legislation governing the implementation of small …white paper of 1994 laid the foundation for...

AbstractThe Department of Energy’s ‘new household electri-fication strategy’ allows for any appropriate andaffordable technology option to be applied towardsachieving South Africa’s non-grid electrification tar-get of 300 000 households over the period 2014 to2025. This paper describes the main legislative andregulatory framework governing the implementa-tion of small-scale hydropower (SHP) projects inSouth Africa with the aim of attaining the objectivesof the non-grid electrification component of the‘new household electrification strategy’, and indi-cates that it is possible to implement such projectswithin South Africa’s complex institutional architec-ture. The inclusion of run-of-river type small-scalehydropower projects for rural electrification in the2016 updated General Authorisation eased the pro-cess of attaining regulatory compliance in terms theNational Water Act. This implies that these types ofSHP projects would only need to follow a registra-tion process to obtain the required water use autho-risation, and not a full water use licence applicationprocess.

Keywords: non-grid electrification, ‘new house-hold electrification strategy’, regulatory require-ments, general authorisation

Highlights• Appropriate and affordable technology optionapplied towards achieving the non-grid electrifi-cation target in South Africa.

• Small-scale hydropower applied as an appro-priate energy solution.

• Legislation and regulations governing theimplementation of small-scale hydropower fornon-grid electrification in South Africa.

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* Corresponding author: Tel: +27 82 468 8461; email: [email protected]

Journal of Energy in Southern Africa 28(2): 14–28DOI: http://dx.doi.org/10.17159/2413-3051/2017/v28i2a2005

Published by the Energy Research Centre, University of Cape Town ISSN: 2413-3051http://journals.assaf.org.za/jesa

Sponsored by the Department of Science and Technology

Legislation governing the implementation of small-scalehydropower projects for rural electrification in South Africa

Beate Scharfetter*, Marco van DijkUniversity of Pretoria, Faculty of Engineering, Built Environment & IT, Private bag X20, Hatfield 0028, Pretoria, South Africa

Volume 28 Number 2

1. IntroductionThe portion of the populace impacted most severe-ly by events such as droughts, water restrictions andelectricity interruptions is the rural poor, whose abil-ity to adapt and respond to such events is low.Adjusting the approach of Downing (2011), onecan surmise that adaptation to external events fun-damentally entails ‘good development’ as well asbuilding the adaptive capacity of all stakeholders.Downing’s approach recognises a continuum ofstrategies, from ‘good development’ through toactions targeted at reducing future impacts of exter-nal events. ‘Good development’ in a South Africancontext would entail providing all members of soci-ety with at least a basic level of service for water,sanitation and electricity as well as access to basicsocial services such as health and education. TheReconstruction and Development ProgrammeWhite Paper of 1994 laid the foundation for SouthAfrica’s developmental trajectory, focusing inter aliaon providing basic water, sanitation, electricity,healthcare and education infrastructure and infras-tructure services to all the people of South Africa(South Africa, 1994). The government was able toprovide at least a basic electricity service to 86% ofthe population (DoE, 2014) between 1994 and2013, with the backlog mainly in rural areas wheretopography, location and available technology posechallenges to extending the distribution grid, result-ing in increased electricity connection costs.Alternative technological means are required toprovide electricity to sparsely populated areaswhere low potential demand makes it economicallyunfeasible to provide grid-connected electricity.

New household electrification strategyIn June 2013, the Cabinet approved the ‘newhousehold electrification strategy’ of the Depart-ment of Energy (DoE). This strategy extends the tar-get date for achieving universal access to a basicelectricity service from 2014 to 2025 (DoE, 2013).The target has also been revised down from 100%to 97%, with 90% of households to be connected tothe grid and the remainder through high-qualityand cost-effective non-grid technologies (DoE,2013; Jamal, 2015). Prior to the new strategy, thenon-grid portion of the electrification programmewas to be implemented only by private concession-aires appointed by the DoE to provide solar homesystems (SHSs) specifically, and within specific geo-graphical areas. The 2013 strategy makes provisionfor implementing not only SHSs but any possiblecost-effective technology. Furthermore, it is extend-ing the roll-out of the non-grid programme country-wide, to those rural areas with low consumptionand also to high-density urban areas where it is notpossible to provide grid connections. An appropri-ate energy solution could be the application ofsmall-scale hydropower (SHP) technology, either

on its own or in hybrid formation, in conjunctionwith a mini-grid distribution system. In SouthAfrica, typical hybrid formations would includeSHP technology applied in conjunction with dieselgenerators and solar photovoltaic (PV) systems. A2015 technical and economic evaluation of twomini-grid projects implemented previously in SouthAfrica concluded, inter alia, that ‘locations in closeproximity to inland waterways suitable forhydropower provide the most competitive and opti-mal conditions for mini-grids to meet the energyneeds of rural settlements’ (Azimoh et al., 2015).The DoE estimates that the total number of non-grid households needing to be connected between2014 and 2025 is approximately 300 000 (DoE,2013), with the highest potential for non-grid elec-trification initiatives lying in the Eastern Cape andKwaZulu-Natal provinces, as shown in Figure 1.

