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SA’s pro-renewable approach adds complexity

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While the permitting process for solar PV and other projects is becoming quicker, regulations will still require the involvement of environmental assessment practitioners. Image credit: Jeremy Bezanger from Unsplash

SA’s pro-renewable approach adds complexity

South Africa’s new pro-development and pro-renewables approach can bring added complexity for developers and to the environmental compliance landscape.

South Africa’s environmental compliance landscape is becoming more pro-development as government tries to speed up the permitting process for renewable energy projects – but this can bring added complexity for developers.

With at least seven new or proposed regulations applicable to renewable energy environmental processes released in 2021 and 2022 alone, it has become more challenging for developers to determine the appropriate way forward, says Sue Reuther, Partner and Principal Environmental Consultant at SRK Consulting.

The latest Department of Forestry, Fisheries and the Environment (DFFE) proposals to exclude solar photovoltaic (PV) projects in areas of medium to low environmental sensitivity from the need to obtain Environmental Authorisation (EA) were recently released for public comment.

“These moves are indicative of a more pro-development and pro-renewables approach by the DFFE, in the interests of helping resolve our energy crisis,” says Reuther. “This is a significant deviation in the way that South Africa has handled its environmental permitting, which to date has been more conservative.” She cautioned, however, that these are still proposals on which the department will receive public comments before any final decisions are reached.

Sue Reuther, Partner and Principal Environmental Consultant at SRK Consulting.

Regulatory change opens playing field  

This follows a landmark regulatory change last year to raise the limit below which private power producers do not have to apply for a generation licence from 1 MW to 100 MW. This opened the way for more businesses to generate their own power, as well as for more independent power producers to enter the market without needing a licence from the National Energy Regulator of South Africa (Nersa). In July 2022, President Ramaphosa announced the government’s intention to completely remove the threshold.

In response to the escalating energy crisis, and to reduce the carbon-intensity of South Africa’s energy, government had also recently doubled the procurement volume of Bid Window 6 of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

“With Nersa’s licensing changes, though, REIPPPP is no longer the only procurement route,” she pointed out. “Energy project developers can now also reach direct agreement with an end-user, and do not only have to rely only on successful REIPPPP bids.”

“In addition to the Nersa registration, there have also been a number of amendments to the environmental permitting processes,” she says. “These efforts aim at streamlining and fast-tracking renewable energy projects where possible, without unduly compromising oversight of their environmental impact.”

Since 2018, all solar and wind energy projects located in Renewable Energy Development Zones (REDZ) require a shorter basic assessment (BA) process even if historically they would have triggered a longer EIA process. The currently proposed changes focus on areas of low to medium environmental sensitivity, where solar projects would no longer require an EA, although the developer does need to follow a new registration process. A similar approach was gazetted in July 2022 for transmission lines located in Strategic Transmission Corridors.

“Interestingly, under the recent proposal transmission lines for qualifying solar projects would be exempt from EA irrespective of the environmental sensitivity of their location” she says. “This makes practical sense, as one of the results of a greater number of smaller renewable power producers is that the power grid is becoming much more decentralised, and this will need more powerlines to be constructed – hence the efforts to speed up permitting on this front”, says Reuther.

Renewable energy’s significant impact

Renewable energy generation can have significant environmental impacts, and the need for professional oversight and independent assessment remains crucial, says Nicola Rump, Principal Environmental Scientist at SRK Consulting.

The permitting process for solar PV and other renewable projects is becoming quicker (for qualifying cases), but the regulations will still require the involvement of environmental assessment practitioners (EAPs). “An EAP and specialists still have to verify the sensitivity of a site, and make the necessary motivations based on their findings, for the project to qualify for exemption from needing an EA,” says Rump.

She adds that many projects are funded by international financial institutions, who have their own stringent requirements. These are stipulated in loan contracts to ensure that borrowers manage their environmental and social risks responsibly.

“These lenders often look beyond borrowers’ compliance with local laws, and demand that they develop their projects as responsible corporate citizens,” she says. “Indeed, as renewable energy projects proliferate, we expect more overlap with ecologically, visually or socially sensitive areas, and thus more receptor and stakeholder interest. This will require careful assessment of competing interests and objectives.”

Nicola Rump, Principal Environmental Scientist at SRK Consulting.

SA’s pro-renewable approach adds complexity

Reuther outlines a number of impacts which renewable projects typically have in their host regions. For wind energy facilities, a common environmental concern is avifauna mortality (i.e. bird deaths), while PV installations require extensive clearing of vegetation.

“The visual impact of large-scale renewable projects, including powerlines, can affect the ‘sense of place’ of the area in which they are located,” she says. “This might undermine the generally positive reception that renewable energy has among many stakeholders.”

Renewable energy projects also create (limited) direct jobs and are required to generate a certain level of benefit to local communities under REIPPPP rules, rules which are not necessarily applicable to projects with a direct end-user agreement.

Easing the regulatory requirements for renewable energy projects will likely boost the sector in South Africa, which could stimulate the local value chain, such as production of components within South Africa, with significant job creation potential.

Reuther concludes that although EIA requirements have been relaxed for some projects, environmental screening and stakeholder engagement must still be conducted – and many projects will not benefit from the EA exemption.

“SRK keeps abreast of regulatory changes and continues to work with clients to navigate both the complex EIA processes and the less onerous processes like registration for renewable projects in medium to low sensitivity areas,” she says.

A greater number of renewable power producers will also require more powerlines to be constructed. Image credit: Jason Richard from Unsplash

SA’s pro-renewable approach adds complexity

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SA’s pro-renewable approach adds complexity

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