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Draft regulations on municipal electricity generation welcomed

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Dear MyPE

The Democratic Alliance (DA) welcomes the Minister of Mineral Resources and Energy, Gwede Mantashe’s draft amendments to electricity regulations to allow for municipalities to establish their own electricity generation capacity. For years, we have been calling on the Government to empower municipalities to procure energy independently.

These draft regulations are indeed a step in the right direction and could pave the way towards an energy secure South Africa.

In light of him publishing the draft regulations, the DA urges Minister Mantashe to stop his opposition to the City of Cape Town’s (CoCT) court case seeking immediate permission to procure electricity from independent power producers. The DA-led City has been seeking a Section 34 determination, in accordance with the Electricity Regulation Act.

It is no secret that South Africa’s electricity problems over the years have largely been compounded by the fact that Eskom has had a monopolistic grip on the country’s energy supply. These draft regulations are therefore critical in ensuring that South Africa moves beyond Eskom towards more reliable, cleaner and cheaper alternatives.

The DA is however concerned by the fact that the draft amendments require municipalities to apply to the Minister of Mineral Resources and Energy to establish new generation capacity. This means that the Minister will be the final arbiter of all applications. The DA does not agree with this approach and believes this responsibility should be given to a more independent body, such as the National Energy Regulator of South Africa (NERSA). As the national energy regulator, NERSA plays a critical oversight in the sector. The DA therefore also calls on NERSA to get back to work as they have been completely shut down since 27 March 2020. In light of these new draft regulations, NERSA has a lot of work to do, and should not be sitting at home, drawing their salaries with nothing to show for it.

To encourage investment in South Africa’s energy future, there is a need to make energy procurement and generation less restrictive and authoritarian than it currently is, by easing licensing and registration requirements.

The DA looks forward to engaging Minister Mantashe on our concerns and finding adequate resolutions so that capable municipalities like the CoCT can start to independently procure electricity and keep the lights on and help restore our economy.

Regards

Kevin Mileham MP
DA Shadow Minister of Mineral Resources and Energy

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