Figure 1: Anticipated number of households in1000s per province that potentially could

benefit from non-grid electrification projects(DoE, 2013).

Taking into consideration that between 2002and 2013 approximately 68 000 non-grid house-hold connections were made, mainly throughstand-alone SHSs (DoE, 2013), the non-grid electri-fication programme will need to scale-up consider-ably, from an average of 6 200 households per yearover that period, to approximately 25 000 per yearfor the period up to 2025 (see supplementary infor-mation). The operational mechanism throughwhich both the non-grid and grid programmes arebeing rolled-out is the DoE’s Integrated NationalElectrification Programme (INEP). The INEP wasestablished during the 2001/02 financial year toaddress the backlog of households without electric-ity. At that time, it was planned that new householddevelopments would be electrified through therestructured electricity distribution industry. Sincethe restructuring of the distribution industry did notoccur, the INEP not only has to address the electri-

15 Journal of Energy in Southern Africa • Vol 28 No 2 • May 2017

fication backlogs but also the electrification of newhousehold developments and informal households(DoE, 2013). The DoE uses Eskom and municipal-ities as implementing agents for the grid-connectingportion of the programme, and transfers funds tothem to implement the objectives of the INEP. Thefunds need to address the development of variouselements of electricity distribution, including build-ing and upgrading sub-stations and distribution net-works, and electrification of households (DoE,2013).

Numerous regulatory and legislative require-ments govern the implementation of small-scalehydropower schemes in South Africa. Pertinent leg-islation includes the Constitution, the ElectricityRegulation Act (ERA), the National Water Act(NWA) and the National Environmental Manage-ment Act (NEMA). Figure 2 shows the context ofthis legislation in terms of a typical run-of-riverhydropower scheme.

This paper describes the main legislative andregulatory framework governing the implementa-tion of small-scale hydropower projects in SouthAfrica with the aim of attaining the objectives of thenon-grid electrification component of the newhousehold electrification strategy, and to indicatethat it is possible to implement SHP projects withinSouth Africa’s complex institutional architecture.The regulatory and legislative conditions governingan islanded mini-grid system eventually connectingto the interconnected electricity distribution grid arenot addressed in this paper. The research for thispaper was undertaken qualitatively through desk-top studies and engagement with stakeholdersincluding representatives of the Department ofEnergy, the National Energy Regulator of SouthAfrica (NERSA), Eskom, the South African LocalGovernment Association (SALGA), advisors to theDepartment of Energy, the Department of Waterand Sanitation, City Power Johannesburg, the Cityof Tshwane Metropolitan Municipality, and theeThekwini Metropolitan Municipality. Private-sectorstakeholders included electrical engineers and con-sultants, and environmental practitioners specialis-ing in implementing the requirements of the NEMAand the NWA.

2. Small-scale hydropowerHydropower is generated when energy from fallingor flowing water is converted into rotating shaftpower by hydro-turbines, which can be used todrive an electricity generator or other machinery(Paish, 2002). Stated differently, ‘the energy offlowing water is harnessed by turbines, which areplaced in the path of the water flow. The force exert-ed by the water moving over turbine blades rotatesthe turbine runner; the turbine runner rotates thegenerator, which produces electricity’ (FichtnerManagement Consulting AG, 2015). The power

available is proportional to the product of pressurehead and volume flow rate. Topography and geog-raphy, as well as the hydrological flow regimes of aspecific site, will dictate a unique hydropower plantdesign. This investigation was based on hydropow-er plants of size less than 1 MW, at any head, andpredominantly run-of-river type schemes. Hydro-power schemes of 10 MW or less are generally clas-sified as small-scale in South Africa, which collec-tively includes pico- (less than 20 kW), micro- (lessthan 100 kW) and mini- (less than 1 MW) sizedschemes. Run-of-river schemes generate electricityby immediate use of the inflow, by diverting a por-tion or all of the river flow through a turbine.Typically, in run-of-river schemes, a low weir struc-ture is built across a river to maintain a reasonablyconstant head of water. An intake structure is situat-ed behind the weir, from where a canal would gen-erally feed a forebay tank connected to a penstock(Loots et al., 2015). Most of these types of schemeshave no, or very little, storage capacity and are sub-ject to weather and seasonal variations.Importantly, run-of-river schemes do not consumewater, due to the fact that the water diverted at theintake is released back into river after passingthrough the turbines. Figure 2 shows a typical run-of-river hydropower scheme, indicating the mainlegislation governing the implementation of such ascheme.

An inherent risk of SHP technology is that it isdependent on perennial river flows, a risk which, ina semi-arid country such as South Africa, isincreased during drought conditions. This risk ismitigated by analysing historical flow records ofproposed sites as part of the site-selection processfor SHP projects. Taking cognisance of this man-ageable risk, the application of small-scalehydropower is recognised as an appropriate tech-nology for rural electrification for the following rea-sons (ARE, 2014; BHA, 2012; Paish, 2002; Taele etal., 2012):• SHP seems to be the cheapest technology for

rural electrification over the lifetime of a system.The initial capital costs of SHP projects arehigh, but operating costs are low. This is dia-metrically opposite to, for example, the applica-tion of a diesel generator, for which the initialcapital cost is low but the operating costs arehigh. Kusakana (2014) identified suitable tech-nology options, however, that would reduce theinitial capital costs of a SHP, further improvingthe viability of SHP technology (Kusakana,2014).

