NERSA Reasons for Decision (RFD): Small Scale Embedded Generation within Municipal Boundaries

The attention of AMEU members is drawn to the existence of a document “Standard Conditions for Small Scale (less than 100kW) Embedded Generation within Municipal Boundaries” recently made available (prior to 2 December 2011) on the NERSA website http://www.nersa.org.za/ (select REGULATOR DECISIONS > Electricity). The document is undated but refers to a decision of the Energy Regulator dated 22 September 2011.

In terms of the decision, municipalities are required to register and maintain a database of all small scale (<100kW) embedded generation within their areas and report to the Energy Regulator on an annual basis on a number of statistics related to this generation. It also states that `....these conditions are guidelines currently but the intention is to include them in the Licence conditions of the municipalities when they are renewed.’

NERSA explains in the reasons for decision that `The sheer number of installations would pose significant problems for NERSA in terms of the ability to handle the applications that would be received for license or registration. And is it questionable if it was the intention of those who drafted the Electricity Regulation Act for this kind of generation to be licensed or registered by the Energy Regulator’. In NERSA’s opinion `It seems most appropriate that this should be done at municipal level because the municipalities are the most impacted party.’

In conclusion, NERSA announces that ‘These requirements will facilitate the orderly and sustainable development of the industry and should not add excessively to the regulatory burden as the information required is required (sic) for the good management of these facilities by the licensees.’

While the existence of some control over this growing market is welcomed, a number of queries were directed to NERSA:

• Section 22 of the document (page 7) states that `the decision has been considered in terms of the (National) Energy Regulator Act, 2004 (Act No.40 of 2004). Please will you confirm which section of this Act relates to this decision and how it is linked to the Electricity Regulation Act, 2006 (Act No.4 of 2006) or the Electricity Regulation Amendment Act, 2007 (Act No.28 of 2007)?
• Please will you advise what consultation has taken place [Section 10 (1)(d) of the abovementioned Energy Regulator Act] with licensed municipalities, other than the reported approach by the City of Cape Town and Nelson Mandela Bay (Municipality)?
• Please will you advise if the licensed municipalities have been formally advised by NERSA that they must comply with these standard conditions as part of their licensed conditions of supply?
• Will a similar database be established by Eskom in its licensed areas?

To date, no response has been received by NERSA.

A copy of the RFD document is available on the NERSA website as well as on the AMEU website, here.