The battle for grid access in South Africa, a contentious issue between renewable energy company G7 and the state-owned utility Eskom, has come to a halt as Eskom has made significant revisions to its grid access rules. G7, which had initially filed an application to challenge Eskom’s grid access regulations, decided to withdraw its legal action following these key changes aimed at making the rules more accommodating.
Eskom’s willingness to reconsider its stance on grid access rules can be attributed to the intervention of the National Energy Crisis Committee (Necom) within the Presidency. Necom, a collaborative body involving both business and government representatives, has been actively working to resolve regulatory hurdles hindering the expansion of new energy capacity. The success of Necom in mediating talks between Eskom and renewable energy industry associations underscores the importance of multi-stakeholder cooperation in addressing critical energy challenges. At stake was the potential delay in allocating grid access to new energy projects, which could have exacerbated the ongoing energy crisis.
In an official statement released on Thursday, G7 announced the resolution of the dispute, stating:
“The parties have reached an amicable resolution of the dispute. These negotiations have led to modifications in the implementation of the Interim Grid Capacity Allocation Rules and have provided much-needed clarity to the process. Consequently, the High Court review application has been withdrawn, with each party responsible for its own legal expenses.”
The dispute initially arose when Eskom altered its grid access rules in June, shifting from a “first come, first served” approach to a “first ready, first served” model. This change was made to address concerns about certain projects securing grid access but failing to advance promptly or at all, effectively monopolizing grid capacity. The revised rules established a set of criteria for projects to meet before being considered “ready” for grid access.
However, many industry stakeholders found these new provisions burdensome, prompting ongoing discussions between Necom, industry representatives, and Eskom. Before these talks could conclude, G7 pursued legal action, adding further complexity to the situation.
Mark Tanton, the business lead for Necom on transmission, highlighted Eskom’s constructive engagement with the industry for the greater good of the nation:
“The engagement was constructive, resulting in an outcome that satisfied the objectives of both the industry and Eskom last month. While we welcome the withdrawal of G7’s legal challenge, it’s crucial to emphasize that Eskom’s positive approach stemmed from its commitment to finding common ground, irrespective of the legal challenge. Our experience shows that Eskom pragmatically collaborated with the industry to benefit the country.”
Velaphi Ntuli, Eskom’s general manager for Operations Enablement, detailed the changes made to the grid access rules. Five adjustments have been implemented, with a sixth still under discussion. These revisions include relaxing requirements for a water use license and civil aviation authority approval, with applicants now only needing to demonstrate that they have applied for these permits. Additionally, regulations concerning land use permissions for project construction have been eased, allowing applicants to secure access even if they have not yet obtained permission for non-agricultural land use. However, priority will be given to projects with pre-existing sub-division permissions.
Furthermore, Eskom has reduced the demand for measured data, requiring only one year’s worth of measured data for wind farm sites and one year for wind energy projects. For solar PV projects, satellite data from reputable sources is now accepted. The sixth change pertaining to performance bond requirements for bidders remains under negotiation, according to Ntuli.
