The Minerals Council South Africa has announced that its member companies have earmarked $3.7 billion for renewable energy projects to deliver as much as 3,900 MW to help meet the industry’s commitments of achieving net-zero carbon emissions by 2050.
Minerals Council CEO, Roger Baxter, indicated that renewable power projects could help supplement supplies from struggling, state-owned power utility, Eskom, and that the mining industry is currently involved in conducting studies, planning, and applications for solar, wind, and battery storage projects.
Eskom CEO, Andre De Ruyter, told a Parliamentary Portfolio Committee that the national power utility would require between an additional 4,000 MW and 6,000 MW of generating capacity to effectively maintain its existing power stations without disrupting the country’s national electricity supply.
According to Baxter, Minerals Council members have been increasing the number of renewable energy projects to power their operations, resulting in a 146% increase in electrical generation compared to the planned 1,600 MW targets set by the industry in 2020.
“There is a pressing need for the mining industry to supplement Eskom’s electricity supply,” Baxter stated, adding, “But the benefits extend to diversifying supply, reducing exposure to continued high increases in prices, unpredictable supply, and to reduce Scope 2 and 3 emissions in line with the sector’s commitment to reach a target of net-zero carbon emissions by 2050.”
The licensing-exemption concession for embedded generation of up to 100 MW made earlier this year by the Government of South Africa has been noted as a major factor in the Minerals Council’s decision to increase the industry’s supplementary electricity supply.
“Renewable energy projects in the mining sector could go a long way towards easing pressure on Eskom to the benefit of other industries and the country as a whole. These projects must be expedited through a ‘smart tape’ system. In addition, policy issues related to wheeling charges and surplus offtake to other users are required,” Baxter said.
He noted that, while the mining industry will still be reliant on Eskom’s 24-hour baseload electricity to operate mines safely, productively, and efficiently, renewable projects are projected to account for approximately one third of the sector’s annual electricity consumption, adding that electricity prices have increased more than six-fold over the last decade and is now the second-largest cost component for deep-level and electricity-intensive mines. Baxter also highlighted that the sector’s 3,900 MW is “purely supplemental” and will not detract from Eskom’s baseload capacity.
“The Minerals Council reiterates its support for Eskom and the leadership team who are all doing the right things to fix and maintain Eskom’s assets. Their departure at this critical stage will only exacerbate the problems with Eskom and for the country at a time we can least afford any further setbacks in efforts to restore and stabilize the electricity supply,” Baxter concluded.