South Africa

The private sector could be Eskom’s saviour

The Minerals Council South Africa released a statement urging for more rapid private sector participation in resolving the country’s deepening electricity crisis, as many speculate that the worst is still to come.

The council says its members have 6,500MW of energy which will help ease demand pressures on Eskom.

It also said that it supports president Cyril Ramaphosa’s electricity recovery plan to stabilise the country’s electricity supply, including the stabilisation and normalisation of Eskom.

However, the plan’s implementation is sluggish, and there is still unnecessary red tape holding back the private sector’s ability to participate in South Africa’s energy generation.

“There has been encouraging progress from the government around the time it takes to register private renewable energy projects, access Eskom’s grid, and relax environmental permitting,” said Minerals Council CEO Roger Baxter.

“But there are still unnecessary bottlenecks that are delaying investments,” he added.

The council, fellow business groups, and energy users have raised these with the presidency and relevant ministers.

The much-anticipated removal of the 100 MW threshold was gazetted by the minister of mineral resources and energy at the beginning of September 2022.

Removing this restriction means that any generation facility of any size or capacity will be exempt from licencing with the National Energy Regulator of South Africa (NERSA).

However, this proposal has come late, and South Africa’s energy supply needs are in a critical state.

“We had Stage 6 load-shedding 2-and-a-half years ago, and only now are we thinking of going to the market to find out what is out there for us to use,” said energy analyst and MD at EE Business Intelligence Chris Yelland.

“We need to treat this as an emergency, and it’s important that the President signals that he is concerned with the need to end load-shedding now,” he added.

How Minerals Council SA can help Eskom and the national grid

The Minerals Council is a mining industry employers’ organisation that supports and promotes the South African mining industry.

Members of the Minerals Council South Africa have 6,500 MW (6.5GW) of embedded energy projects in the pipeline, which could ease demand pressures on Eskom.

It is significant considering Eskom CEO André de Ruyter said the utility needs up to 6GW of additional electricity supply so its teams can conduct effective maintenance programmes on its fleet of ageing power plants.

“We know load-shedding will be a risk for the next two years, and we need a supplemental supply from the private sector on stream as quickly as possible,” Baxter said.

The 89 embedded projects by 29 mining companies in the pipeline are worth more than R100 billion.

These projects are part of the more than 8GW of energy projects the private sector has planned, taking advantage of the removal of the 100MW cap on licence-free embedded energy projects.

The energy projects in the mining industry are primarily for self-use as the sector strives to be a net-zero carbon emitter in line with commitments by its global peers by 2050.

However, these projects are significant as they can provide the national grid substantial relief from demand pressures once operational.

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