Judgment in favour of power utility welcomed

State-owned power utility Eskom in July said it was pleased with the Johannesburg High Court judgment dismissing with costs, the interdict application by green energy supplier G7 Renewable Energies to prevent Eskom from implementing the Interim Grid Capacity Allocation (IGCA) rules.

In passing the judgment, the judge reiterated that new generation capacity is required to alleviate loadshedding and contribute towards energy security in the country.

G7 Renewable Energies applied to the court to interdict Eskom from implementing and giving effect to and enforcing the rules on July 17.

G7 also requested the court direct Eskom to apply the “first-come, first-served approach” for all pending applications for grid allocation.

Eskom restated 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 use capacity, thereby preventing the allocation of the grid to projects that are ready.

Public procurement programmes, including Bid Window 6 of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), were impacted 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.

Eskom implemented these rules from June 27, following a consultative process.

The connection of new generation capacity to the national grid requires sufficient grid connection capacity to enable these projects to come online.

However, in the past few years, uptake of the generation capacity had been restricted owing to the severe grid constraints in Eskom Transmission’s national corridors, specifically in the Northern Cape, Eastern Cape and Western Cape.

The IGCA rules are necessary, given the urgent need for new generation capacity, and as government prepares to launch Bid Window 7 of the REIPPPP.

The second part of the matter, which deals with the rationality and lawfulness of the rules, will be heard on September 11.