National Energy Regulator of South Africa NERSA National Energy Regulator of South Africa Seminar at SA Energy Storage, SSEG, Micro-Grid and Smart Grid 2018 Conference and Exhibition Presenter: Dennis Seemela

INTRODUCTION The National Energy Regulator (NERSA) was established on 1 October 2005 in terms of the National Energy Regulator Act, 2004 (Act No. 40 of 2004) to regulate: Electricity industry (Electricity Regulation Act, 2006 (Act No. 4 of 2006)) Piped-Gas industry (Gas Act, 2001 (Act No. 48 of 2001))` Petroleum Pipelines industry (Petroleum Pipelines Act, 2003 (Act No. 60 of 2003)) NERSA is a public entity as per the Public Finance Management Act, 1999 (Act No. 1 of 1999) and therefore has to comply with the requirements of this Act.

EVIRONMENT-LEGAL MANDATE PARLIAMENT/GOVERNMENT POLICY LAW REGULATIONS RULES GOVERNANCE PARLIAMENT/GOVERNMENT DEPARTMENT OF ENERGY NERSA

OBJECTS OF THE ACT To achieve efficient, effective, sustainable & orderly development of the ESI in SA To safeguard & meet the interests & requirements of present and future electricity customers & end users To facilitate investments & universal access to electricity To promote the use of diverse energy sources, energy efficiency, competitiveness & customer choice To facilitate a fair balance between the interests of customers, licensees, investors & the public

BACKGROUND On 22 September 2011 the Energy Regulator approved Standard Conditions for SSEG’s within municipalities (<100kW) Municipalities must register and maintain a database of SSEG’s (<100kW) and report to NERSA annually On 25 February 2015 NERSA published a Consultation Paper on Regulatory Rules on SSEG’s On 10 April 2015 NERSA conducted public hearing on the Regulatory Rules The Regulatory Rules could not be published because of lack of Regulation and threshold

(OLD) SCHEDULE 2 OF THE ACT: EXEMPTION FROM OBLIGATION TO APPLY FOR AND HOLD A LICENCE Any generation plant constructed and operated for demonstration purposes only and not connected to an inter-connected power supply Any generation plant constructed and operated for own use Non-grid connected supply of electricity except for commercial use

LICENSING EXEMPTION AND REGISTRATION NOTICE NO. 1231 The Notice substitutes the Schedule II of the Act: Exemption from obligation to apply for and hold a licence The Notice clearly defines threshold for registration and licensing except for co-generation Excludes any generation plant with installed capacity of more than 1MW (except co-gen) Any generation plant with outside the Notice must be licensed Include resale of electricity

LICENSING EXEMPTION AND REGISTRATION NOTICE NO. 1231 (cont.) The Notice requires registration for the following generation facilities of no more than 1 MW: Connected to the grid in circumstances specified in the Notice Not connected to the grid in circumstances specified in the Notice For own use in circumstances specified in the Notice For demonstration purposes in circumstances specified in the Notice Co-generation in circumstances specified in the Notice

LICENSING EXEMPTION AND REGISTRATION NOTICE NO. 1231 (cont.) Back-up generation and standby generation for provision of electricity during electricity supply interruptions The continued operation of an existing generation facility which was exempt from the requirement to apply for and hold a licence under the Act The continued operation of an existing generation facilities that were in operation prior to the Notice being issued which have declared non-compliance and agreed with NERSA on the timeframe to comply Distribution connection facility that is connected to a generation facility in circumstances specified in the Notice

IMPLEMENATION OF THE NOTICE Consultation Paper on the Rules for registered activities including a procedure, form and registration fee as per Section 35(3)(h) of the Act After input received during the consultation process, the Rules including a procedure, form and registration fee will be finalized and published on the NERSA website An application for registration must be accompanied by the prescribed registration fee

IMPLEMENATION OF THE NOTICE (cont.) NERSA approved a Consultation Paper on Regulatory Rules for SSEG’s on 24 April 2018 NERSA subsequently withdrew the Consultation Paper on 15 June 2018 because of the processes that DOE was undertaking NERSA received a lot of applications for registration as early as February 2018 The Energy Regulator will consider the Registration Procedure, Form and Registration Certificate on 30 October 2018

APPLICATION INFORMATION Municipal area wherein the SSEG will be operating Licensed Network Service Provider (NSP) Location and Geographical GPS coordinates of SSEG Description, activities and technology of the SSEG Connection and Use-of-System and/or wheeling Agreements  Connection Voltage Level (kV)  Installed capacity of the SSEG (MW / MWp)  Commercial Operation Date (COD)  Expected Annual Energy Production (MWh)

REGISTRATION PROCESS PHASE I: NSP Approval Process Applicant Applies for Connection and Use of System (UOS) to the NSP NSP Evaluates and process application for grid stability and any liabilities Approves Connection and UOS agreements & issues budget quote Send confirmation letter for connection eligibility to the grid PHASE I: NSP Approval Process Applies for Registration to NERSA once approval is obtained from Licensed Distributor NERSA Receives application and acknowledges in 3 days Check completeness and adequacy in 14 days Prepare submission to Energy Regulator within 60 days PHASE II: NERSA Approval Process Enters applicant into database, issues Registration Certificate with a number and send letter of registration confirmation to applicant within 14 days

CONDITIONS FOR REGISTRATION The Regulator may refuse to register such a person or activity: If the application is not made within the prescribed period or If the application is not made with the prescribed registration fee and If the application is contrary to the objectives of the Act

COMPLIANCE MONITORING & DISPUTE RESOLUTION With each and every registered facility NERSA imposes registration conditions which should be complied with NERSA must ensure and monitor conformance to regulatory requirements The Registrant must consent to inspection at all reasonable times to be conducted by NERSA or authorised persons On completion of an audit the Energy Regulator may act on such a report and/or its findings in accordance with the provisions of the Act NERSA may act as mediator if so requested by both the Registrant and the NSP to settle dispute(s) Alternatively NERSA may appoint a suitable person to act on its behalf in an attempt to settle dispute(s)

THANK YOU Website: www.nersa.org.za Tel: 012- 401 4600 Fax: 012- 401 4700 Email: info@nersa.org.za Kulawula House 526 Madiba Street Arcadia 0007