Comment on Electricity Regulation Act amendment
The intention “to increase the threshold for embedded generation from 1 MW to 10MW and determine that a person who operates a generation facility contemplated in items 3.1, 3.2, 3.3, 3.4 or a person who performs the activities of a reseller as contemplated in item 3.7 of the Schedule, must register with the Regulator.” Owners of generation plants of less than 10 MW will therefore no longer be required to acquire a licence from the National Energy Regulator. Whilst this is a welcome lifting of restrictions on electricity generation, there is so much more that needs to be done if South Africa is to take its place as one of the highly developed countries of the world.
One of the most urgently needed changes is the removal of the monopoly status that Eskom has in the generation and transmission of electricity. This monopoly and the absence of large-scale independent competitors in the generation and supply of electricity inexorably leads to higher prices. Eskom would not possibly have been assured of the price increases that NERSA has granted Eskom of 8.76% for 2020/21 and 10.58% in 2021/22, if the electricity supplier had been operating in a fully competitive environment.
The FMF’s submission can be read HERE.
Eustace Davie is a director of the Free Market Foundation.
Publish date: 03 June 2021
The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation.