Draft regulations proposed in January by South Africa’s Department of Minerals and Energy have some feeling concerned that it may hinder investment in the renewable energy sector. The regulations, falling under the Electricity Act 4 of 2006, are for new generation capacity of all forms of energy by independent power producers, including coal, biodiesel, sun, wind, water, and waste. The regulations set out how South Africa’s energy regulator Nersa will license independent producers and the process they have to follow, a measure that conflicts to the regulator’s renewable energy feed-in tariff (Refit) initiative.
Worldwide Fund for Nature (WWF) climate change program manager Richard Worthington said the regulations should be withdrawn because they were incompatible with the government’s commitment regarding the energy industry. “Competitive bidding to initiate renewable energy development and deployment has a terrible international track record, while feed-in tariffs has a strong one,” he said.
He said the new regulations and a proposed amendment to the Electricity Regulation Act are inconsistent with a policy to drive investment in renewable energy, as well as with current ruling party ANC resolutions on renewables.
The national regulator will have to oversee both the new regulations as well as feed-in tariffs, which Ruth Rabinowitz, convener of the e-Parliament Renewable Energy Activists, believes will be a huge challenge for the regulator. "One cannot help wondering who is waiting to profit from contracts, with no concern for the impact on the public, the country, job creation in South Africa or the state of the globe, but with lots of interest in personal pockets preparing to bulge," she said.
It should also be noted that Nersa announced at the beginning of March that it would delay the proposed Refit until the end of the month. The energy regulator delayed its recommendation on the size of subsidies by three weeks because of growing feedback from interested groups. NERSA said it needed more time to assess and consolidate the inputs and comments with 21 presentations being made during the Refit public hearings held on February 5 with 145 stakeholders in attendance.