Draft changes to electricity act nearly done — Mantashe

Mineral resources & energy minister Gwede Mantashe hopes to finalise the draft amendments to the Electricity Regulation Act in the coming week, allowing for sizeable independent power projects to proceed without a licence from the National Energy Regulator.

Speaking at an Absa webinar on Wednesday, Mantashe said he hopes to finalise the amended draft Schedule 2 of the act in the next week and “hand over to the president to reconcile thoughts”.

As the country faces power supply shortages and rising tariffs, Mantashe has come under pressure to lift the licensing exemption threshold for independent power projects.

He indicated the department would seek to raise the threshold to 10MW from 1MW. But amid fierce criticism that the move was insufficient, President Cyril Ramaphosa last month announced the threshold would be lifted to 100MW, effectively allowing major power projects to proceed without a licence from the regulator. Getting a licence has proved a slow and cumbersome process.

Mantashe said on Wednesday that, though not licensed, every project under 100MW will still need to obtain permits to ensure they meet the requirements for grid compliance.

“In the department of energy discussions, we are trying to understand the distinction between a permit and a licence,” Mantashe said.

The department has not yet decided what the objective is, he said.

“Are we deregulating energy or are we deregulating renewable energy? Or are we making it easier to operate? That question is being debated internally. We’ll answer it, and Schedule 2, as revised and gazetted, will talk to that issue.”

Mantashe reaffirmed the department’s interest in bringing more nuclear power into the grid after 2030, noting that a number of countries were now looking to nuclear as a clean source of base-load power able to complement intermittent renewable power technologies.

“There are many that say cost is everything. Yes it is, but my argument is when we issue a request for information and request for proposal, we are testing the market.

“If the response from the market says we can build a nuclear power station, even if in modular form, let’s go for it,” he said.