Understanding the challenges of multiple regulatory processes for photovoltaic (PV) solar power projects

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Understanding the challenges of multiple

regulatory processes for photovoltaic

(PV) solar power projects

BB Shomang

orcid.org 0000-0001-8360-9898

Mini-Dissertation accepted in partial fulfilment of the

requirements for the degree

Master of Environmental

Management

at the North-West University

Supervisor:

Ms CS Steenkamp

Co-supervisor:

Prof A Morrison-Saunders

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ACKNOWLEDGEMENTS

I would like to thank God first for providing me with the strength to start and finish the research. I will be always grateful for the gift of life and the experience.

This research would also not have been possible without the assistance from:

a. My supervisors, Ms C.S. Steenkamp and Prof. A. Morrison-Saunders, for their continued guidance.

b. My husband and family, for their love and support, which made the process bearable. c. Dr Karen Surridge-Talbot, for the assistance provided during this research process. d. Ms Marieke Desmond for the advice and assistance provided.

e. The Regulators who provided the required data for the research and availed themselves for the different interviews.

f. The project developers and environmental specialists who assisted with the information required.

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ABSTRACT

A complex web of regulatory processes from different government entities governs current photovoltaic (PV) solar power project authorisations. For a regulatory system to be suitable, it must include efficient institutional, regulatory and policy structures. There is great benefit in the seamless alignment of policies and programmes. A guiding principle for sound policy-making is to develop policies that are aligned and coherent to ensure feasibility and effectiveness. The objective of the study is to understand the project developers and regulators challenges inherent to multiple regulatory processes for PV solar power projects. This study followed a qualitative approach, using case studies and interviews to obtain research data about the multiple authorisations required for PV solar power projects. The research sample included eight case studies of authorised projects in the Northern Cape province between 2014 and 2016. Interviews were also conducted with regulators and project developers involved in the authorisation process of PV solar power projects. Some of the challenges identified include the fragmentation, alignment, non-integration of processes and lack of coordination among the three levels of government involved: national, provincial and local. The issuance of different required permits and licenses is separate for the different agencies/departments and some regulatory requirements are, in fact, contradictory to those of other State Entities. Although the study highlights a numbers of challenges for multiple regulatory processes, recommendations on addressing identified challenges are suggested. These recommendations include regulatory coherence, cooperation and coordination, which can assist the different agencies / departments to communicate and coordinate their processes in order to align multiple regulatory processes of PV solar power projects.

Key terms

Multiple regulatory processes, challenges, alignment, coordination, photovoltaic solar power projects

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ACRONYMS

CARA Conservation of Agricultural Resource Act No. 43 of 1983 CSIR Council for Scientific and Industrial Research

DAFF Department of Agriculture, Forestry and Fisheries DBSA Developmental Bank of South Africa

DEA Department of Environmental Affairs DME Department of Minerals and Energy DMR Department of Mineral Resources DoE Department of Energy

DWS Department of Water and Sanitation DoE Department of Energy

EAP Environmental Assessment Practitioner

ECA Environmental Conservation Act No. 73 of 1989 EIA Environmental Impact Assessment

EIAR Environmental Impact Assessment Report

EIAMS Environmental Impact Assessment Management Strategy EMP Environmental Management Plan

FIT Feed in Tariff Policy

I&AP Interested and Affected Parties

IEM Integrated Environmental Management IFC International Finance Corporation IPP Independent Power Producers

MinMec Ministers and Members of the Executive Council NDP National Development Plan

NEMA National Environmental Management Act No. 107 of 1998 NEPA National Environmental Policy Act 1969

NERSA National Energy Regulator of South Africa NSSD National Strategy for Sustainable Development NT National Treasury

OECD Organisation for Economic Co-operation and Development PICC Presidential Infrastructure Coordinating Committee

PPP Public Private Partnership PV Photovoltaic

REFIT Renewable Energy Feed-in Tariff

REIPPP Renewable Energy Independent Power Producer Procurement REDZs Renewable Energy Development Zones

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SANBI South African National Biodiversity Institute SANRAL South African National Roads SOC Ltd SEA Strategic Environmental Assessment

S&EIR Scoping and Environmental Impact Assessment Report SID Strategically Important Developments

SIP Strategic Integrated Project SKA Square Kilometre Array

UNEP United Nations Environment Programme USA United State of America

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LIST OF TABLES

Table 1-1: Research structure ... 7

Table 2-1: Alignment of the research sub-questions and the research interview questionnaire ... 19

Table 3-1: Summary of multiple regulatory processes challenges for PV solar power projects ... 28

Table 3-2: Potential environmental impacts on solar energy renewable projects adapted from (DEA, 2015) ... 31

Table 4-1: Summary of case studies number of authorisation required ... 46

Table 4-2: Summary of challenges stated by project developers and regulators ... 49

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LIST OF FIGURES

Figure 1-1: Cartoon featured in This Is Common Sense (Jacob, 2016). ... 1

Figure 2-1: Map illustrating the locations of the eight PV solar power projects case studies (NWU, 2019) ... 12

Figure 2-2: Determining the research tools (own illustration) ... 14

Figure 2-3: Structure of the literature review (own illustration) ... 16

Figure 3-1: PV solar power project life cycle (DoE, 2015:36) ... 33

Figure 3-2: Aligned authorisation timeframes for the different authorisation identified by the EIA process (DEA, 2015:76) ... 34

Figure 4-1: Illustration of different spheres of government authorising PV from the case studies (own illustration) ... 37

Figure 4-2: The number of government authorities authorising PV solar projects ... 45

Figure 5-1: Recommendation to circumvent the challenges of multiple regulatory processes ... 61

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CHAPTER 1: INTRODUCTION

1.1 CHAPTER OVERVIEW

This dissertation examines project developers’ and regulators challenges of multiple regulatory processes for PV solar power projects. The background and problem statement forms part of section 1.2 of this chapter, while section 1.3 gives the justification of research. Section 1.4 introduces the research question and the research objective. Finally, section 1.5 assists the reader to understand the flow of dissertation and the relationship of the different components to the research question and sub-questions.

