Nersa on self-generation of power: Here’s what you need to know

The National Energy Regulator of South Africa (Nersa) is making waves in the energy industry by encouraging self-generation of power, particularly through the use of solar energy. In a recent interview with CNBC Africa, Nhlanhla Gumede, Regulator Member at Nersa, shed light on the organization's stance and the potential impact of this decision. The approval for miners to use solar power has sent a positive message to mining companies and their investors, emphasizing sustainability and growth in mining operations in the country. This move marks a significant shift towards cleaner and more sustainable energy practices. Gumede highlighted that Nersa is not only pushing for the adoption of solar power but also encouraging self-generation and the use of diverse sources of power. The organization aims to empower individuals and companies to leverage clean energy solutions that are beneficial for both the environment and their operations. He emphasized that there are no restrictions on self-use of power, as long as the generated electricity is for personal consumption and does not feed back into the grid. One of the key examples discussed during the interview was the case of Goldfields, a mining company that aims to meet 20% of its energy demand through solar power. While solar energy is intermittent and may not fully replace grid power, it serves as a valuable supplementary source of energy. The potential for other miners, companies, households, and institutions to follow suit could lead to a reduction in reliance on traditional power sources, ultimately impacting Eskom's sales and revenue. However, the transition to self-generation poses challenges for Eskom, South Africa's primary electricity provider. Gumede addressed concerns about the stability of Eskom and the need for backup power sources to supplement renewable energy. While solar and wind power play a crucial role in diversifying the energy mix, the intermittency of these sources necessitates reliable backup solutions, such as gas power, which comes at a higher cost. The balancing act of integrating renewable energy with backup power while maintaining affordable electricity prices remains a key consideration. In terms of feedback into the National Grid, Gumede explained that some municipalities offer export tariffs for surplus electricity generated by individuals or companies. These tariffs are often tied to Eskom's pricing structure, incentivizing the sale of excess power back to the grid. However, the pricing dynamics can vary based on peak/off-peak hours and the source of the electricity, creating a complex landscape for potential sellers. Overall, the conversation with Nhlanhla Gumede highlighted the importance of self-generation as a viable solution for meeting energy needs while promoting sustainability. By encouraging the use of solar power and diverse energy sources, Nersa is paving the way for a greener and more resilient energy future in South Africa. The shift towards self-generation may pose challenges in balancing grid stability and affordability, but it also presents opportunities for innovation and reduced reliance on traditional power sources.