Information Brief

New Embedded Generation Projects Must Not Include Dirty Fuels and Leave the Poor Behind.

14 June 2021 - While groundWork welcomes the President’s announcement on 10th June 2021 that the National Energy Regulator of South Africa (NERSA) licensing threshold for embedded generation projects be increased from 1MW to 100MW, and so exempt them from licensing requirements in order to promote self-generation of power, we remain concerned that:

    1. The embedded generation allowance is not renewable energy exclusive generation, and there is no safeguard against the further development of carbon intensive power plants (including coal, LNG (gas), diesel, methane-based units), which will, if allowed, impact South Africa’s climate commitments and result in the intensification of climate change and the injustice that accompanies it.
    2. There may be no safeguard against an individual company applying for a larger capacity (for example 100MW) of power in ongoing increments of 100MW units.
    3. If permitted, the burning of LNG, diesel or other fossil fuels is considered carbon intensive energy generation that will add to greenhouse gas emissions (GHGs) that are responsible for the acceleration of climate change impacts on vulnerable people.
    4. Clarity must be provided on whether embedded generation will include waste incineration projects (often toxic waste), which are highly problematic for their GHGs, as well as highly toxic carcinogenic air emissions that will have negative impacts on health.
    5. The requirements for grid compliance are unclear at this stage.
    6. While we welcome municipalities having discretion to approve grid connection applications in their networks, based on assessments of the impact on their grids, we are concerned about the transparency of these processes, and opportunities for corruption and bribes.
    7. The inconsistency in tariff charges which may arise across the country, including storage tariffs and new tariffs that may be imposed, will exacerbate high and uneven tariff structures which will impact poor people the hardest.
    8. Wheeling charges and connection fees are uncertain at this stage, although it is expected that these will impact the cost of self-generation.
    9. Capital funding for embedded generation is high; this means it will be afforded more easily by corporates and high- to middle- income earners, which will promote the privatisation of energy and exclude access by 60% of South Africans, i.e. poor people;
    10. High-income groups (including corporates) may leave the grid to generate their own electricity, leaving low-income groups to pay for the grid, thereby creating energy slums, because poor people will not be able to afford high tariffs and the grid will not be utilised or paid for.
    11. Policies that prevent energy from feeding into the grid remain problematic.

The just transition requires that we move away from the unequal society created by the Minerals-Energy Complex, which impoverishes communities and poisons the bodies of those who are forced to live with dirty energy intensive industries located within their neighbourhoods. Communities who have lived with the impacts of fossil fuel energy generation must be included in the government’s plan for a new just energy future and just transition, to ensure that their voices are heard through an open democratic process.

Government must assure society that this 100MW exemption will be applied only in respect of wind and solar energies, and ensure that such endeavours include community involvement. Support for socially-owned renewable energy systems for affected communities must be included in government’s Economic Reconstruction and Recovery Plan, as part of the presidential commitment to a just transition. This must include livelihood and job prospects within the local manufacture of renewable energy components, with opportunities for installation, repair, recycling and maintenance. Communities and workers from the fossil fuels sector must be given new opportunities in a clean energy future that addresses the needs of poor and marginalised people first, before corporates, and that does not leave poor people behind.

You can read the Presidential Announcement here.