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The cartoon in Figure 1.1 is thought-provoking and illustrates a different view from the one that backs regulatory requirements to be central to environmental safety and enhancement which results in better productivity (Pew Charitable Trust, 2015). This view depicts regulations as challenging and arbitrary instruments. Regulations are rules enforced as laws and issued by a government regulatory body (Merriam-Webster, 2019). There are different types of regulatory processes used to control activities; these processes provide rules for monitoring certain developments. Contributing to the challenge of regulatory processes is the fact that the development of many of the regulatory processes is arbitrary (Glachant et al., 2013:269). Regulatory processes are tools developed to enable responding to a particular deficiency in a particular process. The arbitrary manner of applying regulatory process explains the fact that the regulator is in the process of learning during the application of regulations (Glachant et al., 2013:270).

The multi-layered approach for attaining approval to construct and operate renewable energy projects result in a prolonged challenge of having multiple agencies/departments responsible for providing authorisations (Lowenstein & Panarella, 2018:269). Kavulla and Karfas (2018:151) refer to the different authorisation agencies as making compulsory requirements instead of playing an advisory role during the authorisation of renewable energy projects. The value of regulatory processes is realised when the regulatory instruments and the resources required for implementation of a regulation are aligned (Glachant et al., 2013:267). For a regulatory system to yield positive outcomes, it must therefore include a good institutional, regulatory and policy structure (Bawakyillenuo, 2009:931). This implies a suitable policy administration, clear control systems, efficient legislation, robust regulatory agencies and financial institutions that will support energy generation (Bawakyillenuo, 2009:931).

Both developed and developing economies use renewable energy to meet the high demands of energy. This type of energy contributes to the reduction of CO2 emissions (Kutan et al.,

2018:1764). Renewable energy sources include solar, wind, biomass, fuel cell technology and hydro-energy (Magbool et al., 2018:992). Although renewable energy projects like photovoltaic (PV) solar power plants may reduce greenhouse gas emissions, their installation can have an adverse effect on other environmental factors such as biodiversity disturbances as a result of vegetation clearing (Hernandez et al., 2014:769). Due to these potential adverse impacts on sensitive natural areas, PV solar power project development cannot occur without environmental assessments.

South Africa authorise PV solar energy power projects using multiple regulatory processes.The objective of the research is to understand the project developers’ and regulators challenges with

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PV solar power projects lead to unnecessary complexities through contradictory laws in some instances (Chaianong et al., 2015:367). These contradictions are often the result of non-alignment of different regulations. Renewable energy project developers might view the required regulatory approvals as negatively affecting financial gains (Guerin, 2017:341). In some instances, multiple regulatory processes for PV solar projects discourage investors wanting to invest in this type of technologies (Polzin et al., 2015:109).

1.3 JUSTIFICATION FOR THE STUDY

Different authorities for an example Department of Agriculture Forestry and Fisheries (DAFF), Department of Environmental Affairs (DEA), Department of Water Affairs and Sanitation (DWS) have varying requirements that project developers have to comply with to ensure project authorisation (GIZ, 2015:38). The bureaucratic nature of the different authorities required to authorise PV projects leads to authorisation delay (GIZ, 2015:39). The main challenge of PV solar power projects deployment is the approval required from the different policymakers (GIZ, 2015:41). Each policymaker has different requirements; this supposes that multiple agencies should give authorisation for one PV solar project. PV solar power project developers are frustrated with having to approach multiple government agencies to authorise one project. The government needs to have regulatory processes that will encourage deployments of PV solar power projects (Hussain et al., 2017:1127). The intention of multiple regulatory procedures is to guard against unscrupulous installations of solar projects instead of preventing project development (Burkhardt et al., 2015:103).

The South African regulatory processes are defined but complex (GIZ, 2015:39). Project developers characterise the authorisation process as highly bureaucratic, with lots of red tape. The White Paper on Renewable Energy (Department of Minerals and Energy 2003:9) identifies legal, regulatory and organisational as some of the challenges that can prevent implementation of renewable energy technologies. The South African National Development Plan 2030 offers a strategic perspective on policy planning (Mqadi et al., 2018:67). Within the South African electricity sector, several strategies have been developed to support the energy generation agenda. The National Development Plan is a holistic government plan, with the purpose of assisting the South African government with planning in multiple areas, including policy planning. This document was developed in the Office of the President; Chapter 5 of the National

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Plan (NDP) 2030 emphasises policies that are coherent, suggests that there is a need for policy improvements and states several principles for improvement. A number of different planning tools are developed to assist with policy planning. Different departments, with different mandates, develop the policy planning documents; this suggests that these documents are developed based on a specific need or observation instead of a holistic one, which is problematic.

Further to the organisational and regulatory structure, the energy strategy supported by legislation is important in encouraging the deployment of renewable energy projects (Eleftheriadis et al., 2015:161). The National Strategy for Sustainable Development (NSSD) developed by the Department of Environmental Affairs (DEA) is worth mentioning. Priority No. 1 of the NSSD and Action Plan aids the alignment of plans, frameworks and strategies to improve sustainable consideration (DEA, 2011:16). This priority supports collective planning to enable alignment. The 2019 Integrated Resource Plan (IRP) developed by Department of Energy (DoE) is a 20-year plan that encourages the increase and use of renewable energy products in energy production to meet South Africa’s energy demands (DoE, 2009:8). The IRP also introduces the concept of the Independent Power Producer (IPP): privately-owned energy developments with a portion of private finance with long-term power purchase agreements (Eberhard et al., 2017:391). In addition to the NSSD and IRP, the New Growth Path and National Water Resource Strategy are also important in the electricity sector (Mqadi et al., 2018:67). The New Growth Path aims to increase green economy jobs, with a focus on renewable energy. The National Water Resource Strategy provides for the protection of water resource in power generation (DWA, 2013).

There are several electricity policies and plans, developed by different government departments, to support specific policy objectives (e.g. the White Paper on Energy Policy developed by the Department of Mineral Resources, the National Climate Change Response developed by the DEA, the Industrial Policy Action Plan developed by the Department of Trade and Industry). The development of plans by different departments with different mandates leads to weak coordination in electricity planning (Mqadi et al., 2018:67). This type of planning contributes further to the challenges of multiple regulatory processes, as these plans are developed in an uncoordinated manner. It will be useful to explore the challenges of the multiple regulatory processes for PV solar power projects that result from these uncoordinated plans. Current regulations governing renewable energy projects include guidelines to identify potential environmental impacts associated with PV solar projects (DEA, 2015).

