Tuesday, 19 October 2021

News — Regulation of self-generation of electricity in Eswatini - What every small-scale generator should know

Regulation of self-generation of electricity in Eswatini - What every small-scale generator should know
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Eswatini is undergoing a profound shift in the electricity sector as Emaswati increasingly turn to their on-site generation of power to meet at least some of their electricity needs.  This shift contributes immensely to the increase of local electricity generation and goes a long way in meeting the country’s electricity demand. Recent years have shown how much electricity has become one of the most sought for sources of energy in the country, which consistently emphasized the need for increased capacity to meet an increasing demand for a sustainable and reliable supply.  The increased need for electricity inspired the country to put structures in place that will ensure a sustainable electricity supply for the nation.  As part of this strategy, the Eswatini government adopted the Electricity Act of 2007 which introduced the importance of regulating the country’s electricity supply industry. Following this initiative, the Electricity Licensing By-Laws were then introduced as a guideline for both the regulator and industry players.  In this article, we discuss the regulation of self-generation of electricity in Eswatini.

Section 3, subsection 3 of the Electricity Act, 2007, provides that “Any person who wishes to erect and establish any works;

(a) which will be rated at the site where it is to be installed at a capacity of one hundred or more kilowatts, for generating, transmitting, transforming, con-verting or distributing electricity; or

(b) the plant of which is rated at the site where it is installed at a capacity of less than one hundred kilowatts and which is used for the generation, transmission, distribution, or supply of electricity for the use of any other person, whether or not it is for the operators own use,

shall do so in accordance with regulations made under this Act, and shall comply with any requirement of the Minister or the Authority for the purpose of facilitating co-ordination with existing or future electricity undertakings.

Furthermore, Section 9 of the Electricity Licensing Bylaws states that a generator who generates electricity with a plant of 100 kilowatt (kW) or more exclusively for own use shall apply for an exemption to hold a license. This therefore means if the generation for own use produces electricity that is 100 kilowatt or above, this generator now needs to apply for an exemption to hold a license.

This exemption relieves the generator from the obligations of a generation license. It is crucial for Emaswati to understand these dynamics as they directly affect their activities related to self-generation of electricity, whether the person is contemplating self-generation or running a generation plant for self-consumption. Let’s look further into the dynamics involved in the exemption processes.

The applicant produces the required documents that specify the required information, including the size of the plant and its location.  The applicant must also pay the application fee of Ten Thousand Emalangeni.  Thereafter, the Regulator will consider the application and respond to the applicant within 120 days.  It is crucial to emphasize that the exemption holder is exempted from certain license responsibilities such as paying license fees amounting up to 1 percent of the project’s revenue annually to the Regulator. 

It is crucial to highlight that the Act specifies that should an electricity generator produce 100kW or more without an exemption, they shall be considered an offender and shall be liable on conviction to a fine payable to the Authority of not less than 50,000 Emalangeni, or imprisonment for a period not exceeding twenty-four months or both.

Regulation of self-generation of electricity in Eswatini - What every small-scale generator should know
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Entities or individuals involved or intending to engage in the selling of electricity whether above or below the 100kW system capacity threshold are expected consult with the Regulator and obtain the necessary approvals prior to engaging in this activity, as stated in the Electricity Act.  The Regulator has the role to ensure that all such power generation activities within the Eswatini are known by the Regulator to allow for better co-ordination with existing or future electricity undertakings. Furthermore, as self-generators of capacities below or above 100kW register their facilities, the Regulator will have the necessary information needed in the process of coordinating the local electricity supply industry.  In particular, the Regulator will know how much electricity is produced in the country versus how much electricity is needed by the country. 

All entities and/or individuals in Eswatini with installed electricity facilities with capacities of 100kW and above without the applicable approvals or permits from the national Energy Regulator are reminded to apply for these if such applications have not been made. 

Regulation of self-generation of electricity in Eswatini - What every small-scale generator should know
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