• SHP technology is mature, robust and reliable,with a proven track-record of longevity (50years or more), and efficiency (70–90%).

• It is a local energy source that makes use ofsmall rivers. Stream flows are generally consis-tent, especially in comparison to the variability


of solar and wind technologies, and thereforeoutput can be calculated with a higher degreeof reliability.

• Operation and maintenance of a SHP system isrelatively simple and can be undertaken byappropriately trained local community mem-bers.

• It is an environmentally friendly and sustainablesolution, which does not consume water.

• SHP technology can be retrofitted to existinginfrastructure, establishing a multi-purposescheme. For example, SHP plants can beretrofitted to existing dams or weirs or integrat-ed into a water reticulation network or irrigationcanal.

• Opportunities for implementing SHP exist inSouth Africa, in particular in the Eastern Capeand KwaZulu-Natal provinces (Jonker Klunne,2012), mainly due to the prevalence of peren-nial rivers and mountainous or hilly topogra-phy. These areas align with the provinces iden-tified by the DoE as having the greatest poten-tial for non-grid electrification in South Africa.

3. Energy policies and programmes from1994 relevant to rural electrificationThe first phase of the predecessor to the INEP, theNational Electrification Programme (NEP), wasimplemented between 1994 and 1999. The mainobjective of this programme was to address theimmense electrification backlog in South Africa’s

rural and urban poor populations. This phaseaimed to provide basic electricity to 2.5 millionhouseholds, and it was to be funded by both thegovernment and Eskom. Eskom undertook the taskto provide nearly 300 000 new connections peryear over five years, or 66% of the total programmetarget, because the majority of the backlog was inrural areas (Bekker et al., 2008). Even though theNEP achieved a high number of rural connectionsduring its initial period, which ran from 1994 to2002, the rural electrification component of the pro-gramme became a key focus only after 2002(Bekker et al., 2008). This shift brought about anincrease in connection costs, a decline in connec-tion rates and the need to provide additional trans-mission infrastructure. Fundamental changes tookplace in government during 2000–2001, whichincluded the decentralisation of service deliveryfunctions from national to local government and theallocation of responsibility for basic service provi-sion for low-income households to the thenDepartment of Provincial and Local Government.This caused uncertainty within government as towhere the INEP should be positioned. The decisionto establish the INEP within the then Department ofMinerals and Energy (DME) was only finalised in2005. The introduction of the integrated develop-ment planning (IDP) process at local governmentlevel, as part of the decentralisation drive, alsoresulted in a change in the approach to electrifica-tion; whereas previously the focus was simply on


Figure 2: Typical run-of-river SHP indicating the main legislation governing its implementation in South Africa.

ensuring connections, the IDP process required anintegrated development approach (Bekker et al.,2008). Challenges with regards to the funding of theINEP also arose during this period. Though at firstthe NEP was funded jointly between governmentand Eskom, following the conversion of Eskom intoa corporation in 2001 it was decided that Eskomwould not provide capital funding for the INEP,which would receive funding directly and only fromthe fiscus (Bekker et al., 2008). As mentioned pre-viously, the INEP is the main programme throughwhich government is implementing its aim ofachieving universal electrification, and therefore hasa direct bearing on any rural electrification initiative.

The White Paper on Energy, promulgated in1998, states that: ‘Government recognises thathousehold access to adequate energy services forcooking, heating, lighting and communication is abasic need. Whilst these needs can be met by vari-ous fuel-appliance combinations, governmentrecognises that without access to electricity, a clean,convenient and desirable fuel, human developmentpotential is ultimately constrained’ (DME, 1998).From a demand perspective, this White Paperemphasised household connections for the low-income, rural population. In this regard, it proposedthat PV systems be provided to those rural commu-nities too remote to be connected to the grid(Bekker et al., 2008), contributing to government’scommitment to universal household access to elec-tricity (Winkler et al., 2006). Further, the WhitePaper promoted energy-efficiency initiatives, partic-ularly to industry, commerce and mining. From asupply perspective, it proposed restructuring theelectricity distribution industry into independentregional distributors, and unbundling Eskom intoseparate generation and transmission companies(Nhamo & Mukonza, 2016). Neither of these twoproposals succeeded in practice; the proposedIndependent System and Market OperatorEstablishment Bill, published for public comment in2011, was not approved by parliament during 2015(Le Cordeur, 2015), and the restructuring of theenergy industry was abandoned by government in2010 (Eberhard, 2013). Importantly, the 1998White Paper shifted the responsibility for energyplanning from Eskom to the DoE (DoE, 2015).