The multiple regulatory processes required for PV solar power projects should not duplicate functions but promote cooperative governance as provided for in Chapter 3 of the South African Constitution (1996). Section 41(1)(h)(iv) of the Constitution (1996) emphasises the coordination

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levels of government (DoE, 2015:39). The National Environmental Management Act (Act 107 of 1998) outlines an Environmental Impact Assessment as an essential process that identifies potential environmental impacts of a project. The potential environmental impact assists with identification of the applicable legislation and the necessary authorisation required in terms of that legislation. Chapter 3 of the National Environmental Management Act (107 of 1998) (NEMA) also provides for cooperative governance when state entities develop environmental management and implementation plans. In addition to encouraging cooperative development of plans, NEMA highlights government institutions working together. Another fundamental challenge to authorising different activities is the vastly different legislative mandates of state entities.

1.4 RESEARCH OBJECTIVE AND RESEARCH QUESTION

The problem statement has assisted in the formulation of the following research objective: To identify the challenges associated with multiple regulatory processes for PV solar power projects

To achieve the research objective, the following research question and sub-questions requires answering.

What are the challenges associated with multiple regulatory processes for PV solar power projects?

Sub-questions:

1. What regulatory processes are required for PV solar power projects?

2. What are the challenges for project developers and regulators when dealing with multiple regulatory processes for PV projects?

The two sub-questions align with the main research question. The first sub-question is important in providing insight into the procedures used in regulating PV solar projects. Knowledge of these procedures is useful in understanding the challenges of regulatory processes. The second sub-question identifies challenges of multiple regulatory processes for PV solar projects.

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1.5 RESEARCH STRUCTURE

This section explains the structure of the research. The research has four distinct chapters that address the research question. Table 1-1 Research structure illustrates the relationship of the chapters to the research question.

Chapter 1: Introduction

This chapter outlines the research by providing a background and problem statement. The background and problem statement share insight into the topic and provide justification for the relevancy of the research. This chapter also provides the main research question and sub-research questions.

Chapter 2: Research methodology

The method of research used for the research, detailing the research design, data collection, and data analysis methods, forms part of this chapter. This chapter provides the details of the methodology used in answering the research question and sub-questions, and provides an outline of the research.

Chapter 3: Review of relevant literature

This chapter provides insights into previous literature on the challenges associated with multiple regulatory processes globally as well as for the renewable energy field and in the South African context specifically. This chapter also reviews literature on the South African legislative framework, particularly the prescribed authorisation processes for PV solar power projects. This chapter provides insight into the existing knowledge about the challenges associated with multiple regulatory processes.

Chapter 4: Case study and data analysis

This chapter firstly discusses and analyse different case studies in order to identify the regulatory processes for PV solar power projects. Then, the chapter compares and contrasts responses from interviews with regulators and project developers in the identified processes. The interviews aid in verifying the information obtained during the document review.

Chapter 5: Conclusion and recommendations

In concluding the research, it is vital to demonstrate whether the research questions are answered by the collected data and subsequent analysis. The recommendations provide findings to inform

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Table 1-1: Research structure

Research Topic: Understanding the challenges of multiple regulatory processes of photovoltaic (PV) solar power projects

RESEARCH STAGE CHAPTER RESEARCH QUESTION / SUB-QUESTIONS METHOD USE TO ADDRESS THE RESERCH

QUESTION AND SUB-QUESTIONS

Stage 1 Chapter 1:

Introduces the research topic and outlines its structure

Chapter 2:

Describes the different methods that used in the research

Provides background for the different areas of the research through literature

1. What regulatory processes are required for PV solar power projects?

2. What are the challenges for project developers and regulators when dealing with multiple regulatory processes for PV projects?

Literature Review of:

1. Information from South African legislative research for PV solar power projects

2. Review of relevant literature about PV solar power projects

3. Review of challenges associated with multiple regulatory processes

Provides for the analysis of the research results

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CHAPTER 2: RESEARCH METHODOLOGY

2.1 INTRODUCTION

According to (Sahu, 2013:2) research is a journey of discovery. It assists with identifying the various challenges encountered by project developers and regulators when authorising PV solar projects by applying existing concepts or proposing new concepts. This chapter aims to provide a description of the research design and methods for data collection and analysis (Fox et al., 2014:138). The relevant sections are research design, data collection methods, data analysis methods and the limitations of the research process. The research design highlights the research plan while the research methods details the methods that enable investigation of the topic. Lastly, the limitation of the research will help to identify issues that might limit the execution of the research. One of the shortcomings of qualitative research is establishing reliability and validity. This type of study is not repeatable due to it occurring in a natural environment (Simon et al., 2013:1). The EIA reports of the case studies will illustrate the types of authorisations required for PV solar power projects.

2.2 RESEARCH DESIGN

The challenge in identifying an appropriate research design for this study lies in the absence of an accepted systematic research method to evaluate the challenges of multiple regulatory processes for PV solar power projects. Since there is no standard methodology, it is vital to construct an approach enables collection of the appropriate data to lead to effective research development results. This study uses a qualitative research method. The qualitative research method places an emphasis on exploring and understanding different subject areas (Almaki, 2016:291). It is a useful approach to provide knowledge about stakeholder experiences (Levitt et al., 2017:2). For this particular research, the generation of data is in words instead of numbers (McCusker et al., 2015:537).

Qualitative research reflects on gathered data and then deduces conclusions about the context (Bonsal et al., 2018:1190). In this approach, research initiation from words provides significant demonstration of the idea (Pratt, 2009:856). The approach is to gather relevant data regarding authorization of PV solar projects in the different authorisation documents available in the sampled project files and interviewing the different individuals involved in the authorisation process. The weakness of qualitative research is a partial resolution by evidence from interviews

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data and analysis (Tuval- Mashiach, 2017:128). This assists the readers in understanding the source and type of research data. In this research, the data gathered assists in understanding the different challenges experienced with the multiple regulatory processes of PV solar power projects. This information lead to appropriate results that assists in formulating recommendations and conclusions.

