Energy — 12 July 2013

Nelson Mandela Bay Business Chamber CEO, Kevin Hustler welcomed business leaders to a presentation on “reverse metering or small scale embedded generation” and the implications for business in the Bay at the Beach Hotel in Port Elizabeth this morning.

Kestrel Renewable Energy, a branch of Eveready, whose wind turbine powers the traffic light adjacent to the Beach Hotel, sponsored the event.

The discussion was lead by Peter Nielson, Acting Director of Energy and Electricity at the Nelson Mandela Bay Metro. Peter is a key player in convincing NERSA to waive the need for a license that is required under the Energy Act, (ACT NO 4 OF 2006) to allow small scale embedded generation below 100 kW.

The Nelson Mandela Bay Metro (NMBM) has subsequently developed a system, forms, and an application process according to standard practice principles and has specified the web-based metering equipment to allow any person or organization producing less than 100 kW to connect to the grid on a net-metering basis.

Net-metering allows small-scale generators to be rewarded for the energy they produce which is exported to the municipal network. Thus the bill sent to the client is for the net energy the client has consumed from the municipal gried i.e., the total import from the municipal network minus the total export onto the network. Optimal sizing and use of net metering could end up in a zero energy bill, except for the basic energy charge that remains payable to the NMBM.

Although the license waiver is not exclusive to the NMBM, and utilities nationally may implement a similar system, NMBM has taken the lead in developing the standard practice procedures to boost economic development in the Bay. Nielson has taken a long-term view on the sustainability of the NMBM and has positioned its decision with the attitude that more energy availability in the Bay means increased economic development on which the NMBM would eventually receive increased revenue. So the energy purchase losses it will experience through small scale embedded generation now, will lead to longer term profitability for the NMBM and a more sustainable existence.

A document detailing the interim requirements for Small Scale Embedded Generation (SSEG) can be downloaded at

Key questions were then asked by the business attendees:-

1) Is the Nelson Mandela Bay the first Metro to approve the embedded generation system?

The need to apply for either a license or waiver, for a small scale Embedded generation system (<100KW) was waived by NERSA, on September 22, 2011.

The NMBM has taken this enabling decision to the point of designing a process of application, and stipulating the 4-quadrant metering and modem system that is suitable.  All Local Authorities can do this.

The application form can be downloaded at:

2) Will cash be exchanged if more electricity is generated than used?

Under this SSEG no cash will be exchanged.  The meter effectively goes back to zero at the end of each billing period which the Metro has set at as one month.

Two examples are set out below:

Example 1: Less renewable energy is produced than used from the Municipal supply

Municipal supplied energy         1500 kWh

Generated Electricity                      400 kWh

Balance is                                         1100kWh

The customer will pay the applicable rates for the 1 100kWh’s plus admin fees.

Example 2: More renewable energy is produced than used from the Municipal supply

Municipal supplied energy             500 kWh

Generated Electricity                      1450 kWh

Balance is                                          950kWh

The customer will not pay for any electricity units, nor will be paid cash for the extra generated electricity put back into the grid but will pay the admin fee associated with the billing processes.

3) Who pays for the meters?

The NMBM will pay 50% of the cost of a meter. The cost for a 3-phase meter and web-based modem is approximately R 3800 and for a single-phase R 2800.

4) Will the Municipality be generating electricity for itself or only industry?

The Municipality itself will not be producing electricity per se but rather has worked at setting up the policies and procedures to enable industry, commerce and the residential sectors to generate renewable energy.

5) Does this apply only to wind generated energy?

No, this does not apply only to wind generated energy. It applies to any renewable energy sources so could be applied to solar power, bio-gas generation, etc.

6) Can there not be any objections from neighbors in residential areas against the wind turbines?

Yes the normal Building Codes still need to be complied with in respect to the technology in use.  For wind there are height restrictions and structural considerations, for example. For solar, the PV panels do not trigger an EIA or basic assessment but the local by-laws and codes would apply.

7) If I have 3-phase installation can I generate up to just under 300 kW?

No, extra generation cannot be achieved for each phase of electricity –rather it is based per metering point on a property.

8) Can I sell the extra energy generated?

Yes it is possible. This is done via an approved trading company outside of the Municipality on a willing buyer, willing selling basis. The Municipality will however take a 7% fee for wheeling the electricity.

9) Does the Municipality approve all technologies?

The NMBM does not endorse any specific products or services (brand names). The Metro cannot police the installations but the certificate of compliance needs to meet certain European Standards and where applicable, SANS standards.

10) Will the Municipality pilot test any new technologies?

No, the Metro will not test any new technologies but the local Nelson Mandela University has a good testing facility and works closely with the Metro.


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