Saving Power at Home & Work

Can Municipalities Now Build Power Stations Without Needing a License?

A recent amendment to regulations seems to imply that anyone can build and operate a power station of any size, without needing to apply for a license (where gaining such a license effectively made it very difficult to do this very thing in the past), provided they meet certain criteria:

Activities exempt from licensing and registration

2 The following activities are exempt from the requirement to apply for, and hold a license under the Act and these activities are not required to register with the Regulator –

2.1 The operation of a generation Facility with or without energy storage for the sole purpose of providing standby or back-up electricity in the event of, for the duration no than, an electricity supply interruption.

2.2 The operation of any generation Facility with or without energy storage irrespective of capacity (MW) where the Facility does not have a Point of Connection.

2.3 The generation Facility is operated to supply electricity to one or more customers and there is no Wheeling of that electricity.

2.4 The operation of a Facility with a capacity of no more that 100 kilowatts which complies with the code and has a Point of Connection, the Distributor has prescribed the conditions relating to the continued use of the Point of Connection, and the Regulator has prescribed the manner in which the Distributor shall keep a register of each Facility.

Government Gazette Vol.690, 15 Dec 2022, No 47757

Municipalities own their own electricity distribution grids, that only connect to the national grid at specific substations on the periphery of the municipal grid, and those connections to the national grid obviously already exist. So if a new power station, built by a municipality is connected to their own grid internally, with no new connection to the Eskom grid being required, and the generated electricity used internally only by municipal customers (so no Wheeling over the national grid id required), then that seems to satisfy points 2.2 and 2.3 of the amended regulation?

So can municipalities now build and operate their own power stations?

At least one lawyer who is familiar with these matters, after reading these amended regulations seems to think that is true.

If that is indeed the case, then municipalities which have in the passed indicated their desire to generate their own electricity are now free to do so!