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

• f 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

CATEGORIES OF SMALL SCALE EMBEDDED GENERATION

Small Scale Generation is divided into two categories

Less than 1 MW 1 to 10 MW

With Separate Regulations and Rules

Who is is the fi first part rty to ru rule les and regulatio ions

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 the second party to the rules and regulations

NATIONAL ENERGY REGULATOR OF SOUTH AFRICA (NERSA)

THE NATIONAL ENERGY REGULATOR (NERSA) IS A REGULATORY AUTHORITY ESTABLISHED AS A JURISTIC PERSON IN TERMS OF SECTION 3 OF THE 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) THE MANDATE OF NERSA IS DERIVED FROM LEGISLATION GOVERNING AND PRESCRIBING THE ROLE AND FUNCTIONS OF THE REGULATOR.

Sim implified but Im Important

In the context of the ERA, the power to make regulations has been delegated to the Minister of Energy, whilst the Regulator is the custodian and enforcer of the regulatory framework provided for in the ERA and has been specifically authorized to make rules.

1

The delegation point is important to appreciate, as it means that there is a clear distinction between the Minister’s regulations and his powers in this regard, and the Regulator’s rules, and its powers to regulate and administer procedural matters.

2

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

Where are we now

• The Minister will promulgate a 2018 Schedule 2
• f 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 that persons involved in certain of the Schedule 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 regulation explained

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 transmission or distribution power system; and

• 2.1.2

the generator or single customer has entered into a connection and use-of-system agreement with, or

• btained 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

• wner 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.

• 2.5

The operation of a generation facility where the electricity is produced from a co-product, by-product, waste product or residual product of an underlying industrial process, in circumstances in which-

• 2.5.1

the generation facility is operated solely to supply electricity to the generator or owner of the generation facility in question;

• 2.5.2

the generation facility is operated solely to supply electricity for consumption by a customer who is related to the generator or

• wner of the generation facility or
• 2.5.3

the electricity is supplied to a customer for consumption on the same property on which the generation facility is located.

• 2.6

The continued operation of an existing generation facility which, immediately prior to the date of commencement of this Schedule, was exempt from the requirement to apply for and hold a licence under the Act, in circumstances in which-

• 2.6.1

the generation facility is connected to the transmission or distribution power system, the generator has entered into a connection or use-of-system agreement or both with the holder of the relevant transmission or distribution licence; and

• 2.6.2

the generation facility has filed for registration with the regulator within 6 months of commencement of the registration process by the Regulator.

• 2.7

The operation of a distribution facility that connects the generation facility contemplated in items 2.3 to 2.6 to a customer at the location of the generation facility, or transmission or distribution power system where electricity is wheeled to-

• 2.7.1

the customer, if the electricity is not to be transported through the transmission or distribution power system; or

• 2.7.2

the point of connection, if the electricity is to be transported through the transmission or distribution power system.

• 2.8

The sale of electricity by a reseller in circumstances in which-

• 2.8.1

the tariff or price charged by the reseller to customers does not exceed the tariff or price that would have been charged to such customers for the electricity if it had been purchased from the holder of a distribution licence for the area in which the electricity is supplied to the customer; and/or an operator of a licensed distribution facility wherein the bulk point is or such customers would have been connected;

• 2.8.2

the reseller has entered into either a service delivery agreement in terms of Municipal Act, 2000 (where the licensed distributor is a municipality) or an agreement (where the licensed distributor is not a municipality) with the distributor regulating the relationship between the reseller and the holder of the distribution licence and the obligations of the reseller in respect of the quality

• f supply to customers (where the licensed distributor is not a municipality). The general

conditions of the service delivery agreement must have been approved by the Regulator.

What next ?

Once the Promulgation of DOE is gazetted, then : NERSA will publish the rules for 30 Day commenting and then they will apply NERSA has to develop the rules to flesh out via explanation the promulgation and the applicable rules The Generator The Distributor The Re-Seller rules

Is there anything to worry about?

Most definitely not As explained the rules to be implemented by the Regulator are to enforce exactly that of the promulgation Exemption of Less than 1 MW , merely requiring registration , and confirmation of a approved grid connection by the utility It has been so debated but simplistically it is the registration of the exempted activity and confirmation of compliance.

The required Information

• Name of Generator-
• Registration Number or ID Number-
• Contact details of Generator- Tel number and email-
• Name of Customer if not the same as Generator-
• Location of Generator- Street Address and GPS co-ordinates-
• Name of Transmitter/ Distributor concerned-
• Generation Capacity in KWacP-
• Description of Technology used-
• Connection to power system- Yes/ No
• Account Number with Transmitter/ Distributor (if applicable)-
• Date of Expected Commencement of Generation-
• Expected hours of operation of Generator-
• Duration of Operation- if for Demonstration Purposes-
• Details of Distribution Facility to be connected to Generator- if applicable
• Details of operator of Distribution Facility if different from Generator- if applicable
• Details of location of Customer or point of connection- if applicable.
• Copy of Connection and Use of System Agreement – if applicable and If this does not comprise the Application

Why

The generators are assessed as a system with the ability to generate up to 1MW AC ( i.e the total power that could be exported) As this market grows the data captured , is merely to assist the utility in planning its network and NERSA for balancing of supply and demand From a safety perspective From a grid connection compliance perspective A distributor may not refuse a connection unless not compliant For reporting into DEA w.r.t to GHG reduction

How

Lets discuss- Rome was not built in a day, and we all need to work together

• SALGA and AMEU are working on standard grid

connection procedures ( Metros are informed – Smaller Utilities need helping hands) But with the grid connection approval , the closing most obvious step is the proposed registration at the gate of the utility as sub registers of a global register.

• ESKOM GAU too has devoted many hours in developing a

procedure for SSEG ( Feel free to contact and we will publish guidelines and assistance ) If however we as Industry don't accept a system that can be refined over time then DOE and NERSA will remain resistant in putting their toe in the water. A good regulation can stand strong. The ERA is complex and we need to work with it Arguments that there should not be the curtail clause – think on this if the minister does not have a handbrake then the Grid could be destroyed.

1 to 10 MW SSG

Exciting times

• The IRP allocation frees up this space as per requirements of

ministerial determination and we await the place holder size

• NERSA and DOE will develop the licence application process
• Anddddddd………………………………………………..