The White Paper on renewable energy, the inte-grated energy plan and the free basic electricity(FBE) policy came into effect in 2003, providingsome institutional guidance towards the implemen-tation of the off-grid SHS programme launched bygovernment in 1999 in response to the proposals ofthe White Paper on Energy, which emphasisedrenewable energy options. The FBE policy wasdeveloped as a result of government’s policy direc-tive in 2000 relating to the provision of free basicwater, sanitation and energy to poor households.The policy aims to alleviate poverty, with anticipat-

ed associated positive spin offs for communityhealth and the empowerment of women. The FBEpolicy allocates 50 kWh per month of free electricityto grid-connected consumers, and further makesprovision for FBE to non-grid energy consumersthrough (partially) subsidising both the once-offcapital cost of the INEP SHS programme and themonthly service fee (see supplementary informa-tion). Alternative energy sources such as paraffinand gas are considered as options to complementrural electrification initiatives because a basic non-grid electrification level of services does not providefor heating and cooking needs (Azimoh et al.,2015).

The 2003 White Paper on Renewable Energyalso proposed that government include privateenergy producers and renewable energy technolo-gies in the electricity generation mix. Figure 3 showsa chronological development relationship of thesepolicies and programmes.

4. Legislation governing the implementationof small-scale hydropower projects for ruralelectrificationThe Constitution, Act No. 108 of 1996, laid downthat generation of electricity is a national govern-ment function and, as per Schedule 4B, the reticu-lation (distribution) of electricity to consumers intheir area of jurisdiction is a municipal function(South Africa, 1996). As electricity generation is nota local government function, municipalities have no‘original competence’ to generate electricity, exceptwhere electricity generation is incidental to a localgovernment function. Further, due to the fact thatelectricity generation is not listed in either Schedule4B or 5B of the Constitution, electricity generationis deemed to be an exclusive national competence.A municipality can, though, derive competence forthe electricity generation function through either aparliamentary executive delegation or a legislativeassignment as per the Constitution (De Visser,2012). Even though rural electrification projectsusing small-scale hydropower technology will entail,in effect, local municipalities generating and dis-tributing electricity, these projects will be stand-alone systems, operating independently of thenational transmission grid, and could therefore beconsidered to be similar in operation to the SHSprogramme. In addition, the provision of basicenergy services to rural communities in SouthAfrica fulfils local government’s constitutional man-date to provide services to communities in a sus-tainable manner and promote social and economicdevelopment and a safe and healthy environment(South Africa, 1996, City of Cape Town, 2015). Inthe context, therefore, of the ‘new household elec-trification strategy’, non-grid, small-scale hydropow-er projects implemented by local municipalities areinterpreted as falling within the ambit of the powers


and functions allocated to local government by theConstitution (see supplementary information). Thefunctional responsibilities listed in schedules 4B and5B of the Constitution are shared between districtand local municipalities. The allocation of responsi-bilities between district and local municipalities isgoverned by the Local Government: Municipal

Structures Act, Act No. 117 of 1998, as amended.This Act allocates the functions of (bulk) water,(bulk) sanitation, municipal health and (bulk) elec-tricity to the district municipalities, but also makesprovision for the National Minister of LocalGovernment to authorise a local municipality toexercise these powers and functions in its areas of


1994

1996

1998

1999

2000

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2015

Non-grid electri!-cation policy

guideline

Suite of supply policy guidelines

for INEP 2016/2017

Universal access

strategy

Figure 3: Timeline of key policies impacting rural electrification in South Africa (Scharfetter, 2016).

jurisdiction instead of the district one (DWAF,2007). For the implementation of rural electrifica-tion projects at local government level, it is impor-tant to take cognisance of how the powers andfunctions relating to electricity service provision aredivided between district and local municipalities,and whether or not municipalities have the capacityto fulfil their designated powers and functions.

The Local Government: Municipal Systems Act,Act No. 32 of 2000, gives municipalities the author-ity to provide services, and gives them the option ofeither providing municipal services themselves orappointing appropriate service providers to under-take those services on their behalf, through a ser-vice delivery agreement between the municipalityand the service provider. This Act thus introducesthe concepts of services authority and servicesprovider (South Africa, 2000). The legislative andexecutive authority function of a municipality, asdefined by section 12 of the Municipal Systems Act,includes the development of policies and by-laws(e.g., tariffs, rates and taxes, and debt collectionpolicies), deciding on the appropriate means of pro-viding municipal services, preparing and managingbudgets and arranging suitable financing for ser-vices (SALGA, 2014; South Africa, 2000). It isimportant to note that only a municipality can beallocated the powers and functions for the authorityrole. However, any capable legal entity can be con-tracted by the municipality to provide the servicesprovision function (DWAF, 2007). Further, no per-son may act as a services provider without theapproval of the services authority. In the cases ofwater, electricity and health, the default positionwas that the services authority would be the districtmunicipality, unless a local municipality was autho-rised by the Minister of Local Government to per-form the function. In the water sector a process wasinitiated in 2003 that clearly defined each munici-pality’s role, whether district or local, as either waterservices authority or water services provider, orboth. In the electricity sector, such a process wasnever initiated, as it was anticipated that the elec-tricity sector was going to be restructured intoregional electricity distributors. As a result, confu-sion exists in the electricity sector as to whichmunicipalities have electricity services authority sta-tus (SALGA, 2014). Lack of clarity regarding theallocation of services authority responsibilities couldpotentially create uncertainty when deciding on anappropriate operating mechanism for a small-scalehydropower plant, specifically around contractingmandates. Cognisance must also be kept of the factthat the DoE makes use of Eskom and municipali-ties as implementing agents for the grid-connectingportion of the INEP, and transfers funds to theseentities to implement the objectives of the INEP.

