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Electricity Regulation Act, 2006 (Act No. 4 of 2006)


Electricity Regulations on New Generation Capacity, 2011

5. Feasibility studies


(1) Having regard to the need for new generation capacity as provided for in the integrated resource plan, the Minister may undertake or commission the buyer or another party to undertake feasibility studies in respect of such new generation capacity requirement.


(2) The following shall form part of the considerations and outcomes for a feasibility study undertaken pursuant to a decision in terms of sub-regulation (1)—
(a) the anticipated cost of the proposed new generation capacity;
(b) the proposed allocation of financial, technical and operational risk between the prospective buyer and the seller, and between the seller and the NTC or the distributor, as the case may be;

[Subregulation 5(2)(b) substituted by regulation 5(a) of Notice No. R. 1366 of 2016]

(c) the demonstration of the anticipated value for money to be achieved through the new generation capacity project;
(d) the material legal, financial and technical requirements including consents that will be required in order to procure the new generation capacity; and
(e) whether the appropriate seller should be Eskom as part of its services as the national electricity producer, another organ of state or an IPP.

[Subregulation 5(2)(e) substituted by regulation 5(b) of Notice No. R. 1366 of 2016]


(3) A municipality, as an organ of state, may apply to the Minister to procure or buy new generation capacity in accordance with the Integrated Resource Plan, and such municipality must—
(a) conduct and submit a feasibility study as contemplated in sub-regulation (2), where it intends to deliver the new generation capacity project through an internal mechanism as contemplated in section 76(a) of the Municipal Systems Act;
(b) submit proof that it has complied with the provisions of section 120 of the Municipal Finance Management Act and the Municipal Public-Private Partnership Regulations published by Government Notice No R. 309 in Government Gazette No. 27431 of 1 April 2005, where it intends to deliver the new generation capacity project through an external mechanism as contemplated in section 76 (b) of the Municipal Systems Act; and
(c) submit proof that the application is aligned with its Integrated Development Plan.

[Subregulation 5(3) inserted by section 4 of Notice No. 1093, GG43810, dated 16 October 2020]