An essential aspect of qualitative data is the fact that this type of data needs to have integrity and must be reliable and of good quality (Gaya et al., 2016:532). The integrity and reliability of data in this research is probable when authorisation of similar projects is done and the different regulatory requirements for different departments is established. This provides insights in the type of permits issued by different departments and allows for interrogation of the regulatory documents. The interviews also assist with establishing the integrity of the study because they provide perspective and experiences of the regulators and project developers these experiences are evaluated against the information gathered from the project files data. In addition to the identified data collection method, this study also perform a document review on selected case studies for PV solar power projects. A case study is a research strategy of the study; it comprises the different research methods, which might include qualitative (Kohlbacher, 2006:5). A case study investigates the present occurrence within the real life context (Unicomb et al., 2015:728). This implies that for this research previous authorization of PV solar projects are used as part of the case studies.

2.3 CASE STUDY RESEARCH

Case study research investigates an organisation or single individual. The investigation of an individual or organisation’s intention is to understand the researched topic better (Yurt et al., 2016: 970). Case studies depict real life experiences of an individual and the specific context of their situation (Hyland, 2016:121). Case study research involves examining one or more cases in a detailed data collection (Mostert, 2018:319). An advantage of case study research is that it does not include control of the variables but its basis is on understanding the context of the study area (Darke et al., 1998:275).

This study use the case study data to perform a comparative case study research. The comparison in this regard is the case study information with the literature reviewed information

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(Walliman, 2011:78). Case study evidence happens by means of documents, direct observation, interviews and old records (Yin, 2003a). The case study strategy can follow descriptive or exploratory objectives (Yin, 2013:322). The exploratory and descriptive objectives enable the researcher to interrogate the case studies to gain understanding of the researched area.

Guarding against manipulation of variables in this particular study, the study selects only eight authorised PV solar power projects for the years 2014 to 2016 in one particular region (the Northern Cape Province). The years 2014 to 2016 were selected because the data for these years is readily available at the DEA information repository and spans a single EIA regime. A request for information of PV projects approved from 2014 to 2016 was made to DEA; this request was in terms of Promotion of Access to Information Act (Act No. 2 of 2000). The approved application for access to information from DEA included the following information:

a. Database with a list of PV solar power projects in the Northern Cape, and

b. A disc with eight project files of the PV solar power projects approved in the Northern Cape for 2014 to 2016.

The database provided information on the type of application made, which included a basic assessment, Scoping and the Environmental Impact Assessment Report (S&EIR) information. The information on the basic EIA was not a focus of this study. The database for the research had information on the EIA project files and case studies. The EIA project files included specialist study reports, comment reports, public participation engagement records and the full details of the different case study project locations and descriptions. The eight authorised PV solar power projects EIA reports provided are analysed to gather the required information on the challenges of multiple regulatory processes.

2.4 STUDY AREA

The Northern Cape is the region of the study; it was chosen as it is one of the provinces with the best solar resource with high radiation not only in South Africa, but also the world (Aliyu et al., 2018:2506). The Northern Cape Provincial Spatial Development Framework for 2012 positions this province as a solar corridor that can extend from the Pixley ka Sene and Mgcawu ZF municipalities (DoE, 2015:42). The Northern Cape has aspirations to become a net producer to the whole of South Africa by 2020 (DoE, 2015:42). The Northern Cape being the best solar-resourced area means the region capitalises on these types of technology for electricity generation. In fact, the Northern Cape has the bulk of South Africa’s PV power plants, with 62.5%

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regulatory processes of PV solar power plants in this province. The favourable climatic condition of the Northern Cape assumes that this province will have a large concentration of PV solar power projects. It is important to note that approval for the construction of renewable energy projects in South Africa requires authorisation from the national authority while the provincial authority act as a commenting authority. The Northern Cape may also pose unique challenges with regards to authorisations required for example it’s close proximity to Square Kilometre Array (SKA) radio telescope.

The DEA was able to provide 10 authorised PV solar power projects for this research, but only eight case studies form part of this research. Only the eight case studies that followed an EIAR were selected for the study; the other two only required a basic assessment. The eight case studies have comprehensive EIA reports that contain information on the regulatory processes of all eight approved PV solar projects. Focusing the study on multiple years (2014 to 2016) is important to ensure that the study takes into consideration the regulatory changes that might occur during the selected years. The current EIA Regulations were updated in 2014 and have also been amended in 2017. Using information approved for 2014 to 2016 provides relevant and updated information for PV solar power projects’ regulatory processes.

The eight case study PV EIA reports was scrutinised to enable understanding of the regulatory processes while also gathering insights on the different challenges that might exist with this authorisation process. Challenges that are of interest include the authorisation chain of PV solar power projects (i.e. the alignment of the different regulatory processes) as well as the challenges that might lead to barriers in the authorisation of PV solar power projects. Figure 2-1 provides a map of the locations of the eight case studies for the research study.

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2.5 RESEARCH METHODS

Research methods is the utilisation of sets of tools for different kinds of investigations (Walliman, 2011:1). The research question is instrumental in steering the research to the type of appropriate method that should be utilised (Lehnert et al., 2016:529). The research question underscores the principles and course of an investigation (Alase, 2017:13), often directing the type of the research required (Klein, 2012:159). This implies that research methods do not occur in a vacuum, but rather that the research question and problem informs them.

Research methods provide a structure to qualify research as reliable and trustworthy (Shenton et al., 2009:29). The topic provides the direction the research should take, which in turn determines the research tools to utilise. To ensure understanding of the challenges of multiple regulatory processes of PV solar power projects, this section details the method of research.

Figure 2-2 illustrates the different tools applicable in the exploration of the research objective. The three tools of the research methods are literature review, document review and interviews. The chosen tools assists with the following:

a. Researched literature information on the multiple regulatory processes, b. Provide information about the projects authorisation process and

c. Collect perspectives on the challenges for PV solar projects authorisation processes from the different groups involved.

