Eskom’s newly released Interim Grid Capacity Allocation Rules (IGCAR), formulated in response to surging demand for grid access in a context of acute grid scarcity, have received a cool reception from industry, with some of the conditions included in the new framework being viewed as “onerous”.

GM for operations enablement Velaphi Ntuli says the IGCAR, which have been developed and canvassed over the past six months, have been designed to ensure that shovel-ready generation projects are given priority.

The rules, thus, replace the ‘first come, first served’ framework that has hitherto prevailed with a ‘first ready, first served’ approach.

He reports that the rules are also designed to level the playing field between projects participating in public procurement processes and those being pursued in line with a recent reform allowing private distributed generation projects, including those that wheel electricity through the grid, to proceed without a licence.

The absence of a grid queuing system came to the fore during the sixth bid window of the country’s public renewables procurement programme when none of the 23 onshore wind projects that bid for a 3 200 MW allocation were selected as preferred bids, owing to claims of grid over-subscription in the Western, Eastern and Northern Cape provinces.

Ntuli reports that Eskom is working with the Independent Power Producers Office to finalise the status of projects that have been procured under various public programmes and are, thus, continuing to take up a grid allocation, but which have failed to reach financial close.

Engineering manager Seetsele Seetswana says the new rules retain the principle of non-discriminatory and open access, but reports that Eskom has reserved the right to set aside allocations for future public procurement programmes to avoid a repeat of the failure of bid window six.

To facilitate a shift to the ‘first ready, first served’ principle, Eskom outlined the criteria it would apply to assess the ‘state of readiness’ of a project, including:

the securing of all environmental and water-use authorisations;

power purchase agreement heads of terms signed between the independent power producer (IPP) and the end-user;

confirmation of the appointment of Eskom-approved design consultants for self-build connections;

measured data for solar for a period of a year and for two years for wind; and

the payment of a Grid Capacity Allocation Guarantee issued by an Eskom-approved financial institution.

Only once these conditions have been met will Eskom issue a budget quote (BQ) for grid connection, while still reserving the right to revoke such a quote should there be a failure on the part of the IPP to meet any of the milestones outlined in the BQ.

Following a pause of seven months, Eskom will also begin processing BQs again under the new rules, starting with the backlog of applications that has accumulated.

Eskom’s Nonhlanhla Miya reports that the processing of the 40 outstanding applications in the Eastern, Northern and Western Cape provinces would be processed as from the end of June and that the outcome of that process will be communicated by the end of July.

The projects have a combined capacity of some 5 GW and those that are approved should secure BQs soon after having paid their guarantees, while those that fail to meet the IGCAR criteria will receive BQ refunds.

South African Independent Power Producers Association (SAIPPA) chairperson Brian Day has described the new rules as “dysfunctional”, noting that they require grid connection to be done right at the end, and in terms of resource definition are more onerous than what is expected from a bank that might be funding up to 80% of an IPP project.

“It's not rational.

“The amount of work on the side of the IPP or developer is now enormous, long before grid connection is known to be possible.

“The amount of money they've got to spend on technical preparations and on lawyers is enormous,” Day asserts.

He notes that al...