groundWork Statement on the Presidential Announcement of the intended amendment to Schedule 2 of the Electricity Regulation Act (4 of 2006) - New Embedded Generation Projects Must Not Include Dirty Fuels and Leave the Poor Behind.
11 July 2021 - While we welcome the President’s announcement on 10th June 2021 to increase NERSA’s licensing threshold for embedded generation projects from 1MW to 100MW with exemption from licensing requirements which enables self-generation of power, we remain concerned that:
- The embedded generation allowance is not exclusively renewable energy generation.
- If permitted, the burning of LNG, diesel or other fossil fuels is considered carbon intensive energy generation that will add to greenhouse gas emissions (GHGs) responsible for the acceleration of climate change. This may also have implications for the new Carbon Tax regulations.
- Clarity must be obtained on whether embedded generation will include incineration projects which are highly problematic for their GHGs as well as highly toxic carcinogenic air emissions that will impact on health.
- The requirements for grid compliance are unclear at this stage will have to be reviewed.
- While we welcome Municipalities having discretion to approve grid connection applications in their networks based on assessment of the impact on their grid, we are concerned about the transparency of these processes and opportunities for corruption and bribes.
- In addition, the inconsistency in tariff charges across the country including storage tariffs and new tariffs that may be imposed will exacerbate high and uneven tariff structures.
- Wheeling (network use) charges and connection fees are uncertain at this stage which is also expected to impact on the cost of self-generation.
- Capital funding for embedded generation is high, making it more affordable by corporates and high- to middle- income earners which promotes privatisation of energy and excludes access by 60% of South Africans, that is, the poor.
- We must prevent a situation where high-income groups (including corporates) leave the grid to generate their own electricity, leaving low-income groups to pay for the grid. This will create energy slums as the poor will not be able to afford high tariffs and the grid will not be utilised or paid for.
- Policies that prevent energy feed into the grid remain problematic.
In the just transition of moving away from the unequal society imposed by the Minerals-Energy Complex impoverishing communities living alongside its industries, more needs to be done to include these communities that have lived with the impacts of fossil fuel energy generation. Support for socially owned renewable energy systems for the affected communities must be included in Government’s Economic Reconstruction and Recovery Plan as part of the presidential commitment to a just transition. This should include livelihood and job opportunities from local manufacture of renewable energy components with opportunities for installation, repair, recycling, and maintenance. Communities and workers from the fossil fuels sector can be given new opportunities in a cleaner energy future that addresses the conditions of the poor and marginalised and does not leave them behind.