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Figure 2-2: Determining the research tools (own illustration)

2.5.1 Review of relevant literature

This section of research involves choosing source material and then extracting relevant information from the source (Badenhorst, 2018:121). A literature review provides a measured approach to explore the topic under research (Ward-Smith, 2016:253). It will critically observe what different authors say about a particular subject matter. It is useful to understand existing, relevant literature that supports the research. The type of literature review in this study is “Grey literature”. Grey literature is that which is not controlled by commercial publishers but produced at all levels of government, academics, business and industry (Ward-Smith, 2016:253).

Document review

Decision on the appropriate tools of investigation

Review of relevant literature Interviews

OBJECTIVE

To understand the challenges of multiple regulatory processes of PV solar power projects

How to achieve the objective?

International and local literature on multiple regulatory processes (i.e. legislation, guidelines and reviewed journal articles)

Project files, memoranda, and letters. All information relevant to the PV solar power projects regulatory process

Perspectives from regulators, specialists, and developers

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The consulted literature will provide information on the challenges experienced during multiple regulatory processes of PV solar power projects. To locate the relevant information, the following themes are useful:

1. Multiple regulatory processes

2. Challenges with multiple regulatory processes 3. Regulatory processes of PV solar power projects

4. Multiple regulatory processes challenges for PV solar power projects 5. Fragmentation of regulatory processes

6. Barriers to authorisation of PV solar power projects

7. Challenges of regulatory processes of PV solar power projects 8. Integration of environmental authorisation of PV solar power projects 9. Fragmentation of legislation and institutions

10. Opportunities to address challenges with multiple regulatory processes 11. Alignment of authorisation processes

12. Permitting costs challenges

Figure 2-3 provides the structure of the literature review. This structure aids in providing a systematic review of the different literature on multiple regulatory challenges for PV solar power projects.

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Figure 2-3: Structure of the literature review (own illustration)

Challenges of multiple regulatory processes for PV solar power

projects 1 Multiple regulatory processes International perspective on multiple regulatory processes South African legislative framework 2 Challenges of multiple regulatory processes 3

Opportunities to address multiple regulatory processes challenges

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2.5.2 Document review

A document review analyses written information about a particular topic (Yurt et al., 2016:970). It is also used to investigative existing documents to gather more data on the subject matter (El-Jardali et al., 2014:48). For the purpose of this research a request was made to DEA to access PV solar power projects records. Annexure A provides a DEA response letter that gives access to the requested PV solar power projects EIA records. A document review was done on the eight case studies with a full EIA process. The analysis and scrutiny of the EIA documents used in the regulatory processes of PV solar projects is essential to gain insight into the multiple regulatory processes. The EIA report is comprehensive as it has attachments that contain information about the project application process, with the different regulatory processes that are required in terms of other legislation as well. The comments and response reports outline the different authorities to be consulted for the authorisation of a PV solar power project. This will also assist in obtaining information on the practical implementation of the regulatory processes of PV solar power projects. Information about the different regulatory processes by state entities, gathered from this data, is in the comments reports. Observing the EIA with its attachments provides valuable insight into the type of disturbance a project will have on the environment and the regulatory authorisations that are required.

The evaluation of the different types of documents in this type of authorisation is essential in providing the overall view of the processes to be adhered to. The type of documents that will be useful in answering research sub-question 1 (What regulatory processes are required for PV solar power projects?) are:

a. Environmental management plans b. Comment and response reports c. Specialist reports

d. Final Environmental Impact Assessment Report

The above documents provide the necessary information about the nature of the project, the type of disturbances the project will cause on the environment and the different authorities to be consulted for project authorisation.

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Semi-structured interviews will allow for structuring questions to the interviewees. The interviewees will have the latitude to present new ideas when approaching the questions (Dadzie et al., 2018:6). Although these interviews are guided by the research objective, there is still a need to reflect on the interviewees’ perceptions, experiences and opinions (Cridland et al., 2015:78). This method of data collection will be important for acquiring the opinions and experiences of the relevant stakeholders involved in the regulatory process of PV solar power projects. The interviews will also serve as an important tool to clarify any uncertainties encountered during the document review. The interviewees are not necessarily involved in the case studies of the reviewed documents, but these individuals comprise a different category of people who have knowledge of the regulatory processes of PV solar projects.

An interview schedule (Annexure B) was developed to assist with the interview. The following groups are an important part of the interviewee group:

a. Proponents: Developers / Project Managers – 10 individuals were approached; only 3 agreed to be interviewed.

b. Specialists / Environmental Consultants – 7 individuals approached; only 1 agreed to the interview.

c. Regulators issuing authorisation – 12 individuals were approached; only 8 agreed to the interview.

The regulators interviewed include national, provincial and local government offering primary environmental authorisation. Department such as the DEA, the Department of Agriculture Forestry and Fisheries (DAFF), the Department of Water and Sanitation (DWS) and Municipality will be part of the interview sample. The interview data will be analysed by comparing the responses from the interview group. The views of the different role players may differ, and it will therefore be useful to compare the responses of the regulators against those of the other group (developers, project managers and environmental consultants). Informing the regulators’ responses is the knowledge of policy development and authorisation procedures. Informing the developers’ responses is their different experiences with project authorisation. An interview questionnaire (Annexure C) will assist with the interviews, which will broadly cover the following areas:

1. Which company do you work for? 2. What is your position?

3. How many PV solar projects have you been involved with?

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6. To what extent are government processes aligned for PV solar power projects?

7. What changes do you think should be made in the multiple regulatory processes of PV solar projects to assist in addressing the different challenges accompanying this process?

8. What are the relevant procedures required for PV solar projects authorisation and which departments play a role in these procedures?

Table 2-1 provides a link between the research question and sub-questions and the interview questions. This link illustrates the importance of a focussed research question to enable development of the research questionnaire.

Table 2-1: Alignment of the research sub-questions and the research interview questionnaire

2.6 LIMITATIONS OF THE RESEARCH

One of the identified limitations of this study is that despite the EIA reports review process for the eight selected case studies, the different role-players who participated in the preparation of these EIA reports and the different authorities who approved the specific projects were not part of the

RESEARCH QUESTION

What are the challenges associated with multiple regulatory processes for PV solar power projects?

