Navigating Rules and Regulations in the SSEG Space by Jo Dean - PowerPoint PPT Presentation

Navigating Rules and Regulations in the SSEG Space by Jo Dean SAREC SAESA SAPVIA

INTRODUCTION The main objective of SAREC is to promote the renewable energy sector in South Africa by acting as an umbrella body to the industry associations representing specific renewable energy technologies, like Wind and Solar and to act as a collective custodian and voice for the RE industry in South Africa. As the Umbrella Body of Renewable and Storage associations in South Africa, SAREC represents the views of its members in several structures and bodies, each with a shared need as well as industry specific needs. Jo Dean is Manco Member of SAREC as well as board member of SAPVIA and SAESA For the last year the focus has been Policy , Regulation and the IRP with regards to the Renewable Energy and Storage space.

SSEG mood and feeling from Industry

“We should put all the negativity behind us because a new dawn is upon us,” President Cyril Ramaphosa of f South Afr frica declared a new era of f hope for th the country as he used his is second day in in office to deli liver th the State of f th the Nation address So today we will ill not dwell on what went before but where we are going to.

Energy Transition Has Arrived In In SA

Small Scale Generation is divided into two categories CATEGORIES OF Less than 1 MW SMALL SCALE EMBEDDED 1 to 10 MW GENERATION With Separate Regulations and Rules

Department of Energy (DOE) The empowering statute is the Energy Regulation Act 4 of 2006 (“ERA”), This is defined in the ERA as “this Act”, and the definition provides that ““this Act” includes any regulation or rule made or issued in terms thereof.” Section 97 of the Constitution, transferred the administration and powers and functions entrusted by specified legislation to, the Minister of Energy by Proclamation No. 44, 2009. The Department’s implied mandate in terms of the Constitution is therefore to govern the Energy Portfolio using reasonable legislative and other measures Who is is the fi first part rty to ru rule les and regulatio ions

Who is the second party to the rules and regulations THE NATIONAL ENERGY REGULATOR (NERSA) IS A THE MANDATE OF NERSA IS DERIVED FROM NATIONAL ENERGY REGULATOR OF REGULATORY AUTHORITY ESTABLISHED AS A LEGISLATION GOVERNING AND PRESCRIBING THE SOUTH AFRICA (NERSA) JURISTIC PERSON IN TERMS OF SECTION 3 OF THE ROLE AND FUNCTIONS OF THE REGULATOR . NATIONAL ENERGY REGULATOR ACT, 2004 (ACT NO. 40 OF 2004). NERSA’S MANDATE IS TO REGULATE THE ELECTRICITY, PIPED-GAS AND PETROLEUM PIPELINES INDUSTRIES IN TERMS OF THE ELECTRICITY REGULATION ACT, 2006 (ACT NO. 4 OF 2006)

Sim implified but Im Important 1 2 In the context of the ERA, the power to make The delegation point is important to appreciate, as regulations has been delegated to the Minister of it means that there is a clear distinction between Energy, whilst the Regulator is the custodian and the Minister’s regulations and his powers in this enforcer of the regulatory framework provided for regard, and the Regulator’s rules, and its powers to in the ERA and has been specifically authorized to regulate and administer procedural matters. make rules.

DOE Section 8 gives the power to the Minister to determine in consultation with the Regulator and by notice in the Gazette amendments and changes to regulations and promulgations Wit ith regards to NERSA SSEG Rules The power to make rules, as distinct from regulations, is specifically given to the Regulator in the ERA, where section 4(iv) provides the Regulator “must issue rules to implement the Act”. Importantly, also, it is the Regulator who “must establish and manage monitoring and information systems…”.

Less than 1 MW DOE • Section 8 gives the power to the Minister to determine in consultation with the Regulator and by notice in the Gazette, that a section 7(1) activity does not require a licence. It is in the exercise of this power that the Minister seeks to promulgate the 2018 Schedule 2. In order to give effect to this provision, an amendment to Schedule 2 is required, pursuant to Section 36(4). • The Minister is further empowered in section 9(1), in consultation with the Regulator and by notice in the Gazette, to determine that activities that do not require licensing pursuant to section 7 read with section 8, must register with the Regulator.

