Nersa – Renewable energy regulations



Image of an engineer standing at a commercial solar PV site

The Electricity Regulation Act

Schedule 2 of the Electricity Regulation Act, 2006 (ERA) defines categories of generation facilities and electricity resellers. The ERA act further provides a set of boundaries on the exemption from the requirement to hold a generation license. This document aims to provide some insight on new amendments that were published in November 2017 and is published/circulated under our standard disclaimer.

In this document, Amendments to Schedule 2 are highlighted and discussed as they may have a far reaching impact on South Africa’s growing solar PV market and of course because everyone is talking about the requirements, acts and legal implications of embedded generation which, for the most part are commercial and residential solar PV systems. These are some of the topics covered in our solar PV training courses that also cover design principles

Previous amendments

Only three categories were exempted from licensing as per the ERA, and these were:

  1. Demonstration sites
    1. Any generation plant constructed and operated for demonstration purposes only and not connected to an inter connected power supply;
  2. Own use sites
    1. Any generation plant constructed and operated for own use;
  3. Off-grid sites
    1. Non-grid connected supply of electricity except for commercial use.
New amendments

On 10 November 2017, the South African Minister of Energy published amendments to Schedule 2 and it is important to consider how these amendments will impact South Africa’s growing Solar PV market. Eight categories of generation facilities are now exempted from the requirement to license according to the latest Schedule 2 amendments:

  1. Grid tied
    1. PV Plants smaller than 1MW supplying power to a single customer (regardless of wheeling) that has entered into a connection agreement with the holder of a relevant distribution license (i.e. municipality) subject to the IRP.
  2. Off-grid
    1. PV plants smaller than 1MW supplying to a single customer or owner of the generation facility; or for self consumption on the same property on which the generation facility is located.
  3. Demonstration sites
    1. Facilities where the electricity produced is not sold and the generation facility will not be in operation for more than 36 months;
  4. Waste recovery
    1. Generation facilities where electricity is produced from a co-, by-, waste-, or residual product of an industrial process and supplied to a single customer who is either a related customer or owner of the generation facility; or for self consumption on the same property on which the generation facility is located.
  5. Back-up power
    1. Back-up generation in the event of and for the duration of any electricity supply interruption;
  6. Previously exempted and un-registered plants
    1. Continued operation of existing generation facilities which, prior to the amendment of Schedule 2 of the ERA were
      1. Exempt from requiring a license; or
      2. Operational, and within 3 months of the commencement of this Schedule 2 has declared non-compliance with the Schedule to the National Energy Regulator (NERSA) and signed an agreement to comply within a time frame as specified by NERSA.
  7. Wheeling
    Distribution facilities used exclusively for the wheeling of electricity regardless of whether it is using the national grid.
  8. IPP’s
    Electricity resellers in circumstances where NERSA has granted approval of the service delivery agreement and the tariff or price charged by the reseller does not exceed the normal tariff or price charged by a registered licensee and there is an agreement with the holder of the distribution license.