Sub-research questions Interview questions

1. What regulatory processes are required for PV solar power projects?

8. What are the relevant procedures required for PV solar projects authorisation and which Departments will play a role?

2. What are the challenges for project developers and regulators when dealing with multiple regulatory processes for PV projects ?

5. What challenges were experienced in your PV solar power project authorisation processes? 6. To what extent are government processes

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collection method of the research. This enhancement will ensure research data validity and reliability.

The above limitation of the research does not result in the non-execution of the research since the researcher was able to collect quality interviewee responses that could be analysed in order to make conclusions and recommendations. Highlighting the limitation of the research informs future research.

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CHAPTER 3: REVIEW OF RELEVANT LITERATURE

The purpose of this chapter is to review the relevant literature that assists with information about the challenges related to multiple regulatory processes. The literature review includes local and international information searches about the research topic.

3.1 INTRODUCTION

The objective of regulatory processes is to support energy provision improvement for the energy sector, but the multiple authorisations required may be unfavourable because of the guidelines and procedures that result in administrative barriers (Humes et al., 2012:4 & Giz, 2013:5). The primary objective of policies and regulations in the sustainable energy sector is to reduce barriers to energy improvements (UNEP, 2007:28). Government authorities regulate activities through numerous processes that require approval prior to any development or activity (Hui, 2017:180). The developers regard the approval process as an environmental management tool that demonstrates methodical insufficiencies (Rabe, 1995:209). The methodical insufficiencies are brought by the fragmented way of issuing permits for authorizing PV solar projects by the different authorities. Government authorities are often not transparent in their regulatory processes (Hui, 2017:180 & Crow et al., 2016:90). Transparency in this case means the information is not easily accessibility about government policies, action and structure (Glicksman et al., 2018:376). The uncoordinated regulatory procedure is an institutional and regulatory obstacle that results in very long waiting periods for project licenses (Aliyu et al., 2018:2515). Government policies are central to the advancement and sustainable implementation of renewable energy projects (Mondal et al., 2016:1120). The biggest test for regulators and policymakers is to develop policies that will promote reduction of environmental impacts without regulatory processes hindering development (Taylor et al., 2013:489). Environmental regulations purpose to lessen negative environmental impacts (Li et al; 2018: 1330). Environmental policies empower regulators to act against individuals who may harm the environment (Ishak et al., 2010: 11).

Although the multiple regulatory processes of renewable energy projects such as PV solar are essential for environmental planning, the higly-regulated environment might have a negative impact on potential investment in the renewable energy sector (Guerin, 2017:348). The absence

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The next section provides local and international views on the challenges of multiple regulatory processes.

3.2 CHALLENGES OF MULTIPLE REGULATORY PROCESSES

This part of the research addresses research sub-question 2.

2. What are the challenges for project developers and regulators when dealing with multiple regulatory processes for PV solar power projects?

Authorities in the different spheres of government implement regulatory processes in a conflicting manner which is non-complementary (Yee et al,, 2016:97 & Scotford et al., 2013:390). Administration of the regulatory processes is done by different levels of government; this type of administration structure leads to duplication of functions (May, 2005:214). The non-integration of multiple regulatory processes results in the absence of linking of activities and policies across government organisations (Soma et al, 2015:6). The challenge is regulatory approval involving regulatory processes that are unable to guide and assist long-term planning (Ansari et al., 2013:167). Challenges of regulatory processes can also include procedural fairness applied in decision-making (Porumbescu et al., 2018:903).

The developing of policies for regulating renewable energy projects is inconsistent (Yenneti, 2016:47). Government policy for solar power deployments is poor (Ansari et al, 2013:167). Furthermore, to authorise renewable energy, projects require multiple permits (Hussain et al., 2017:1127). The developers of PV solar projects require land use permits from which can take years for developers to obtain some concessions due to weak evaluation methods (Haas et al., 2018:406). For example, the approval process of PV solar projects in countries such as Australia can include complying with up to 296 conditions, which can be agonising at times (Guerin, 2017:95). Another example is Chile, where an environmental assessment is necessary for an environmental permit and such a permit can take a long time to receive (Haas et al., 2018:406). The multiple regulatory processes delays lead to an increase in the cost of PV installations (Haas et al., 2018:406). The requirement of multiple regulatory processes results in developers experiencing great delays and high costs because of weak legislation (Haas et al., 2018:406). This literature review reveals that developing countries frequently lack a single regulatory framework that promotes solar power plant deployments (Shahsavari et al., 2018:285). The

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projects differ from country to country (IFC, 2012:9). Although the authorisation requirements are different, the following authorities are usually consulted across countries (IFC, 2012:9):

a. Local and / or regional planning authority b. Environmental agencies / departments c. Archaeological agencies / departments d. Civil aviation authorities

e. Local communities

f. Health and safety agencies / departments g. Electricity authorities

h. Military authorities

The above authorities forms a list of authorities relevant in PV solar power projects development authorisation. The challenge with having this type of a system is the involvement of multiple government institutions with different requirements and timeframes for issuance of permits. The involvement of different government institution in the authorisation process of a project leads to the challenges of fragmentation, non-alignment of authorisation processes, increase in authorisation time and cost.

3.2.1 Fragmentation: Legislative and Institutional

The absence of a single legislation, lack of communication and lack of coordination are all systematic issues that are caused by fragmentation in multiple regulatory processes of a project.  Absence of a single legislation

The challenge noted in the enforcement of regulatory processes is due to a fragmented bureaucratic structure that results in multiple influences with competing priorities (Lo et al., 2006:389). Multiple regulatory processes can be a challenge to the promotion of solar power installations because of legislative fragmentation (Ansari et al., 2013:167). Fragmentation of regulatory process occurs when the different government bodies regulate similar environmental problems without working together (Scotford et al., 2013:389). Fragmentation refers both to procedure and an outcome (Tamar, 2019:118). It also presents a challenge in the absence of a comprehensive single policy for regulating PV solar projects (Rathore et al., 2018:2712). The authorisation of PV solar power projects follows a multi-level governance structure owing to different laws central to the authorisation process (Strupeit, 2016:452).

