Online marketplace giant Amazon launched its first solar power plant in South Africa in the Northern Cape Province in 2021¹. The electricity generated here is used to power amongst others the Amazon Webs Services data centers in Cape Town. The plant can produce up to 28 000 MWh energy per annum. But this is just a drop in the ocean of their bigger worldwide portfolio of renewable energy projects. Amazon is aiming to power all their facilities through renewable energy by 2025 and be net-zero carbon by 2040². It is reported that Amazon has 274 renewable energy projects around the world³ totaling 12 GW. These projects include wind and solar farms.

The biggest solar project in South Africa and sub-Sahara Africa though, is the De Aar solar plant, also in the Northern Cape⁴. The combined installed capacity of the two phased project is just over 175 MW⁵. The biggest solar project in the world, according to 2020 data, is the Bhadla Solar Park in Rajasthan, India. This massive 14 000-acre project has a 2 245 MW capacity⁶.

But you don’t have to live in an arid or semi-arid climate to launch a project of this size. A Swiss company has established the world’s highest floating solar farm 1800 meters above sea level on the Lake of Toules dam in the Swiss Alps⁷. The reflection of sunlight off the snow and ice allows the plant to produce as much solar radiation as in the desert and the project currently produces 800 000 KWh energy per annum with plans in the pipeline to expand the project.

PV or CSP?

Let’s first take a step back and look at the two different technologies used to generate solar power (without getting too technical!): concentrated solar power (“CSP”) and photovoltaic (“PV”). CSP uses reflectors to concentrate the sun’s energy which is used to drive a heat engine and drive an electric generator. This generates an alternating current (“AC”) that can be distributed on the power network.

On the other hand, the cells in PV solar panels absorb sunlight converting it into a direct current (“DC”). The DC is fed into an inverter that turns the DC into AC that can be fed into the power grid⁸. The advantage CSP systems have over PV systems is that it can store the sun’s heat which can then be used during cloudy days or at night. The Redstone CSP plant currently under construction near Postmasburg will for example come with a twelve-hour thermal storage system⁹.

According to the International Energy Agency solar PV generation increased worldwide by 23% in 2020 from 2019, showing the second largest growth in renewable energy generation¹⁰. This represents an additional 156TWh. The biggest growth was shown by wind, with onshore wind generation growing by 11% and offshore wind generation growing by 29% in 2020¹¹. The growth was mainly driven by developers wanting to take advantage of support schemes in China, the United States of America and Vietnam before the respective expiry dates.

A mere 200 MW of CSP generation was added, representing a 66% decrease from 2019. All the additional capacity was commissioned in China¹². China, Morocco, and South Africa have been responsible for the bulk of capacity additions in the past five years. The Xina Solar One near Pofadder and the Kathu Solar Park are two of the major CSP plants in South Africa, each with a capacity of 100MW¹³.

But what does this mean for individuals and small businesses looking to mitigate their exposure to loadshedding, power cuts and ever-increasing electricity prices?

Licensing and registration¹⁴

In South Africa the licensing and registration of electricity generation, transmission, distribution, etc. is regulated by the Electricity Regulation Act 4 of 2006 (“ERA” or “the Act”).

ERA defines “generation” as the production of electricity by any means¹⁵ and according to Section 8 of the Act nobody is allowed to generate electricity without being licensed to do so by the National Energy Regulator of South Africa (“NERSA”). Schedule 2 to the Act creates certain exceptions to this general rule:

1. “Any generation plant constructed and operated for demonstration purposes only and not connected to an interconnected power supply
2. Any generation plant constructed and operated for own use
3. Non-grid connected supply of electricity except for commercial use”

Over and above these exclusions, the Minister of Minerals and Energy (“the Minister”) in consultation with NERSA and the advisory forum¹⁶ can determine that other activities be exempted from Section 8. In short, the latest notice published in this regard amends Schedule 2 as follows¹⁷ :

1. A generation facility with or without storage, that provides standby or back-up electricity in case of electricity supply interruptions.
2.  A generation facility with or without storage and irrespective of the capacity if the facility doesn’t have a point of connection¹⁸.
3. A facility with a capacity of less than 100 kW and complies with certain requirements¹⁹.
   None of these activities requires licensing or registration with NERSA.

According to Section 10 of ERA the Minister can also determine that some activities that are not required to be licensed, must be registered. In general, generation facilities with a capacity of more than 100kW but not more than 100MW, and meet the qualifying criteria, are required to be registered with NERSA²⁰.

In addition, your local municipality may also require you to register your solar panel (or so-called small-scale embedded generator) with them²¹. This requirement, if applicable, should be checked with your local municipality.

Conclusion