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After more than three and a half years, Gold Fields has announced the energy regulator had finally approved its plans to build a 40MW solar plant for its South Deep mine west of Johannesburg.
Gold Fields CEO Nick Holland, who retires on 1 April 2021, will be pleased that the project at the company's last South African mine has finally been approved, ticking one item off his in-box before stepping down.
"We expect our investment in renewable and low-carbon energy sources to contribute significantly to our carbon-emission reductions over the next few years. Power from the South Deep solar plant will partially replace coal-fired electricity from Eskom, enabling us to significantly reduce our Scope 2 carbon emissions," Holland said.
Any progress on the renewable energy front in South Africa is welcome, but the long approval process underscores either a lack of capacity, political obstacles or a mystifying lack of urgency among the country's energy regulators. Eskom's woes are everyone's woes, with the lack of reliable power probably the biggest threat to investment, economic growth and job creation. Then there is the small issue known as climate change.
Yet, a mining company that wants to make a job-generating investment to reduce its reliance on Eskom and its carbon emissions has to wait years for a project like this to see the light of day. Gold Fields had gone through a lengthy process, beginning with the Department of Energy in July 2017, which then became part of the Department of Mineral Resources and Energy. After the further engagement, the application formally landed with the National Energy Regulator of South Africa (Nersa) for approval in June 2020 – eight months ago.
Nersa said that because of the pandemic, the application could not be processed within required timelines. It also said that there were "unverified and misleading reports that Nersa has delayed processing this application since 2017".
That is fair enough: Nersa did not get the application until June 2020.
The Nersa statement went on to say that when it was first submitted in 2017, it "could not be processed because it was not compliant with the requirements of the Electricity Regulation Act, 2006. The application did not have ministerial approval to deviate from the Integrated Resource Plan (IRP), as was required by section 10(2)(g) of the Electricity Regulation Act, 2006. South Deep Gold Mine also did not have environmental authorisation as required by the National Environmental Management Act, 1998."
That raises a number of questions, given the urgency and serious nature of South Africa's unfolding energy crisis, not to mention the climate crisis. Why was ministerial and environmental approval not given sooner? Government officials, including the president, constantly talk about the need to attract investment, create jobs and improve energy supplies.
But if it takes three and a half years to get a 40MW solar project off the ground, there are clearly snags somewhere along the regulatory chain and in the legislation that are crying out to be fixed. Foreign companies that want to invest here and set up a self-generation renewable project because they can't rely on Eskom are going to think twice before committing their capital.