South Africa 100MW License Exemption and NERSA Registration Guide

Key Takeaways

• South Africa's regulatory framework exempts systems from full licensing under the Registration Procedure in terms of Schedule 2 of the Electricity Regulation Act, 2006 (Act No. 4 of 2006).
• The exemption applies to the operation of a generation facility with or without energy storage, with a capacity of no more than 100MW with a Point of Connection on the transmission or distribution power system.
• Small installations up to 100kW register with their local distributor (Eskom or licensed municipality), while installations exceeding 100kW must register directly with NERSA.
• Registration requires formal grid provider consent confirming that network capacity exists to integrate the generator safely.
• The statutory application fee is currently set at R200 per generation facility, with a statutory 45-day processing timeline following proof of payment.

Legislative Background and Scope of Schedule 2

The liberalization of South Africa's electricity supply industry gained major momentum with the gazetting of Schedule 2 amendments to the Electricity Regulation Act. The formal administrative framework is governed by the regulatory document titled Registration Procedure in terms of Schedule 2 of the Electricity Regulation Act, 2006 (Act No. 4 of 2006).

Under these provisions, qualifying commercial and industrial generation facilities no longer undergo the prolonged, complex ministerial licensing process previously required for independent power producers. Instead, statutory exemption applies to:

• Capacity Scope: The operation of a generation facility with or without energy storage, with a capacity of no more than 100MW with a Point of Connection on the transmission or distribution power system.
• On-Site & Private Supply: Eligible projects include arrangements where the generation facility is operated to supply electricity to one or more customers and there is no wheeling of that electricity.
• Wheeling Projects: Third-party off-site projects are equally accommodated where the generation facility is operated to supply electricity to one or more customers by wheeling; and the generator has entered into a connection agreement with the holder of the transmission or distribution licence.
• Demonstration Systems: Temporary research installations are permitted where the facility will be in operation for not more than 36 months.

Capacity Thresholds: Distributor vs NERSA Direct Registration

The regulatory architecture establishes clear division between small-scale domestic installations and utility-scale commercial facilities:

• Systems of 100kW or Less: Small-scale embedded generation facilities with an installed capacity of 100kW or less and with a point of connection to the electricity grid are required to register with the relevant distributor, being Eskom or the applicable licensed municipality.
• Systems Exceeding 100kW: In contrast, embedded generation facilities with an installed capacity of more than 100 kW and a point of connection to the grid are required to register directly with NERSA.
• Fully Off-Grid Exemption: Facilities that maintain complete electrical separation from the national grid do not require regulatory registration: embedded generation facilities without a point of connection to the electricity grid are exempt from registration requirements.

NERSA Application Requirements and Turnaround Timelines

Commercial and industrial developers registering embedded generation projects with NERSA must prepare a complete technical portfolio:

• Network Service Provider Consent: The applicant must obtain a consent letter from the licensed network service provider (NSP) with confirmation, among others, that there is network capacity to accommodate the proposed generation facility and that the generator meets the requirements of the NSP.
• Application Acknowledgment: Upon receipt of documentation, the analyst shall acknowledge receipt of the application within five (5) working days.
• Application Fee: To ensure administrative integrity, the registration fee is currently set at R200 per generation facility, invoiced once the initial assessment confirms compliance.
• Decision Timetable: The forty -five (45) days required to process the application will commence from the date of receipt of payment of the registration fee.

Upon approval by the Regulator Executive Committee, NERSA issues a formal Registration Certificate, enabling the generator to finalize connection agreements and commence commercial energy production.