Eskom and renewable energy developer G7 yesterday sparred in the Gauteng High Court (Johannesburg) in a case with high financial stakes for both the company and the country, which urgently needs new energy capacity added to the grid.

At issue are Eskom's grid access rules, which determine the queueing process for independent power producers (IPPs) that plan to build projects and want to connect to Eskom's transmission grid.

Until 27 June, Eskom used a first come, first serve system. However, News24 reports that it has changed these rules to a ‘first come, first ready’ formula which required IPPs to prove that their project was shovel-ready before being granted grid access.

The change was because Eskom believed that ‘grid hogs’ with immature projects had speculatively snapped up the grid without being ready to build, blocking other developers from proceeding. 

The constrained grid has become a major obstacle to new energy projects.

Eskom intends to allocate grid access to a raft of new projects on Monday. G7 has applied for an urgent interdict.

In part B of its application, it wants the new rules set aside and the old ones reinstated.

If the interdict is granted, analysts feel that new energy projects by private developers will be frozen, and urgently needed new capacity will be delayed by several months.

G7 has incurred R55m in costs to develop two wind farms which are now at risk of not going ahead.

Its application rests on the argument that Eskom did not have the authority to change the grid-access rules, which it says can only be done by the National Energy Regulator of SA (Nersa).

Advocate Rafik Bhana warned that if Eskom goes ahead with its plan to grant many applications on 31 July under the new rules, it will surely face a series of court challenges.

‘Under the Electricity Regulation Act (ERA), it is Nersa's exclusive power to implement the grid code. Under ERA, Eskom is never given the power to enact codes and rules as they do here,’ said Bhana.

News24 reports that Bhana said that the new grid rules, which required applicants to prove their readiness to proceed by obtaining various approvals from water licences to environmental authorisations, were not practical, as many of these could only be obtained after grid access was secured.

‘It is a chicken-and-egg situation,’ he said.

Full News24 report