Mining companies dump Eskom 

Mining companies in South Africa have seen a boom in solar installations over the past few years, with over 200 MW of solar power registered with the National Energy Regulator of South Africa (Nersa).

According to data from the Outlier, between May 2019 and 2024, 16 mining companies registered 242 MW of private electricity generation with Nersa. Of these registrations, 93% were for solar power.

The Outlier found that Harmony Gold has the highest number of registrations for private solar power at 144 MW for its mines in the Free State. In second place is Glencore, with 60 MW registered.

In 2023, Harmony Gold said its solar installations would save the mining company R425 million a year in electricity costs and help it reach net zero by 2045. It plans to finish installing solar power at its mines by 2025.

The only mining company to install a power source other than solar was Samancor Chrome, which registered 17 MW of gas electricity for its Gauteng smelter.

The province with the highest number of registrations by mining companies is Gauteng, where seven out of 20 companies registered private power generation with Nersa.

Mining companies’ shift to solar energy comes after years of Eskom’s failures, which have harmed industry production.

Mining is an energy-intensive industry, and Eskom’s load-shedding and load-curtailment have severely undermined real mining production in South Africa.

Minerals Council SA chief economist Hugo Pienaar said Eskom’s load-shedding and load-curtailment have harmed mining production in South Africa.

Pienaar said that in November 2023, the country’s real mining output was still almost 4% below its pre-Covid-19 level in December 2019.

While Eskom’s failure to supply sufficient electricity consistently is not the only factor weighing on the sector, the link between higher stages of load-shedding and lower mining output has been well-documented.

South Africa’s mining industry is critical to the economy. It is a major employer and taxpayer and is also one of the most energy-intensive sectors in the country.

In March 2023, Fitch published a report on the impact of load-shedding on multiple sectors in South Africa.

It revised its assessment of mineral production growth forecasts from 0% to -1% year-on-year for iron ore and from 2% to -2% for platinum.

Solar boom in South Africa

The mining industry’s shift to renewables is part of a broader, nationwide trend of companies and households ditching Eskom in favour of alternative power solutions.

This growth in solar installations across the country means South Africa is expected to become the world’s tenth-largest solar photovoltaic (PV) market in 2024.

According to the report, the global PV industry added about 444 GW of new capacity in 2023 internationally, a 76% increase from 2022. 

In addition, solar module prices are at record lows, and there is a plentiful supply of components. Therefore, installations this year are expected to top 520 GW globally.

In South Africa, Eskom estimates that rooftop solar additions totalled 2.6 GW in 2023.

However, the BloombergNEF database tracked an additional 676 MW, bringing the total for 2023 to about 3.3 GW.

The report expects rooftop solar to grow in 2024, particularly in the winter months of May, June, and July, when load-shedding is more frequent and severe. 

Residential solar demand is linked directly to load-shedding and slows down as soon as load-shedding stops. The report also expects business adoption of rooftop solar to accelerate.

In South Africa, demand for solar products peaked in mid–2023, when the country experienced its most intense and frequent load-shedding.

Demand skyrocketed at the beginning of 2023, with R3.6 billion of solar panels imported in the first quarter alone. 

This was followed by a record second quarter, with R8.4 billion worth of solar panels imported. 

This was partly due to the fear of increased load-shedding during winter, with warnings that the country would likely hit stage 8 load-shedding and beyond. It was also the quarter where the rooftop solar tax break came into effect.

Sustained demand has created local business opportunities, and a local solar panel manufacturing industry is potentially emerging. 

Since 2010, South Africa has imported close to R40 billion worth of solar panels. Imports were initially supported by government investment into renewables but are now primarily supported by private investment.