National sector legislationThe Electricity Regulation Act (ERA), Act No. 4 of2006, as amended, describes the responsibilitiesand powers of the National Energy Regulator ofSouth Africa (NERSA), specifically in regards to theprocessing and issuing of electricity generation,transmission and distribution licences, and electrici-ty trading licences. The Act establishes a nationalframework for the electricity sector, from generationto distribution (City of Cape Town, 2015). The ERAspecifies that NERSA must consider applications forlicences, and may issue licences for the constructionand operation of generation facilities and the con-struction and operation of a power distribution sys-tem (DoE, 2011a). Further, the ERA is very clear inits description of activities that require licencing: itstates that no person may, without the appropriatelicence issued by NERSA, construct or operate anygeneration facility and construct or operate anypower distribution system (DoE, 2011a). The 2ndAmendment Bill includes an exception to thisrequirement:

[A] person who operates a distribution powersystem located solely on private property:

• Need not apply for or hold a tradinglicence, provided that such person doesnot sell electricity to its customers at a pricehigher than the price at which the electric-ity would be sold to those customers by theperson from whom that operator purchas-es the electricity and

• Need not apply for or hold a distributionlicence. (DoE, 2011a)

The Department of Rural Development andLand Reform commenced a process to audit SouthAfrica’s land ownership status. For small-scalehydropower projects for rural electrification in areaswhere land ownership is in flux, it will be importantto know the status of land ownership for distributionlicensing requirements. Even though the Bill has notbeen enacted yet, the intent of the DoE and NERSAin this regard is noted, and NERSA should beengaged with on a case-by-case basis to confirmwhether or not a distribution licence will berequired. It could be that an electricity distributionlicence will be required for a mini-grid system,unless the system is to be implemented on privatelyowned land. Associated with the attainment of anelectricity distribution licence is tariff approval. TheAct further requires that an application for an elec-tricity generation licence must include evidence ofcompliance with the Integrated Resource Plan (IRP)of the time, or provide reasons for any deviation(DME, 2006). The IRP is a national electricity planand a subset of the Integrated Energy Plan. The IRPis also not a short- or medium-term operationalplan but one that directs the expansion of the elec-


tricity supply over the given period, includingemphasising the objectives for the development ofrenewable energy technologies. The 2011-promul-gated IRP emphasises security of electricity supplyand is therefore focused on sources of electricityand the extent of electricity generated that is to betransmitted and distributed via grid infrastructure.Under section 7 of the 2011 IRP, which highlightsthe research agenda for the next IRP, it is stated that‘Off-grid activities should be considered especiallyas there is an impact on the potential futuredemand (through “suppressed demand”’ which hasoccurred as a result of lack of grid access for a num-ber of potential consumers)’ (DoE, 2011b). The2013 non-promulgated and updated version of theIRP was silent on both the recommendation givenin the 2011 version regarding the impact of off-gridelectrification on supply demand, and the ‘newhousehold electrification strategy’. An updated IRPis being developed by the DoE for promulgationduring 2017.

It is inferred that the ERA specifications regard-ing the conditions under which NERSA may issuegeneration licences, namely only for projects thatare identified in the IRP, or are subject to a Section34 determination as per the Act, were written forprojects that will contribute to the country’s genera-tion mix, and which projects’ electricity will betransmitted and distributed through an intercon-nected distribution system.

Conditions governing the issuing of generationlicences are linked to the intended use of the elec-tricity. Electricity generated from renewable energysources, including small-scale hydropowerschemes, can be used in different ways, as follows:• islanded use;• synchronised to the grid without feed in (com-

monly referred to as ‘own use’);• connected to a municipal electricity distribution

network; and• connected to the Eskom electricity distribution

network.Combinations and variations of the above men-tioned categories are also possible.

Rural electrification would be typically classifiedas ‘islanded use’. Electricity generated for ‘islandeduse’ is completely independent of municipal orEskom distribution networks and can be applied forcommercial or non-commercial purposes (VanVuuren et al., 2014). Electricity generated for‘islanded use’ and used for non-commercial pur-poses does not require a NERSA electricity genera-tion licence. Electricity generated for commercialpurposes does require a NERSA electricity genera-tion licence (DME, 2006). No definition of ‘com-mercial’ use is given, but it is assumed that theapplication of a rural electrification project throughmini-grids is a commercial activity and would there-fore require a NERSA generation licence. This

assumption is made given that there is a flow ofgrant funds and the potential exists for householdsto use more than 50 kWh of electricity in a month,which would necessitate payment. Tables 1 and 2summarise the current legislative and regulatoryrequirements to implement non-grid electrificationschemes in South Africa.

