Businesses, malls and factories will soon be able to generate their electricity and feed it into the grid.
Energy Minister Jeff Radebe told the National Energy Regulator of South Africa (Nersa) to license applications from businesses to be able to do so.
The slight change in policy will help ease South Africa’s severe electricity supply constraints and open the power generation market to private entities alongside Eskom.
Radebe gave Nersa leave to licence 500 Mega Watts (MW) for small-scale embedded generation (SSEG) renewable energy projects, sized between 1MW and 10MW, without him needing to sign it off.
This is expected to open a floodgate of approvals, as some SSEG projects have been stuck in limbo for years, waiting for licencing under the Integrated Resource Plan (IRP).
“The minister’s instruction should provide some relief to frustrated businesses,” said Niveshen Govender, programme manager at the South African Photovoltaic Industry Association (SAPVIA).
The minister also hiked the size restriction for PV solar – from 1MW to 10MW.
While a 1MW PV solar project can power almost 140 medium-income homes over a year, it’s not enough for a large shopping mall or business.
With the size limit being brought up, it gives many businesses and retailers room to go off the grid during the day – and have a surplus.
“Shopping malls of 60,000 square meters of gross leasable area typically have day time peaks of 3MW – 4MW which could be offset through a similar sized solar plant,” Deepak John, COO of New Southern Energy told Business Insider.
New Southern Energy is a solar energy solutions company that builds solar parks for industrial buildings, private game reserves and farms.
“Large industry, mining and manufacturing sites that also have big day time loads would be able to take advantage of this opportunity.”
John further said that there is still uncertainty about how the licenses will be determined and whether surplus energy could be fed back into the national grid.