CEO Voice - August 2024
Dear SAWEA Members,
In August, the energy sector celebrated the Electricity Regulation Amendment Bill being promulgated. The Amendment Bill sets out to create a competitive and sustainable electricity sector to transform, and ultimately better capacitate the energy sector to meet our South Africa’s energy needs.
At its core, the Amendment Bill supports energy security with more participation and changed management to advance universal access to energy. The Bill seeks to create an electricity industry with a multi-market structure that will enable competition, be managed by a Transmission System Operator (TSO) that will create a fair and transparent platform for the purchase of electricity and ensure oversight and regulation by NERSA.
For the wind industry, the Bill will open access to the grid which will facilitate a lot more investment into the sector. The Bill provides a national framework for wheeling which is the distribution of electricity between IPPs and private off-takers, albeit on an interprovincial level.
August also saw the submission of wind and solar bids for REIPPPP BW7. Although about 1.7GW of wind was submitted for a 3.2GW allocated round, the Association is not confident in the success of more than 75% of these projects due to their location and lack of grid capacity in those parts of the country. Should it turn out that BW7 is indeed another failed round for wind energy projects, the industry would need to revaluate the effectiveness of the public procurement programme in its current format. Our plan is to engage the relevant stakeholders on creating an enabling environment for wind energy investment through public procurement by supporting conditions that will provide the best chance of success.
Following Mandela Month, SAWEA launched our inaugural Mandela House Dinner, providing an invaluable opportunity for us to build relationships and enable conversations with sector stakeholders, with a view to shaping the future of the wind sector as part of the electricity mix in South Africa. Our guest of honour at the event was Eskom Group Chief Executive, Dan Marokane, who was accompanied by the Acting CEO of the National Transmission Company South Africa (NTCSA), Segomoco Scheppers, as part of the Eskom executive delegation.
SAWEA’s commitment to grid transparency and development
The National Energy Regulator of South Africa (NERSA) has been busy with public consultation on several matters pertaining to grid capacity and its allocation. This began with Eskom’s application for the Reservation and/or Preservation of Grid Capacity for Independent Power Producers. The Association noted NERSA’s decision to reject this application citing that Eskom failed to identify specific customers or classes of customers it intended to discriminate against, and did not provide objectively justifiable differences between customers. SAWEA collected, collated and submitted comments on NERSA’s consultation paper for Eskom’s application for Congestion Curtailment to be treated as a Constrained Generation Ancillary Service which was supported in principle by the wind industry to open grid capacity in the short term with a maximum of 10% curtailment on existing and new power plants with compensation from Eskom. We are in the process of drafting a response to the draft Wheeling Rules proposed by NERSA that will enable the ERA Amendment Bill and support the advancement of private off take of wind energy. The Association will continue to engage NERSA and all stakeholders to ensure that these mechanisms are adequately addressed to unlock new grid capacity for the advancement of wind energy in South Africa.
Together with our partners, we launched the third iteration of the South African Renewable Energy Grid Survey (SAREGS) on 19 August 2024. It was encouraging to see that the survey participation nearly doubled this year, reaching 483 contributions, with projected renewable energy capacity increasing by 85% from 93.3 GW in 2023 to 172.4GW in 2024. Contracted capacity has nearly doubled to 133.7GW from 66GW in 2023, with over 60GW expected to possibly come online within the next three to five years. The results of the SAREGS can be viewed as an interactive map here.
As an association, we believe that the SAREGS results play a crucial role in steering current and future grid infrastructure development plans in the right direction. Such grid capacity planning tools include the Grid Connection Capacity Assessment (GCCA) and the Transmission Development plan (TDP). SAWEA remains committed to transparency and the accelerated development of grid capacity; and this is evident through the involvement of its Project Development Standing Committee in this survey.
Windaba 2024 – three weeks to go
With SAWEA’s annual Windaba Conference and Exhibition just three weeks away, the association looks forward to continuing to drive conversations that encourage sustainability and development of wind energy, and renewable energy at large. We will continue to encourage the significant inclusion of wind energy in the country’s energy mix through an exciting programme.
SAWEA appointments
I am excited to welcome Mr Kevin Minkoff from EDF to the SAWEA Board. With over 15 years’ experience in the sector, we look forward to Kevin’s contribution towards our strategic priorities.
SAWEA continues to grow to ensure that our members are well represented. This month we welcomed two new team members: Senior Technical Advisor, Vincent Kok, and Initiatives Coordinator, Agnes Lekula who joined us in July 2024. We are excited to have them on board and look forward to utilising their expertise and passion in driving SAWEA’s progressive mandate.
As we navigate the energy transition, it is clear that renewable energy is the future. SAWEA urges policymakers to continue supporting the transition to renewable energy. By streamlining regulations, we could unlock further investment and promote a sustainably powered South Africa.
Regards,
Niveshen Govender
CEO
