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NEWS Boosting the economy

Municipalities can now generate their own energy The promulgation of the Electricity Regulation Act Regulations in October 2020 opened the door for municipalities to start investigating how they can generate their own electricity and purchase electricity from independent power producers (IPP). The Minister of Mineral Resources and Energy, Hon. Gwede Mantashe, gazetted amendments to the Electricity Regulations on New Generation Capacity, 2011 in terms of the Electricity Regulation Act, 2006, providing scope for municipalities to develop their own power generation projects, subject to certain requirements.

Solar panels & wind turbines storing energy from the sun

Municipalities can now explore alternative energy sources and through these sources bypass the Eskom grid.

The amendments clarify changes regarding determinations that may be made by the Minister under section 34 of the Act. Important amendments are: 1. Only organs of state active in the energy sector may procure new

Development Plan. •

The conclusion of power purchase agreements between buyers or procurers and IPPs will be further subject to any approvals required in terms of the Municipal Finance

procurement now includes, amongst

Management Act.

others, base load, mid-merit load,

new generation capacity project

peak load new generation capacity,

through an internal mechanism

How municipalities will benefit By introducing these amendments

as defined in section 76(a) of the

the door is now open to municipalities

Municipal Systems Act.

to creatively explore alternative methods

Submit proof that it has complied

of procuring energy. Up until now Eskom

Minister for the procurement or

with the provisions of section

has been the sole and exclusive provider

purchase of new generation capacity

120 of the Municipal Finance Act

of energy to the whole country,

in accordance with the Integrated

and the Municipal Public-Private

including municipalities.

Resource Plan.

Partnership Regulations, where it

2. Municipalities, as organs of state, are now eligible to apply to the

Municipalities can now explore

intends to deliver the new generation

alternative energy sources and through

of this amendment it must:

capacity project through an external

these sources bypass the Eskom grid.

Conduct and submit a feasibility

mechanism described in section

study, where it intends to deliver the

76(b) of the Municipal Systems Act

This would also allow municipalities to generate energy and sell their surplus to

Should a municipality decide to make use


is aligned with its Integrated

generation capacity; and such

and energy storage.

and submit proof that the application

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Municipal Focus Magazine - Volume 51