The publication of the procedures, available from NERSA, follows changes to the Electricity Regulation Act (ERA) exempting on-board electricity generation projects with a capacity of up to 100 MW from the electricity grid. need to obtain a production license. Although these projects no longer require a license, they must register with NERSA and pay a registration fee. The registration procedures state that the application must be submitted by the operator of the production facility and that the fee is set at R200 (USD 13) per production facility.
Energy law expert Emma Dempster of Pinsent Masons, the law firm behind Out-Law, said the registration procedures were more administrative and extensive than expected by the market. Applications will go through an evaluation process, which includes an economic analysis that appears to be open-ended.
NERSA said that once an applicant submits their application, an analyst will assess the document, prepare a draft decision and reasons for the decision and a draft registration certificate with the relevant registration conditions.
The assessment process will take 45 days and will include an assessment of the areas including, but not limited to, generator technical parameters such as installed capacity, type of technology, and grid connection details.
The analyst will also perform an economic analysis based on the economic benefits of the generator, such as employment during construction and operation.
Where applicable, the generator’s power purchase contract (PPA) will be assessed by extracting or summarizing legal parameters that illustrate points such as contractual capacity, tariff, contract duration, dispute resolution and the counting.
Dempster said the basis on which NERSA will undertake an economic analysis of the project and the reasons for doing so were unclear.
“Presumably this is to ensure that the request is not contrary to the purposes of the ERA as provided for in Article 9 (43) of the Registration Procedures, but it is difficult to see how this would be the case in the ‘absence of further clarification,’ she said.
She said ERA had not suggested that the registration would be subject to economic analysis, or that NERSA would be able to reject the application on economic grounds.
“Clarification will need to be sought from NERSA as to the intent behind including such an economic analysis as a condition of the registration process and how this will be analyzed,” Dempster said.
NERSA said it would take about two months for an application to be approved once it has been submitted. Dempster said this should be factored into the development timeline, with producers taking into account that any PPA must be finalized before an application is submitted.
The registration procedures also set out the responsibilities of network service providers under the ERA and the requirements for NERSA to publish an annual report on registered generation facilities – including details of any related complaints or incidents. to registered entities.