It is recommended that NERSA be approachedon a project-by-project basis, assuming that both anelectricity generation and electricity distributionlicence could be required. The right to exempt anapplicant from the need to hold such licences restswith NERSA. Tables 1 and 2 indicate that applica-tions to NERSA for an electricity generation licencerequire both an environmental authorisation and awater use authorisation as per the NationalEnvironmental Management Act and the NationalWater Act, respectively. Permission from the land-owner to install an electricity generation scheme isalso required.

The National Environmental Management Act,No. 107 of 1998, (NEMA), as amended, promotesthe application of environmental assessment andmanagement tools to ensure integrated environ-mental management of activities. The Act aims toimprove the quality of environmental decision-mak-ing by setting out principles for environmental man-agement that apply to all government departmentsand to all organisations that may affect the environ-ment (DEAT, 1998). Section 23 of the NEMA pro-vides the general objectives of integrated environ-mental management, and section 24 outlines theprocedures to be implemented in order to achievethese objectives (DEAT, 2004). An implementationtool of integrated environmental management is theenvironmental impact assessment, or EIA. An EIA isa procedure which ensures that the environmentalconsequences of projects are identified andassessed before an environmental authorisation(previously referred to as ‘record of decision’) by acompetent authority is given (DEA, 2015). A com-petent authority is either the Minister ofEnvironmental Affairs, through the Department ofEnvironmental Affairs, or a member of the execu-tive council of a province who has been assignedresponsibility for the environmental portfolio (DEA,2014). The EIA serves to identify, predict, evaluateand mitigate any environmental impacts of a pro-posed development (DEAT, 2004). Regulations interms of Chapter 5 of the NEMA were published inApril 2006, and revised in June 2010 and again inDecember 2014. These regulations, published asgeneral notices (GN) GN983, GN984 and GN985in the Government Gazette, provide procedures toguide the submission and evaluation of applicationsfor environmental authorisations, including identify-ing the relevant competent authority. At the initia-tion phase of any project or development, theextent of the potential environmental impact is


anticipated through an initial screening processwhich consists of checking the proposed develop-ment activities against current legislation. TheGN983 lists the activities, which, when triggered bya development, would initiate a basic assessment. Abasic assessment is applied when the activities of adevelopment are considered unlikely to have signif-icant environmental impacts. A process of full pub-lic participation or stakeholder engagement is, how-ever, still required. The GN984 lists activities,which, when triggered, would initiate a full EIA. Theactivities presented in this list would result in signif-icant environmental impacts. The GN985 containslisted geographic activities, i.e. activities that stretchacross borders or provincial boundaries. Figure 4summarises the basic steps in each process.

Based on the electricity generation and distribu-tion activity listings of GN983 and GN984, it is verylikely that neither an EIA nor a basic assessmentenvironmental authorisation will be required for theinitiation and construction of the electricity genera-

tion and distribution components of small-scalehydropower schemes. This should be confirmed ona case-by-case basis. Based on the water activitylistings of GN983 and GN984, and depending onthe actual scope of work of a particular small-scalehydropower rural electrification project, a basicassessment could possibly be required.

The National Water Act (NWA) of 1998, asamended, fundamentally changed the way waterresources in South Africa are to be managed andused. The NWA is founded on the constitutionalprinciple that water belongs to all the people ofSouth Africa. It aims to protect, conserve, manageand control water resources as a whole (De laHarpe & Ramsden, 1998) The only right to waterencapsulated in the Act is for basic human needsand the environment, and the Act requires thatwater is ‘reserved’ for these needs before water isallocated for other uses. Water use is controlledthrough regulating the way it can be used. TheNWA regulates water use through the registration of


Table 1: Electricity generated for islanded use (commercial).

NERSA Local electricity Proof of land Environmental Water use Water allocationgeneration utility ownership / permis- authorisation authorisation confirmationlicence involvement sion to use land

Yes (a distri- Yes Needed for Needs to be Needs to be Needs to be addressed bution licence If a municipality NERSA addressed for addressed for for NERSA licencingmight also be would like to act licensing NERSA NERSA requirementsrequired) as implementer of requirements licensing licensing

non-grid electrification requirements requirements If conduit hydropowerthrough the INEP in (see supplementary inform-.areas outside of SHS Yes, if required ation in Section 10), the concessionaire areas, by NEMA Water Services Provider then applications to must confirm that water is

the DoE are to be done Notice by environ- available and hydropower by the local mental practitioner generation will not affect municipality if none is required security of supply.

If conventional hydropower,this will be addressed through the water use authorisationprocess

Table 2: Electricity generated for islanded use (non-commercial).

NERSA Local electricity Proof of land Environmental Water use Water allocationgeneration utility ownership / permis- authorisation authorisation confirmationlicence involvement sion to use land

No Good practice to Yes Yes, if required Yes, if required by If conduit hydropower,inform by NEMA National Water Act water services provider

(if water resource is must confirm that water directly impacted) s available and hydro-

power generation will not affect security of water

supply and services

If conventional hydropower, this will be addressed through the water use authorisation process

existing lawful water use, and through differenttypes of authorisations (De la Harpe & Ramsden,1998). Applications for water use registration orauthorisation are to be submitted to the applicablecatchment management agency (CMA) or proto-CMA, if a CMA is not yet constituted. Three differ-ent categories of water use authorisation exist, asshown in Figure 5, but only two are of relevance forthe development of small-scale hydropower pro-jects. The first category does not require a licence orregistration for water use, as defined in Schedule 1of the NWA. Schedule 1 water uses are mainlydomestic in nature, with minimal risk and impact onthe water resource.

