Page 43 - Energize October 2022

VIEWS AND OPINION

Amendments proposed to the 100 MW licensing

exemption and registration requirements in the

Electricity Regulation Act, 2006

by M Kota, J van der Poel, T Terblanche and A Hoekstra, Webber Wentzel

Proposed amendments to the Electricity Regulation Act will amend the licensing exemption and
registration requirements for generating, trading, transmitting and distributing electricity.

n 2 September 2022, the Minister of Mineral Resources and Energy published remain exempt from both licensing
proposed amendments to Schedule 2 of the Electricity Regulation Act, 2006 (ERA) and registration or whether they
Ofor public comment (Government Notice 2459 in Government Gazette 46850) will, on the coming-into-effect of the
(the Schedule 2 Notice). The Schedule 2 Notice would, once effective, amend the current proposed amendments, be required
licensing exemption and registration requirements for trading, generation, transmission to be registered with NERSA. If the
and distribution of electricity in terms of the ERA. intention were to subject the activities
In his speech on 25 July 2022, the President announced that the licensing threshold listed in paragraph 2 to the NERSA
for embedded generation would be removed imminently to encourage increased private registration requirement, this could
investment in electricity generation. This much anticipated removal of the 100 MW have the potentially unintended impact
threshold is the headline change proposed in the Schedule 2 Notice. of requiring rooftop solar facilities and
large generators for back-up power to be
In addition to fixing some drafting issues and deleting definitions that are already registered with NERSA.
contained in the ERA, the Schedule 2 Notice also proposes the following noteworthy On balance, it seems to us that
amendments: the better interpretation is that these
facilities will, on the language of the
Activities exempt from licencing Schedule 2 Notice, remain exempt
The activities listed in paragraph 2 of Schedule 2 were exempt from licensing and from both licensing and registration
registration with the National Energy Regulator of South Africa (NERSA) under ERA. In requirements. This is because, in terms
brief, the activities listed in this paragraph are, the operation of: (i) a generation facility for of section 9(1) of ERA, the Minister must
back-up electricity; (ii) a generation facility that does not have a point of connection; and specifically determine which activities are
(iii) a generation facility with a capacity of 100 kW or less (and has a point of connection). subject to registration, and this could not
The Schedule 2 Notice indicates that these activities will continue to be exempt simply be done by default. Accordingly,
from licensing, but it deletes the current language which provides that these activities silence on whether a particular activity is
are also exempt from registration with NERSA. This deletion, which has not been subject to registration would mean that
given any context, makes it unclear whether it is intended that these activities should such activity is not subject to registration.

Tina Terblanche Jason van der Poel Mzukisi Kota Aviva Hoekstra

energize | October 2022 | 43