A Power Play Unfolds
In a notable win for South Africa’s electricity public utility, Eskom, the company announced on Monday that the Gauteng High Court in Johannesburg had dismissed G7 Renewable Energies’ injunction seeking to halt the implementation of the Interim Grid Capacity Allocation (IGCA) rules.
G7 Renewable Energies had previously filed an injunction request against Eskom, asserting that the IGCA rules were unlawful, irrational, and a potential obstruction to new ventures. The firm also lobbied the court to mandate Eskom to adhere to a “first come, first served” policy for all pending applications for grid allocation.
New Rules, New Goals
The newly minted IGCA rules aim to balance the power (quite literally) between independent power producers (IPPs) under the umbrella of the country’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) and private sector IPPs participating in distributed generation and wheeling.
However, Judge Basheer Vally, in passing the judgement, underscored the need for new generation capacity to combat load shedding and bolster the nation’s energy security.
The IGCA rules went into effect on June 27, after a comprehensive consultative process.
The Argument Against “First Come, First Served”
In defense of the IGCA rules, Eskom argued that allocating grid access on a “first-come, first-served” basis led to the limited grid access being commandeered by projects that weren’t ready to use capacity. It blocked the allocation of the grid to projects that were prepared and ready for action. The power utility stressed that public procurement programs, including Bid Window 6 of the REIPPPP, were adversely affected by this preemptive grid hoarding.
To rectify this, Eskom introduced the “first ready, first served” principle, designed to give capacity to projects based on their readiness to construct the generation facility and associated grid infrastructure required for connection.
A Solution to Gridlock?
Eskom voiced the necessity of these rules in a statement, given the pressing need to connect new generation capacity to the national grid. It also outlined the constraints on the uptake of this generation capacity due to severe grid constraints in the Northern Cape, Eastern Cape, and Western Cape.
“As the government gears up for the launch of Bid Window 7 of the REIPPPP, the IGCA rules are both necessary and significant,” Eskom added.
Sawea Weighs In
The South African Wind Energy Association (Sawea), however, voiced that the ruling would allow the industry to deliver much-needed new generation capacity. It also added that Eskom could grant the required budget quotes in alignment with the IGCA rules.
Although G7 Renewable Energies is a member of Sawea, the association did not support the firm in its injunction.
Sawea stated, “The process to allocate grid access impacts projects differently, but the IGCA rules will enable the swift deployment of new generation. In line with the ruling, Sawea has reaffirmed its commitment to working with all stakeholders to accelerate the connection of shovel-ready projects to alleviate the energy crisis.”
The second part of the case, which focuses on the rationality and lawfulness of the rules, is set for a hearing on September 11.