A set of 11 consumptive and non-consumptivewater uses is defined, any one of which wouldrequire a water use authorisation:

21(a) taking water from a water resource;21(b) storing water;21(c) impeding or diverting the flow of water

in a watercourse;21(d) engaging in a stream flow reduction

activity contemplated in section 36;21(e) engaging in a controlled activity identi-

fied as such…;

21(f) discharging waste or water containingwaste into a water resource through apipe, canal, sewer, sea outfall or otherconduit;

21(g) disposing of waste in a manner whichmay detrimentally impact on a waterresource;

21(h) disposing in any manner of water whichcontains waste from, or which has beenheated in, any industrial or power gener-ation process;

21(i) altering the bed, banks course or charac-teristics of a watercourse;

21(j) removing, discharging or disposing ofwater found underground if it is neces-sary for the efficient continuation of anactivity or for the safety of people; and

21(k) using water for recreational purposes.(DWAF, 1998)

Of these clauses, 21(c) and 21(i) are of particularrelevance to small-scale hydropower projects.

Water use authorisation: Registration interms of a general authorisationGeneral authorisations (GAs) allow the Department


Figure 4: Typical processes associated with a basic assessment and an environmental impact assessment (Scharfetter, 2016).

ScreeningCheck

Listings

BAEIA

submit application to Provincial DEA & attain

reference number

submit application to Provincial DEA & attain

reference number

Draft Scoping Plan, & compile Scoping Report

Public Participation Process

Draft BA Plan, undertake PPP & compile BA Report

(form)

Draft EIA Plan, compile IAR report and Environ-

mental Management Plan

Environmental Authorisation Environmental Authorisation

of Water and Sanitation to authorise large numbersof people to take up water without the need for alicence. A GA can be limited to a specific group ofpeople, and/or specific water resources, and hasseveral advantages, including:

• Smaller scale emerging users would notneed to be ready to apply for a licence;

• General Authorisations can be adapted forspecific regional and social needs;

• General Authorisations can promote theuptake of smaller amounts of water bymany people – and hence can have agreater impact on poverty;

• They can reduce the administrative burden;• They can allow for the gradual uptake of

water by the poor, paralleled with the grad-ual reduction of use by existing lawful waterusers.’ (Department of Water and Sani-tation, n.d.)

In terms of section 39 of the NWA, GAs are pub-lished periodically (normally every five years) in theGovernment Gazette. If the intended water useactivity is covered under a GA then a registrationprocess is to be followed. Importantly, a GA is onlyapplicable to specific rivers or catchments and notto the whole country. On 26 August 2016, a revisedand updated GA was gazetted in General Notice509 of 2016: ‘General Authorisation in terms ofSection 39 of the National Water Act 1998 (Act no36 of 1998) for water uses as defined in section21(c) or section 21 (i)’. This GA now includes thefollowing activity, under Appendix D2:

SOC’s, Institution or IndividualMunicipalities and Mini-scale hydropower devel-other institutions opment with a maximum

capacity of 10kW to 300kW (Read together with General notice 665 of 6 Sept 2013 General Authorisation section21(e) or as amended)

These hydropower plants will provide basic, non-grid electricity to rural communities and agriculturalland and must in no way affect the flow regime,flow volume and/or water quality including temper-ature.

The SHP projects initiated and implemented forislanded, non-grid electrification purposes wouldonly need to follow a registration process to obtainthe required water use authorisation, and not a fullwater use licence application process, saving timeand costs. The registration process for an activitylisted in a GA entails compiling a document packthat includes the following information, as shown inFigure 6:• part 1: Form detailing the applicant type;• part 2: Forms detailing the intended water uses;

a form per water use is to be completed; and• substantiating documentation as per the GA

and the published risk matrix.

The regional office to which the submission wasmade will issue a registration number to the appli-cant after the application has been reviewed and


Figure 5: Three types of water use authorisations (De la Harpe & Ramsden, 1998).

NO REGISTRATION

Small quantity of water

Schedule 1

Minimal or no risk

REGISTRATION

Limited water use

General Authorisation

Low risk

REGISTRATION & LICENSING

Greater water use

Water Use Licence

High risk

Increasing risk of impact on the water resource


Figure 6: Submission documentation required for both a water use licence and the GA registration (Scharfetter, 2016).

Water use authorisation given per portion of property

Part 1

Applicant Type

Either / or

Property relationship details

Individual WSP

Company, business, partnership or

community, National or Provincial Government

WUA

Form 901: Property

details

Form 902: Land owner

consent + title deed

Part 2

Water use

eg 21cimpeding or diverting the !ow of water in a

watercourse

eg 21ialtering the bed, banks course or

characteristics of a watercourse

Must be completed for each use

IF LICENCE, THEN ALSO NEED:

IF GA Registra-tion, THEN ALSO

NEED:

Supporting Documents as

per "Substantive Checklist"

Supporting Documents as

per "Risk Matrix"

approved, with the understanding that the applicantwill honour the conditions of the authorisation.

