Eskom has welcomed the court judgment dismissing the application by G7 Renewable Energies to interdict the implementation of Interim Grid Capacity Allocation (IGCA) rules.
The Gauteng High Court, Johannesburg, on Monday dismissed with costs the application by G7 Renewable Energies to interdict Eskom from implementing the IGCA rules.
Earlier this month, G7 Renewable Energies applied to the court to interdict Eskom from implementing and giving effect to and enforcing the rules, saying that they were unlawful, unreasonable and irrational, and that they will hinder new operations.
G7 also requested the court to direct Eskom to apply the “first come, first served approach” for all pending applications for grid allocation.
The new IGCA rules are aimed at levelling the playing fields between independent power producer (IPP) projects participating in the country’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) and private sector IPP projects participating in distributed generation which includes wheeling.
However, in passing the judgment, Judge Basheer Vally reiterated that new generation capacity was required to alleviate load shedding and contribute towards the energy security in the country.
The second part of the matter, which deals with the rationality and lawfulness of the rules, will be heard on September 11.
Eskom had argued that the allocation of the grid on the first-come, first served basis resulted in the limited grid access being allocated to projects that were not ready to utilise capacity.
It said this prevented the allocation of the grid to projects that were ready.
The power utility restated that public procurement programmes, including Bid Window 6 of the REIPPPP, were affected by the hogging of the grid by projects that were not ready.
To this effect, Eskom introduced the principle of “first ready, first served”, which will enable allocation of capacity to projects based on a demonstrated readiness of the project to build the generation facility and related grid infrastructure to connect to the grid.
These rules were implemented from June 27, following a consultative process.
In a statement, Eskom said the connection of new generation capacity to the national grid required sufficient grid connection capacity to enable these projects to come online.
However, it said uptake of the generation capacity was restricted due to the severe grid constraints in transmission’s national corridors specifically in the Northern Cape, Eastern Cape, and Western Cape in the past few years.
“The IGCA rules are necessary, given the urgent need for the connection of new generation capacity to the national grid. They are also important as the government prepares to launch Bid Window 7 of the REIPPPP,” Eskom said.
Meanwhile, the South African Wind Energy Association (Sawea) said the ruling will enable the industry to deliver much-needed new generation capacity, as Eskom was able to grant the required budget quotes in line with the IGCA rules.
G7 Renewable Energies is a member of Sawea, but the association was not supporting the company in its interdict.
Sawea said the process to allocate grid access affected projects differently, however, and that the IGCA rules will allow the urgent deployment of new generation.
“As such, and in line with the ruling, Sawea has reaffirmed its commitment to working with all key stakeholders to accelerate the connection of shovel-ready projects with a view to alleviating the energy crisis,” it said.
“Sawea encourages progressive industry discussions with the system operator regarding the optimisation of the grid, including the allocation of grid capacity, in line with the industry’s objective to develop a favourable regulatory environment for the rollout of renewable energy.”
BUSINESS REPORT