WATER-USE LICENCES AND HYDROPOWER

The Department of Water and Sanitation (DWS) has revised its hydropower policy to enable utilisation of its infrastructure and water resources for renewable energy generation.

The regulatory environment for energy in South Africa has changed; there are now more opportunities for independent power producers to produce electricity. There is therefore a growing interest in using water to generate electricity.

The DWS is solely responsible for supplying Water Use License Applications (WULAs) for the use of water resources and infrastructure to generate hydropower as an alternative energy to supplement the current available electricity.

Infrastructure can be dams, barrages, weirs, irrigation systems (canals and conduits), as well as run-off river schemes as potential sites for hydropower, solar and wind generation.

Usage of water resources for hydropower, solar and wind generation will follow the currently existing regulatory framework defined in the National Water Act (No. 36 of 1998).

Policy considerations

“We have a duty to ensure that the nation’s water resources are protected, used, developed, conserved, managed and controlled. We will therefore support the development of hydropower as part of both social and economic development within the context of water scarcity and water infrastructure challenges. We will not compromise on sustainable protection of water resources and water and sanitation services provision,” explains Dr Sean Phillips, director-general, DWS.

The DWS will charge cost-reflective tariffs for the usage of the water infrastructure and the water resource. Tariffs will be informed by water resource management, infrastructure management principles and optimum functional requirements. The tariff will also be aligned to the maximum plant capacity.

Non-consumptive water use charges for both hydropower and floating solar photovoltaic technologies will be guided and achieved through the DWS’s pricing strategy in consultation with National Treasury and relevant institutions.

Compulsory compliance and nonnegotiable adherence to all DWS dam safety standard requirements will form part of water-use licence and/ or concession agreements related to renewable energy generation, using DWS infrastructure.

The DWS will inspect facilities regularly to monitor risks of compromising water security and dam safety. The inspection process will, among others, look at instrumentation, equipment maintenance, reading frequency and procedures, including activity level procedures.

In the rare event that safety is compromised, this should be reported to the DWS in the prescribed format.

We have a duty to ensure that the nation’s water resources are protected, used, developed, conserved, managed and controlled.”

WULA

“We are not going to provide any financial support to the applicants, during application, construction, operations and maintenance. We are not going to be involved in any of the Eskom processes or own any electricity production. The Department will solely be responsible for WULAs and will ensure that the application processes are competitive, fair, transparent and underpinned by the spirit of equity allocation of water resources in line with the National Water Act,” says Phillips.

The WULA will have three phases:

1. A pre-application phase opened on 17 April 2023 and is ending on 30 June 2023. All notices or requests for pre-application engagement must be submitted by not later than 19 May 2023. Any person who intends to apply for a water-use authorisation under this programme must initiate a preapplication engagement with the DWS by means of the e-WULAAS.

Upon receipt of the notice/request for preapplication engagement, the DWS will assign a case officer. The response time of the DWS to a request for pre-application is five working days. The pre-application engagement, including a site inspection, must be completed within 25 working days. Applicants who will not be able to start or successfully complete the preapplication phase will not be eligible to proceed to the second phase.

2. Application compilation and submission ends on 31 January 2024. Following a letter of information issued during the pre-application phase, the applicant will start the process of compiling an application. Applications that do not contain all the information listed in the letter of information requirements will be rejected.

3. Application processing, decision and communication by the DWS. The applications that are accepted will be subjected to processing by the DWS. If there is more than one application on one site, the DWS will only communicate its decision when all applications on that site have been processed. The DWS will take maximum period of 90 working days to process the applications.

“Once the decision has been made by the DWS to grant a licence for hydropower generation, the licence will last for a maximum of 40 years. The conditions of a licence specify that the construction should start within the stipulated time frame following issuance. It should, however, be noted that all the applications should comply with the conditions of a licence to avoid the suspension and withdrawal of the licence according to Section 54 of the National Water Act,” says Advocate Sipho Skosana, chief director: WULA, DWS.

HIPP

The DWS has initiated the DWS Hydropower Independent Producer Programme (DWS HIPP) in an effort to allow for the available infrastructure and water courses to be used to contribute to the power grid with renewable energy.

The programme is in response to the Energy Action Plan as announced by President Cyril Ramaphosa to enable the production of renewable energy as an alternative source of energy to supplement the currently available electricity and contribute to tackling South Africa’s power crisis.

The types of hydropower technologies that can be applied for include impoundment, river diversion or run-of-river, pumped storage, and floating or kinetic turbines (small-scale generating capacity). In addition to the above, applications for floating solar panels can also be made.