range of departments, will continue to gazette notices which impact the IPP sector. The issue of wheeling, which also has bearing on the local sphere of government, impacts each local municipality’s by-laws in addition to these broader legislative and regulatory considerations and warrants ongoing monitoring by the industry for both risks and opportunities.  

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