Water use authorisation: Water use licensingIf the intended use is not covered in a GA, then alicencing process is required (see Figure 6).

An application for an electricity generation licence,an electricity distribution licence, a water use autho-risation or an environmental authorisation mustshow that the permission of the land-owner to usethe land has been attained, if the land is not ownedby the developer. In South Africa, given the dispos-session of the land and subsequent attempts toaddress this dispossession, it is important to knowwho owns the property and what land use rightshave been vested to that property and to whom.Land can be owned privately or by the state.

Privately owned (or non-state owned) landincludes land owned by:• a community property association, or CPA. A

CPA is a legal body that can be established bycommunities in order to submit land claimsthrough the Restitution or Redistribution landreform programmes (DLA, 1997). The estab-lishment of CPAs is legally governed by theCommunal Property Associations Act, Act No.28 of 1996. The Act is aimed at enabling com-munities ‘to form juristic persons, to be knownas communal property associations, to acquire,hold and manage property on a basis agreedupon by members of a community in terms ofa written constitution, and to provide for mat-ters connected therewith’ (DLA, 1996);

• municipalities (municipal commonage);• traditional authorities and registered by the

deeds office (DRD & LR, 2013); and• individuals.

State-owned land (i.e. owned by national orprovincial government) includes:• land owned by the state but administered by

trusts or other entities, for example the Ingon-yama Trust in KZN (DRD & LR, 2013). Theland is owned by the state, but is administeredon behalf of the community by the trust. Theland is therefore held in trust by the state andis not owned by the community or communi-ties;

• state assets and developed state land. TheDepartment of Public Works is usually the cus-todian of state-owned land (SANRAL, 2008),and in particular all state assets and developedstate land (Umhlaba Consulting Group, 2013);

• land under various tribal authorities. TheMinister of Rural Development and LandReform is the custodian of state-owned land onbehalf of (inter alia) various tribal authorities(SANRAL, 2008).

For development purposes, land is eitheracquired, and the land-use rights changed if neces-sary, or permission to use the land is obtained fromthe land-owner, and a servitude registered in thename of the land user for the portion of land subjectto development. Importantly, any community orcommunities living on the land must pass a resolu-tion to approve the servitude and land use before alandowner would be able to grant the servitude.

5. Way forwardThe aim of the research was to initiate, plan, designand implement small-scale hydropower projects fornon-grid rural electrification in two district munici-palities in South Africa, namely the O.R. TamboDistrict Municipality in the Eastern Cape Provinceand the Umzinyathi District Municipality in theKwaZulu-Natal Province. A suitable project site wasidentified on the Thina River within the MhlontloLocal Municipality, and a 50 kW run-of-river typescheme has been designed and constructed whichis able to provide at least a basic energy service tothe approximate 50 households of the KwaMadibacommunity. Once the scheme is commissioned,actual demand and supply dynamics, consumptionpatterns and improvements in quality of life thatresult from such a stand-alone, mini-grid system inthe context of rural electrification, will be analysedand compared to the desktop studies undertakenon those aspects.

6. ConclusionsIn South Africa, the electricity sector is governed byrobust legislation such as the National ElectricityRegulation Act; by policies such as the White Paperon Renewable Energy and the free basic electricitysupport tariff policy; and by strategies such as the‘new household electrification strategy’. In additionto complying with the requirements of the ElectricityRegulation Act, SHP projects towards non-grid ruralelectrification will need to comply with the require-ments of the NEMA and the NWA. With regard tothe NWA, this research project led to the inclusionof run-of-river type small-scale hydropower projectsfor rural electrification in the 2016 updated GA.This implies that these types of SHP projects wouldonly need to follow a registration process to obtainthe required water use authorisation, and not a fullwater use licence application process, saving timeand costs, benefitting the owner municipality andthe communities served. Small-scale hydropowerprojects for non-grid rural electrification in SouthAfrica would typically be implemented by local gov-ernment, as it is their constitutional mandate toensure service delivery. Even though theConstitution deems that electricity generation isexclusively a national government function, rural,non-grid electrification, at such small scales aswould be implemented through the ‘new household


electrification strategy’ and as islanded systems, isnot considered contrary to the principles of theConstitution. The implementation of SHP projectsrequires intergovernmental coordination both hori-zontally across sectors and departments and verti-cally across the three spheres of government due toits multi-sectoral nature. South Africa’s robust leg-islative architecture in the water, environmental andenergy sectors provides opportunities for the imple-mentation of small-scale hydropower projectsapplied for non-grid rural electrification. Taking cog-nisance of this dynamic regulatory environment,and the individual nature of each project, recentlegislation and regulations should be consulted on acase-by-case basis as part of the feasibility analysisof a project.

AcknowledgementsThis research was funded by the Department of Scienceand Technology and the Water Research Commission,whose support is acknowledged with gratitude.

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