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Connect your alternate energy to the electricity network – legally and safely
New energy technology solutions in South Africa provide customers the opportunity to redefine their role in the electricity value chain. These solutions include the installation of renewable generators to generate their own electricity.
Investing in a generator involves a significant financial commitment and therefore requires careful consideration of the following key aspects:
- Compliance to legal and regulatory requirements.
- Compliance to the SAGC (South African Grid Code).
- Ensuring the safety of people, assets/ buildings, animals, and equipment.
National Energy Regulator (NERSA) Compliance Requirements to register, or be exempted from registration or licensing
You will be required to comply with the requirements set out in Schedule 2 Gazette No. 43151 of the Electricity Regulation Act (ERA) regarding licensing, registration or to be exempt from registration, for your generation facility. A generation facility means the generation (or distribution facility as applicable) located on our property and comprising all plant, machinery and equipment, all associated buildings, and structures (Generator).
Guidelines as per National Energy Regulator of South Africa (NERSA)
Generator exempted from registration
Under Schedule 2 of the ERA, the following activities are exempted from the requirement to be licensed or registered with NERSA:
The operation of a generator for the sole purpose of providing standby or backup electricity in the event of an outage, for a duration no longer than the electricity supply interruption.
The operation of any generator provided that, irrespective of capacity (MW), the generator does not have a point of connection; if the generator has a capacity of no more than 100kW and has an existing point of connection, the Utility must keep a register of such facilities and have prescribed the conditions relating to the continued use of the point of connection.
Explanation
This means that if you have a generator as listed below, it is exempt from requiring licensing or registration with NERSA:
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- if you are not connected to the grid, and use your generator for standby purposes (i.e. own use) only, or
- if your generator of no more than 100kW is connected to the grid and the electricity is for your own use only (not supplying other customers). However, because your generator is connected to the grid, you will have to apply for a grid connection, pay the quoted fees and sign the required Utility agreements. The Utility will also keep a register of all of these systems.
Generators requiring registration
Schedule 2 of the ERA states the following generators must be registered with NERSA:
- The operation of a generator with a capacity of 100kW to 100MW and a point of connection on the distribution power system, in circumstances in which:
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- the generator supplies electricity to a customer or related customer(s) with or without wheeling of that electricity; and the generator complies with the Grid Code(s) and has entered into a connection agreement with the holder of the distribution licence in respect of the power system over which the electricity is to be wheeled.
- The operation of a generator for demonstration purposes only (not longer than 36 months).
- The operation of a generator where the electricity is produced from waste or the residual product of an underlying industrial process.
- The continued operation of an existing generator which, immediately prior to the date of commencement of this Schedule, was exempt from the requirement to apply for and hold a licence under the Act.
Explanation
This means that any generator of 100MW or less, which is grid-tied (whether exporting energy into the grid or not) and supplying a customer or related customer(s) (even 100kW and below), will have to be registered with NERSA.
NERSA will require information from the Utility to ensure that a grid connection is possible, and there will need to be an application by the customer to be grid-tied, the quoted fees to be paid and the required agreements to be signed.
Generator requiring registration
Any generator:
- Above 100kW
- Supplying more than one non-related party, irrespective of size, will require registration.
- Exceptions: A generator above 100kW used for demonstration purposes for no longer than 36 months
- A generator producing electricity from waste heat.
Generator network configurations
Carefully consider what generator configuration to install, as this influences the legal, regulatory, and technology standards, tariffs, and metering equipment requirements. The following Utility configurations are available:
An off-grid system
An off-grid system is one where there is no electrical tie that links the generator with the Utility grid. The generator is therefore not grid-tied (not electrically connected to the Utility grid) and does not need a Utility supply to work. This type of installation does not require authorisation from the Utility and this installation does not need to be registered with NERSA.
A standby generator
A standby generator configuration may or may not be grid-tied. For a grid-tied standby generator, an application will be required to be made to the Utility to authorise the generator.
A generator that is not grid-tied (not electrically connected to the Utility grid) and does not need a Utility supply to work, does not require authorisation from Eskom.
In both cases, the standby generator does not need to be registered with NERSA, subject to it only being used for periods of electricity supply interruptions.
Installations designed to consume all the power generated (non-export)
This generator configuration is one that is electrically connected to the Utility grid (is grid-tied) and provides electricity to the customer’s property when required and is designed such that no energy is exported into the Utility grid.
As the generator configuration is grid-tied, even if there is no export of energy into the Utility grid, it requires Utility authorisation. Depending on the criteria set out in Schedule 2, the generator will either be exempted from registration, or require registration or licensing.
Utility authorisation includes an application, payment of fees and signing of new contracts covering the tariff, legal, regulatory and technical requirements.
The Utility connection and use-of-system agreement will specify a maximum export capacity (MEC) of zero kW. No tariff charges will be applicable, but there may be costs related to the connection to the grid. Any export will constitute a breach of the agreement concluded with the Utility and the supply may be disconnected.
Installations designed to export power into the grid
In this configuration, not all the electricity is used at the installation and some or all of it is exported into the grid for the purposes of getting an energy offset credit on the account or for wheeling the energy to another customer so that they can get an energy offset credit on their account.
This type of generator connection requires Utility authorisation and, depending on the criteria set out in Schedule 2, will either be exempted from registration, or require registration or licensing.
Utility authorisation includes application, payment of fees and signing of new contracts covering the tariff, legal, regulatory and technical requirements. The Utility connection and use-of-system agreement will specify a maximum energy export capacity in the Utility grid as determined by the customer. Tariff charges may be applicable for the exported energy, and there may be costs related to connection to the grid.