Less Than 1 MW NERSA IN THE SCHEME OF THE ERA, IT IS THE REGULATOR IT IS THEREFORE CLEAR THAT, FIRSTLY, WHO IS DELEGATED WITH THE POWER TO REGISTRATION OF AN ACTIVITY UNDER THE ERA REGISTER AND ON WHOM THE DUTY TO REGISTER MUST BE UNDERTAKEN BY THE REGULATOR, WHO IS IMPOSED, WHERE THE MINISTER SO IS OBLIGED BY THE ACT, TO RECEIVE ANY DETERMINES AN ACTIVITY REQUIRING APPLICATION FOR REGISTRATION. SECONDLY, REGISTRATION IN THE GAZETTE. SECTION 9(2) REGISTRATION MUST BE GRANTED AND MAY NOT PROVIDES THAT A PERSON WHO IS REQUIRED TO BE REFUSED, EXCEPT FOR NON-COMPLIANCE WITH REGISTER, MUST DO SO IN THE FORM AND IN LIMITED PROCEDURAL GROUNDS OR THE BROAD ACCORDANCE WITH THE PRESCRIBED PROCEDURE. OBJECTIVES OF THE ERA, WHICH ARE ESSENTIALLY POLICY ISSUES

• The Minister will promulgate a 2018 Schedule 2 of the ERA by way of the Notice, in terms of which certain SSEG and Reseller activities are Exempt from requiring a licence under the ERA. The Minister has further made a Determination in terms of section 9(1) of the ERA, requiring Where are we that persons involved in certain of the Schedule now 2 activities, must Register with the Regulator. The promulgation of 2017 had errors and the above promulgation is expected within weeks, which will be published for comment for 30 days and then be implemented.

The following activities are exempt from the requirement to apply for and hold a licence under the Act, and these activities must be registered with the Regulator; • 2.1 The operation of a generation facility with a generating capacity of no more than 1MW which is connected to the transmission or distribution power system, in circumstances in which- • 2.1.1 the generation facility supplies electricity to a single customer and there is no wheeling of that electricity through The regulation the transmission or distribution power system; and • 2.1.2 the generator or single customer has explained entered into a connection and use-of-system agreement with, or obtained approval from, the holder of the relevant distribution licence; and • 2.1.3 as at the date on which the connection and use-of-system agreement is entered into or the approval is obtained, the Minister has not published a notice in the Government Gazette stating that the amount of megawatts (MW) allocated in the integrated resource plan for embedded generation of this nature has been reached.

• 2.2 The operation of a generation facility with a generating capacity of no more than 1MW which is connected to the transmission or distribution power system, in circumstances in which- • 2.2.1 the generation facility is operated solely to supply a single customer or related customers by wheeling electricity through the transmission or distribution power system ; and • 2.2.2 the generator has entered into a connection and use-of-system agreement with the holder of the distribution or transmission licence in respect of the power system over which the electricity is to be transported; and • 2.2.3 as at the date on which the connection and use-of-system agreement is entered into, the Minister has not published a notice in the Government Gazette stating that the amount of MW allocated in the integrated resource plan for embedded generation of this nature has been reached.

• 2.3 The operation of a generation facility with a generating capacity of no more than 1MW which is not connected to the transmission or distribution power system, in circumstances in which- • 2.3.1 the generation facility is operated solely to supply electricity to the generator or owner of the generation facility in question; or • 2.3.2 the generation facility is operated solely to supply electricity for consumption by a customer who is related to the generator or owner of the generation facility; • 2.3.3 the electricity is supplied to a customer for consumption on the same property on which the generation facility is located.

• 2.4 The operation of a generation facility for demonstration purposes only, whether or not the facility is connected to a transmission or distribution power system, in circumstances in which- • 2.4.1 the electricity produced by the generation facility is not sold; and • 2.4.2 if the facility is connected to the transmission or distribution power system, the generator has entered into a connection and use-of- system agreement with, or obtained approval from, the holder of the relevant transmission or distribution licence; and • 2.4.3 the facility will be in operation for not more than 36 months.