Nersa pledges to enter 21st century

The National Energy Regulator of SA (Nersa) has committed to upgrading its “archaic” administrative processes to speed up registration of private entities wishing to generate electricity, which is likely to see increased demand after last week’s government reforms to the electricity market.

Last week, mineral resources & energy minister Gwede Mantashe gazetted changes to schedule 2 of the Electricity Regulation Act, which will exempt “distributed generators ”— those who produce electricity for their own use or for sale — of up to 100MW from applying for a licence.

The licensing processes for distributed generation has been slow and expensive, with only a few successful candidates whose projects have taken several years to reach licensing completion. Now, projects up to 100MW will need to register with Nersa but not apply for a full licence.

However, licensing with Nersa could be the next bottleneck, UCT Graduate School of Business professor Anton Eberhard said at a webinar, hosted by the school’s Power Futures Lab on Tuesday.

Also speaking at the webinar, SA Photovoltaic Association board member De Villiers Botha said the industry’s experience was that the average licensing time by Nersa was four months, and the longest nine months, with some recent improvements of two months.

Nhlanhla Gumede, electricity regulator member for Nersa, said the regulator was reviewing its processes.

“We still come from an archaic age where we have physical applications. We need those to go online and we also need to simplify processes. We are not looking at new things, but simpler processes,” Gumede told participants.

The decision to raise the cap for licence exemptions to 100MW has been praised by policy wonks and the industry as a game-changer for the electricity market. It is a key part of the economic reforms President Cyril Ramaphosa is pursuing to help boost economic growth.

“It really is an important step forward that is going to accelerate investment in the sector. These incremental reforms build pressure for the next set of reforms. Pressure will now build to ensure an efficient registration process, and then there are the big issues of access to the transmission and distribution grid, easing the bureaucracy around connections and use of system agreements, fair and more affordable wheeling tariffs. There will now be huge attention on these areas,” said Eberhard.

Grove Steyn, director of Meridian Economics and member of the president’s economic advisory council, said the new cap for licensing “was the most significant market and institutional change to the power sector in generations.

“While there are still some rough edges, which we are hopeful will be fixed, it is the biggest opportunity we have over the short term to stimulate huge industrial investment, build confidence in the economy and think about how we grow jobs.

“So my plea is that for all those involved in the next set of bottlenecks we will have to resolve, even if mundane tasks like fixing grid access agreements or registration rules, those are the jobs and tasks that are creating our economic future in this country,” he said.