Eskom’s energy supply can be supplemented by the mining sector

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Member companies of the Minerals Council South Africa reported that they had 3,900 MW of renewable energy projects worth an estimated R60 billion (about $ 3.79 billion), which if built , would ease the pressure on Eskom and go a long way in meeting the industry’s commitment to achieve net zero carbon emissions by 2050.

Eskom CEO Andre De Ruyter told a parliamentary portfolio committee on November 17 that the utility needs to add an additional 4,000-6,000 MW of generation capacity to conduct a reliable and efficient maintenance program that will not disrupt not the national electricity supply.

The mining industry is involved in various stages of plant construction, conducting studies, planning and applications for up to 3,900 MW of solar, wind and renewable battery projects that could provide Eskom some of that much-needed additional capacity, said the CEO of the Minerals Council. , Roger Baxter.

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“There is an urgent need for the mining industry to supplement Eskom’s electricity supply. But the benefits extend to diversifying the supply, reducing exposure to continuous price increases, unpredictable supply and reducing emissions from scopes 2 and 3 in line with the industry’s commitment. achieve a goal of net zero carbon emissions by 2050, ”said Baxter.

Minerals Council member companies have increased the number of renewable energy projects and the result is a 146% jump in electricity generation from the 1,600 MW forecast the industry talked about in 2020. The concession without license for integrated generation up to 100 MW has been a factor in this increase and it is probably the government’s biggest structural reform in two decades, Baxter said.

“Renewable energy projects in the mining sector could go a long way in relieving pressure on Eskom for the benefit of other industries and the country as a whole. These projects must be accelerated through a smart band system. Environmental authorizations are too long and should be significantly shortened. In addition, policy issues related to freight charges and excess withdrawals to other users are necessary, ”he said.

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Electricity prices have increased more than six-fold in a decade and are now the second cost driver after wages in deep, power-intensive mines. In total, renewable projects will account for around a third of the mining sector’s annual electricity consumption.

The mining industry will not completely replace the supply of Eskom, which needs 24-hour basic electricity to operate mines safely, productively and efficiently, which renewable energy sources are not. able to provide currently. Eskom will remain a major supplier of basic electricity for mining for many decades. The 3,900 MW of the sector are purely complementary and will not detract from Eskom’s 24/7 critical base capacity.

The government’s carbon tax will add billions of rand in additional spending for mining companies. A 2019 study of 18 large mining companies indicated that they would have to pay more than 5 billion rand (about $ 320 million) per year during phase 2 of the tax.

The renewable energy projects will reduce carbon tax exposure, make mineral production greener and provide a new but limited source of cheaper electricity, helping to stabilize Africa’s strained electricity supply. South, which is characterized by frequent and unpredictable power cuts due to the aging and unreliability of Eskom’s fleet of power plants, and the inability to bring the new Medupi and Kusile plants to sustainable performance.

“The Minerals Council reiterates its support for Eskom CEO Andre De Ruyter and the management team who are doing whatever it takes to repair and maintain Eskom’s assets. Their departure at this critical juncture will only exacerbate the problems within Eskom and for the country, at a time when we can least afford further setbacks in efforts to restore and stabilize the electricity supply. Baxter said.

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Among the constraints for the mining industry in approving and constructing their own renewable energy projects are the 18-month environmental impact assessment requirements, lack of clarity regarding the use of transmission d ‘Eskom to transport or send electricity from these plants to their mines, the sale of excess electricity in the national grid and the limited capacity of transmission lines in provinces such as the North Cape (solar), the Western Cape (wind) and the Eastern Cape (wind power) to supply the interior provinces.

“Measures that could be used to accelerate mining sector investments in renewable energy projects include putting in place emergency tax incentives (such as an income tax depreciation equivalent S37E ), shortening of environmental clearances and grid connection processes related to Eskom, providing a clearer framework for transfer to the national grid and ensuring a shortened smart band process, ”said Baxter.


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