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provincial and local—which have different legislation and institutional structures (Gel’man, 2016: 102). The approval requirements from different spheres of government means that for a developer to be compliant, authorisation will be required from national and local authorities (Budzianowski et al., 2018:166). The different government departments have unclear responsibilities, which in turn results in fragmentation, adding to the complexities of regulatory processes (Liu et al., 2018:192). The use of primary and secondary environmental laws suggests that the authorisation for these types of projects will be required from different government departments instead of one (Schumacher, 2017:103). Although fragmentation might serve as an increase in controls in multiple spheres of government, it also poses some challenges. Regulatory fragmentation has an effect of preventing the flexibility of stakeholders to develop integrated strategies (Margerum et al., 2016:38).

South Africa’s colonial and apartheid eras introduced separation in administration processes in the different government spheres. i.e. local, provincial and national (Kotzé, 2016:89). This separation in administrative processes resulted in legislative and institutional fragmentation (Oosthuisen, 2012:49). Fragmentation in environmental legislation is not specific to South Africa but observed in other developing countries with a colonial history (Nel et al., 2001:2). This type of fragmentation relates to environmental Acts, developed independently; these Acts can be contradictory in some instances. This type of fragmentation results in overlapping authority requirements that might be unclear (Kotzé, 2006:79). The South African regulatory processes of PV solar projects illustrate horizontal and vertical fragmentation, since PV solar power projects are regulated by different environmental legislation implemented at the national, provincial and local spheres of government.

 Lack of coordination

One of the main obstacles to the development of renewable energy projects is the existence of different departments with uncoordinated authorisation processes (Sindhu et al., 2016:335). The current policies used in PV solar authorisations are not coordinated among different government authorities (Karakaya et al., 2015:64). This coordination problem is attributed to the current government structure that encourages functions that are independent from each other (Azhoni et al., 2017:825). The inability of state entities to coordinate authorisation processes jeopardises this development and discourages investment in PV solar projects (Olawuyi, 2013:110). Furthermore, it presents a challenge that potentially prevents implementation (Alam et al., 2018:197). Coordination of authorisation processes ensures the communication of decisions between the different decision-makers (Marquardt, 2017:7).

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The most visible challenge of implementing renewable energy projects is the communication between government authorities regarding their regulatory processes (Abdmouleh et al., 2015:1188). The challenge of multiple regulatory processes includes consistency, which is undermined by the existence of different institutional frameworks, a lack of communication and different organisational targets (Weitz et al., 2017:166). Different authorities need to be consulted as per their legislative mandates in authorising PV solar projects. Institutions play a fundamental role in the development of strategy and policy (Mondal et al., 2016:1120).

3.2.2 Alignment of authorisation procedures

The contradictory rules and duplication of functions applied by the different government authorities during the authorisation procedures is caused by mismatching of policy objectives by government entities (Cheon et al., 2013:386).

 Contradictory rules

According to Naidoo (2013:386), it is difficult for government entities to align authorisation processes as a result of incompatible policy goals. The non-alignment of regulatory processes leads to ambiguity in the rulemaking system (Liu, 2018:170). This argument supports Ohunakin et al.’s (2014: 300) view that the obstacle to solar energy deployment is conflict in government policies at different levels of government. Non-aligned regulatory processes provide a series of challenges in the implementation of renewable energy policy (Marquardt, 2017:7). The National Development Plan and the Integrated Resource Plan are South African policy planning documents from which the development of different policy documents was possible within the electricity sector. The difference in priorities among different departments results in electricity planning that is inconsistent (Mqadi et al., 2018:67). Inconsistent planning of policies leads to contradictory regulatory processes that are not aligned within the government departments (Mqadi et al., 2018:67).

 Duplication of function

The duplication of functions adds to regulatory complications of the vertical and horizontal fragmentation at the different levels of government (May, 2005:214). The Assessment

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3.2.3 Time and cost

The government authorities responsible for PV solar project authorisation should take cognisance of the fact that lengthy regulatory processes have a cost attached, which the project developer will need to be recover in future (Lüthi, et al., 2012:1008). Recovering such costs leads to higher costs in the deployment of this type of technology (Lüthi et al., 2012:1008). The multiple regulatory processes result in project developers incurring high costs and administrative processes that are time-consuming and unreliable (DoE, 2015:39). The various departments involved in authorisation charge different fees for each of their permits. Thus, permitting procedure adds significant costs to the deployment of PV projects (Dong, 2013:532). By comparing ideas from Lüthi et al, (2012:1008) and those of the DoE (2015:39), it is clear that costs and time are a factor in the regulation of these projects. The varying times and costs of different authorities makes it difficult to establish the overall time and costs a project requires for authorisation. This argument is also supported by Hu et al. (2018:738), who mentions lengthy that permitting requirements and alignment of authorisation processes due to different authorities with no clear timelines on their authorisation leads to an increase in project development timeframes. Mundada et al. (2016:462) maintains that the process of applying for the PV solar project installation is excessively time-consuming. Some of the challenges include different documentation and different application procedures, which result in complicating the process and increasing permitting fees (Burkhardt et al., 2015:103).

3.2.4 Non -integration of authorisation processes

According to Velte et al. (cited by Flynn et al., 2019:1257), the effective implementation of regulatory processes is dependent on the various regulators’ ability to function outside their silos. The non-integration of the assessment process challenges the decision-making process (Sucrase et al.,2002: 286). The different government entities will not be able to implement the multiple regulatory processes if these processes are in conflict (Sucrase et al.2002, 286). Multiple regulatory processes present as a challenge when government is unable to implement the required authorisation (Mercure et al., 2019:238). The lack of coherent regulatory processes discourages cooperation between government departments, making integration impossible (Kivimaa et al., 2006:730). The regulatory processes issued by different government entities are limited and lack integration with other authorisation processes (Rabe, 1995:209). Hill (2000:50) maintains that the principles of integration of authorisation environmental management are impossible when decision-making is spread across the different spheres of government. Table 3-1 provides a summary of the different challenges identified. These challenges are supported by the literature reviewed. The different authors are indicated for the different identified challenges.

