MUNICIPAL
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
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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
62
is aligned with its Integrated
generation capacity; and such
and energy storage.
•
and submit proof that the application
Municipal Focus
