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Nersa subcommittee recommends approval of 40 MW South Deep solar licence - Engineering News

Monday, 8 February 2021

The National Energy Regulator of South Africa's (Nersa's) electricity subcommittee has recommended that the Energy Regulator approves Gold Fields' high-profile licence application for a 40 MW solar photovoltaic (PV) project to be developed at its South Deep mine, in Gauteng.

Nersa has confirmed with Engineering News & Mining Weekly that the decision was made at a virtual meeting of the subcommittee on February 5.

The licence approval is likely to be on the agenda for approval at the next meeting of the Energy Regulator, scheduled for February 25. The final agenda for the meeting has not yet been published, however.

Nersa hosted a public hearing into Gold Fields' application in late 2020 after a South Deep JV lodged an application for the development of a solar PV facility in the Magisterial District of the West Rand.

The 40 MW project will represent between 20% and 25% of the average consumption of the undergound South Deep mine, located near Carletonville.

Gold Fields CEO Nick Holland says he notes and welcomes the decision by the sub-committee, and awaits the outcome of the full Nersa meeting on February 25. "Our plans are ready to commence the project once all approvals are in hand."

The application has garnered much attention as it has highlighted the challenges associated with securing a generation licence in South Africa.

While taking three years to navigate Nersa's cumbersome licensing processes, the JSE-listed miner has simultaneously been able to complete the construction of a 23 MW renewables plant at its Agnew gold mine, in Western Australia. This, despite ongoing bouts of load-shedding in South Africa, owing to the poor performance of Eskom's coal fleet.

These licensing difficulties are not unique to Gold Fields and have prompted calls for South Africa to lift the licensing exemption threshold from 1 MW to 50 MW to help facilitate electricity generation investment by large electricity consumers.

In an important recent development, Eskom has expressed its support for the lifting of the exemption, with the proviso that such a move is accompanied by tariff reform that fairly compensates the utility or the municipality for providing back-up grid services.

Eskom CEO Andre de Ruyter has argued for a tariff structure reflective of the fact that Eskom will be playing the role of a "giant battery" to these distributed plants, which will mainly be developed on the back of variable renewable-energy technologies.

De Ruyter's comments have been widely supported by the mining industry, as well as other large electricity consumers, represented by the Energy Intensive Users Group of Southern Africa.


In addition, the South African Photovoltaic Industry Association (SAPVIA) has welcomed Eskom's support for an increase in the licence exemption cap, arguing that distributed generation can add capacity to the grid, reduce load-shedding and create jobs.

"SAPVIA has long been engaged in advocating for the systematic easing of licensing thresholds, to unlock the significant opportunity held by distributed generation. We therefore welcome the support of the state-owned utility for lifting licensing thresholds from 1 MW to 50 MW in order to accelerate distributed generation by large customers," COO Nivesh Govender says.

Eskom's support, he adds, should encourage greater haste by the Department of Mineral Resources and Energy in making the necessary regulatory changes.

"It is clear from Mr De Ruyter's comments that Eskom have realised that they must look for alternative solutions to combat the ongoing energy crisis and we are hopeful that this will be followed up with the necessary legislation changes to make this a reality."

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