Requirements to legally and safely connect a generator to the grid
In order to get permission to be connected (be authorised by the Utility), you will be required to apply for a grid connection, pay the required fees and sign a connection and use-of-system agreement. The grid connection must be technically possible and must be in compliance with Schedule 2 of the ERA, various Grid Code(s), Utility technical standards and the SABS national standards (SANS), which also govern the safe grid connection. Generator connections must comply with the most recent editions of the documents listed on Eskom’s website.
As part of the Utility technical requirements, a professionally registered competent person will complete the ‘embedded generation installation (EGI) compliance test report’, which forms part of the customer’s connection and use-of-system agreement. A copy of this report can be found on the Utility website. The connection and use-of-system agreement will be updated with the publication and commercial implementation of SANS 10142- 1-2:201X by the SABS, covering the wiring of premises, with the specific requirements for embedded generation installations connected to the low voltage distribution network in South Africa
The Utility has a legal responsibility to ensure the safety of the network, field staff and the public at large, and it is for this reason that the technical requirements must be complied with.
Tariff options
The Utility has a selection of tariffs that are applicable depending on the installation.
Grid-tied generation, with no exported power into the grid
- Customers must be on a time-of-use (TOU) tariff or convert to the relevant TOU tariff when installing embedded generation.
- Utility tariffs applicable are Megaflex and Miniflex (Urban or>22kV connection), Ruraflex (Rural) or Homeflex4.
These tariffs charge for consumption using different charges for different TOU periods. Where a change of tariff is required, a new supply agreement will be needed in addition to a connection and use-of-system for the generator connection.
Grid-tied generation with exported energy
- Customers must be on a time-of-use (TOU) tariff or convert to the relevant TOU tariff when installing embedded generation.
- Utility tariffs for consumption are Megaflex and Miniflex (Urban or >22kV connection), Ruraflex (Rural) or Homeflex4 (these tariffs charge for consumption using different charges for different TOU periods).
- Tariffs for generator export are Gen DUoS, Megaflex Gen or Ruraflex Gen.
Where a change of tariff is required, a new supply agreement will be needed in addition to a connection and use-of-system agreement for the generator connection.
Compensation for energy exported into the grid
- If there is exported energy into the grid and this energy is not wheeled to another Utility customer, then the Utility will compensate (credit) the customer for this energy at the Gen-offset tariff. An amendment to the electricity supply agreement is required to provide this offset credit.
- If there is exported energy into the grid and this energy is wheeled to another Utility customer or point of delivery (the off-taker).
Note that wheeling is not available for customer-connected generators connected at low voltage.
All of the above are subject to either exemption from registration, registration or licensing as the case may be, by NERSA.
All of the above are billed on a monthly basis.
The Utility, subject to the Utility Energy Banking policy, may also allow banking (carry-over of energy produced but not consumed to the next month) by the user/buyer of the energy when there is an offset or wheeling transaction.
Energy may be exported to a related or not related Third Party. This arrangement is also called ‘wheeling’. Utility will credit the off-taker of the energy for non-Utility energy at the Gen-wheeling tariff rates. An amendment to the electricity supply agreement is required to provide this wheeled credit.
For customers on a prepaid supply
Eskom’s prepaid meters and metering system are not currently able to do time-of-use and export energy. Customers with prepayment meters will therefore have to convert to billed metering with the appropriate TOU tariff.
Cost to be grid-tied
Before an installation can connect, an application must be made to the Utility. Standard application forms are available and they must be completed. The Utility will then issue a quote, providing the connection charges to be paid.
The connection charge will typically cover
- A quotation fee.
- Metering changes.
- Any network upgrades that may be required.
The quote must be accepted, the charges paid and the relevant agreements must be signed, before the Utility will initiate any work to authorise the connection.
Agreements to be signed
The following agreements may be required:
- A new electricity supply agreement if the existing agreement is old or if there is a tariff conversion or changes to the supply.
- Amendments to the electricity supply agreement to enable offset or wheeling or energy banking.
- A connection and use-of-system agreement setting out the conditions and obligations for the generator connection.
Metering requirements
For all installations, the Utility will install bi-directional 4-quadrant meters that measure the electricity used and exported energy separately in half-hourly intervals.
Meters are not allowed to turn backwards (reverse). Meters found to be reversing will constitute an illegal installation and will be dealt with as such. Meter replacement costs may be given with the quotation.
llegal generator connections
The Utility requires that the customer’s unauthorised grid-tied generator be disconnected and isolated from the grid to avoid supply disconnection. The disconnection is to ensure that the safety of staff and people in general at the Utility point of supply is not compromised.
Unauthorised grid-tied generators, which are operational, can endanger the lives of the Metro/Municipal and Utility operating staff and the public, and can compromise the quality of electricity supply.
If any incident occurs, whether it involves loss of life, physical harm or damage to any equipment, the owner of the unauthorised grid-tied generator will be financially and legally liable for all damages incurred or for the loss of life. Grid-tied generators that have not been given permission for a grid-tie are also a breach of legislation and of Eskom’s supply agreement.
Once the connection has been found to be unauthorised, the owner of the generator will receive a letter stating that the connection is illegal. The utility reserves the right to disconnect the supply immediately if remedial action is not taken. Utility has to disconnect any unsafe installations found. Failure to comply will result in reconnection fee charges together with the disconnection of the main supply. The utility will also raise charges to recover lost revenue, the associated costs incurred for meter replacement (i.e. bi-directional meter) or meter reprogramming, and these charges will be recovered from the customer.
Moreover, failure to follow the prescribed application and registration process constitutes a statutory offense and the Utility will consider the entire installation to be unauthorised and request that the generator be disconnected until the process has been completed.
