South African mining companies have 3,900MW of renewable energy projects worth an estimated R60 billion in the pipeline, which, if built, would relieve pressure on Eskom.<\/p>\n
However, there are a number of red tape issues that still need to be addressed to help speed up development, the Minerals Council of South Africa said in a statement on Tuesday (23 November).<\/p>\n
“There is a pressing need for the mining industry to supplement Eskom electricity supply,” said Minerals Council chief executive Roger Baxter.<\/p>\n
“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\u2019s commitment to reach a target of net-zero carbon emissions by 2050,” he said.<\/p>\n
Baxter said Minerals Council member companies have steadily increased the number of renewable energy projects in recent months, with a 146% jump in electricity generation seen from the planned 1,600MW in 2020.<\/p>\n
The license-free concession for embedded generation of up to 100MW was a major factor in this increase and it is probably the government\u2019s biggest structural reform in two decades, he said.<\/p>\n
“Renewable energy projects in the mining sector could go a long way towards easing the 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.<\/p>\n
“Environmental authorisations take too long and should be materially shortened. In addition, policy issues related to wheeling charges and surplus offtake to other users are required,” he said.<\/p>\n
Baxter added that electricity prices have increased more than six-fold over a decade and are now the second-largest cost component after salaries for deep-level and electricity-intensive mines. The renewable projects in total will account for about a third of the mining sector\u2019s annual electricity consumption, he said.<\/p>\n
He added the mining industry will not completely replace Eskom supply, as it needs 24-hour baseload electricity to operate mines safely, productively, and efficiently, something renewable energy sources are unable to provide now.<\/p>\n
The sector\u2019s 3,900 MW is purely supplemental and will not detract from critical baseload 24\/7 capacity from Eskom, he said.<\/p>\n
Red tape<\/strong><\/p>\n Among the constraints for the mining industry in approving and building their own renewable energy projects are:<\/p>\n “The measures that could be employed to speed up the mining sector\u2019s investments in renewable energy projects include the provision of emergency tax incentives, such as a s37E income tax write off equivalent, shortening environmental authorisation and Eskom related grid-tie connection processes, providing a clearer framework of wheeling on the national grid, and ensuring a shortened smart tape process,” said Baxter.<\/p>\n\n
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