Electricity Regulation Act, 2006 (Act No. 4 of 2006)

Determinations under Section 34(1) of the Act

Determination relating to New Generation Capacity

Notice No. 753 of 2020
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Notice No. 753

7 July 2020

GG 43509

 

Department of Mineral Resources and Energy

 

The Minister of Mineral Resources and Energy ("the Minister"), in consultation with the National Energy Regulator of South Africa ("NERSA"), acting under section 34(1) of the Electricity Regulation Act, 2006 (Act No. 4 of 2006) (as amended) (the ERA) and the Electricity Regulations on New Generation Capacity (published as GNR. 399 in Government Gazette No. 34262 dated 04 May 2011) ("Regulations"), has determined as follows:

 

1. that new generation capacity is needed to be procured to contribute towards energy security, accordingly,
1.1 2000 megawatts (MW) should be procured from a range of energy source technologies in accordance with the short-term risk mitigation capacity allocated under the heading "Others", for the years 2019 to 2022, in Table 5 of the Integrated Resource Plan for Electricity 2019-2030 (published as GN 1360 of 18 October 2019 in Government Gazette No. 42784) ("IRP 2019"). The procurement programme shall target connection to the Grid for the new generation capacity as soon as reasonably possible but by no later than December 2021;

 

2. electricity produced from the new generation capacity ("the electricity") shall be procured through one or more tendering procedures which are fair, equitable, transparent, competitive and cost-effective and shall constitute IPP procurement programmes as contemplated in the Regulations ("procurement programmes");

 

3. the procurement programmes shall target connection to the Grid for the new generation capacity as soon as reasonably possible in line with the timetable set out in Table 5 of the IRP 2019. Deviations from the timetable set out in Table 5 are permitted to the extent necessary taking into account all relevant factors including prevailing energy security risks, the time required for efficient procurement and the required construction timelines for such new generation capacity facility;

 

4. the electricity may only be sold to the entity designated as the buyer in paragraph 7 below, and only in accordance with the power purchase agreements and other project agreements to be concluded in the course of the procurement programmes;

 

5. the procurer in respect of the procurement programmes will be the Department of Mineral Resources and Energy;

 

6. the role of the procurer will be to conduct the procurement programmes, including preparing any requests for proposals and/or related and associated documentation, negotiating the power purchase agreements, facilitating the conclusion of the other projects agreements, and facilitating the satisfaction of any conditions precedent to financial close which are within its control;

 

7. the electricity must be purchased by Eskom Holdings SOC Limited;

 

8. the electricity must be purchased from independent power producers.

 

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