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3.3 THE REGULATORY CONTEXT

This part of the research addresses research sub-question 1:

1. What regulatory processes are required for PV solar power projects?

The challenges of multiple regulatory processes for PV solar power projects point to the fact that renewable energy projects such as PV solar projects have certain environmental impacts that require management by multiple regulatory processes. These regulatory processes are unfortunately spread across different regulatory agencies or departments, which leads to the project developer having to request authorisation from multiple departments for one project. Although these departments are all bureaucratic in nature, they function differently.

3.3.1 Multiple regulatory processes

Regulatory processes are administrative rules that have an impact on activities or an organisation (Rangone, 2018:488) and are intricate enforcement activities spread across different regulators (Baldwin et al, 2008: 61). According to Alexander (2015:78), these processes implement rules that set parameters for behaviour. These multiple regulatory processes enforce restrictions on individuals’ behaviour and are command and control regulations (Taylor et al., 2012:274). Policy makers have the responsibility of selecting appropriate tools that can reduce risks and the regulatory process bureaucracy (Taylor et al., 2019:812). The regulatory approval process is difficult and often poses a challenge with public acceptance (van Putten et al., 2018:4).

3.3.2 Acts relevant for the regulatory processes of PV solar power projects

Section 24 of the South African Constitution (1996) states that green issues (natural resources) and brown issues (human health) are equally important (Du Plessis, 2015:1848). This section supports the idea of developments that are not harmful to the environment or human health. Chapter 3, Section 41 of the Constitution (1996) further advocates that government goals can be achieved through intergovernmental relation mechanisms (Nzimande and Ntshakala, 2015:824). This concept of intergovernmental relations is supported by Chapter 3, Section 12(a) ii of the National Environmental Management Act (Act No. 107 of 1998), which deals with procedures for cooperative governance. According to this provision of the Act, there should be consistency in the application of actions that affect the environment.

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policy development assist in circumventing some of the unintended effects of the past administrative regime. The Intergovernmental Relations Framework Act (Act No. 13 of 2005), section 37 and 38, provides for coordinated intergovernmental relations in all spheres of government. This provision illustrates the importance of coordination between the different levels of government in order to ensure the effective coordination of regulatory processes. Sections 27 and 28 of the Intergovernmental Relations Framework (Act No. 13 of 2005) suggests mechanisms such as development of forums that can be used to enable the required coordination among the different spheres of government.

Section 24 of Chapter 3 of the Constitution (1996) furthermore provides a mandate for environmental framework legislation, namely NEMA (Nel et al., 2001:2). This section of the Constitution provides for the right of a healthy environment for every citizen, and the government’s responsibility is to ensure compliance to achieve a healthy environment. NEMA, as a legislative framework that forms part of the primary environmental legislation, makes provision for an assessment to obtain an environmental authorisation. It provides wide-ranging legal structure for dealing with environmental issues (Nel et al., 2001:2). Chapter 5, Section 24 of NEMA provides for environmental management tools to ensure integrated environmental management. It further provides for environmental authorisation with EIA as one of the environmental management instruments and advocates for environmental protection. It is this provision that promulgates other relevant environmental Acts, such as the Water Act (Act No. 36 of 1998), Biodiversity Act (Act No.10 of 2004) and any other enforceable Act to assist with environmental protection.

The DEA’s EIA guideline document for PV solar power projects provides guidance on the various potential impacts of PV solar power projects and the authorisations required for identified impacts (DEA, 2015:17). An EIA assists with the evaluation of environmental impact of a proposed project and identifies any additional environmental authorisation needed (Phillips, 2013:438). An EIA process becomes a mandatory process that evaluates the environmental outcomes of a proposed project (Židonienė, 2016:9). Table 3-2 provides guidance on the type of regulatory processes for PV solar power projects authorisation and lists 11 potential environmental impacts associated with such projects. The identification of these impacts assists in aligning the relevant legislation applicable for the management of the environmental impact. The reflection of relevant applicable legislation is in column 2 of the table. Column 3 of the table provides information on the authorisation decision (i.e. type of approval), while the last column identifies the different authorities necessary in this regulatory process.

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Table 3-2: Potential environmental impacts of PV solar energy projects adapted from EIA guideline for renewable energy projects (DEA, 2015)

Applicable legislation Issued license / Permit Potential impact Authorising department PRIMARY ENVIRONMENTAL LEGISLATION National Environmental Management Act

EIA approval Visual impacts, noise Department of Environmental Affairs NEMA: Waste Management Act, 59 of 2008 s45 Waste management license Hazardous waste generation Department of Environmental Affairs National Environmental Management: Air Quality, Act 39 of 2004 Atmospheric permission license

Visual impacts Department of Environmental Affairs National Environmental Management: Biodiversity Act, 10 of 2004

Biodiversity consents Impact on biodiversity Department of Environmental Affairs SECONDARY ENVIRONMENTAL LEGISLATION

National Water Act, 36 of 1998

Water use license Impact on water resources Department of Water and Sanitation Subdivision of Agricultural Act, 70 of 1970

Land use planning Loss of Agricultural land

Department of Agriculture Forestry and Fisheries Minerals and Petroleum

Resource Development Act, 28 of 2002)

Consent from Department of Energy Sterilisation of mineral resources Department of Mineral Resources Spatial Planning and

Land use Management Act, 16 of 2013

Land use planning Land

transformation Department of Rural Development and Land Reform Local authority – authorisation

Building plans approval Land

transformation

Local government Municipal bylaws Different impacts Municipalities Public Private Partnership

Agreement

Department of Energy Civil Aviation Act, 13 of

2009

Civil Aviation Commission authority Aircraft interference Civil Aviation Authority National Heritage Resources Act, 25 of 1999

Heritage authority consent Impact on cultural heritage

South African Heritage Resource Agency

Grid connection ESKOM

An EIA, together with the various environmental laws are required at the initial stage and forms part of the primary environmental laws used in the approval process of renewable energy projects (Schumacher, 2017:102). The primary environmental legislation in the table is all the initial environmental legislation of which the DEA is custodian. These authorisations might include

Understanding the challenges of multiple regulatory processes for photovoltaic (PV) solar power projects