South Africa eases rules for private power generation above 1 MW

The South African government has authorised the National Energy Regulator of South Africa (Nersa) to grant permission to process licence applications for self-generation power plants of above 1 MW, even if they don't comply with the Integrated Resource Plan 2019 (IRP 2019). Many energy-intensive industrial groups such as mining companies were requesting deregulation of approval procedures to develop their own power capacities, to ensure reliable power supply in a context of rolling load-shedding episodes. According to the Mineral Councils - South Africa’s mining industry body - mining companies could develop 500 MW to 1,500 MW of self-generation capacity over the next few years once the sector is deregulated.

In March 2020, South Africa issued a regulation exempting generators with a capacity of less than 1 MW from the need to obtain a license from the regulator. According to the IRP 2019, there is a short-term supply gap of approximately 2 GW. This figure has recently been updated by South African power utility Eskom to about 3 GW. Eskom, which accounts for more than 90% of South Africa's power generation, is struggling to ensure power supply due to defaults at its coal-fired power plants.