SOUTH AFRICA - Cape Town - 03 February 2020 - Minister of Mining and Energy in South Africa Gwede Mantashe officially opended the Invest in Africa Mining Indaba,held at the Cape Town International Convention Centre . Photographer:Phando Jikelo / African News Agency (ANA)
JOHANNESBURG - Mineral Resources and Energy Minister Gwede Mantashe has given the strongest hint yet that the government was considering life outside of troubled power utility Eskom.
Mantashe told journalists on the sidelines of the 2020 Mining Indaba in Cape Town yesterday that the government was already speaking to investors on the possibility of generating new forms of energy.
He said the initiative was aimed at plugging the gap that would be created by the decommissioning of Eskom’s ageing power plants.
“Who will pay for this energy outside of Eskom is an investor that wants returns on his investment, but the state will partner. We are looking for us to partner as well,” Mantashe said.
The 2019 Integrated Resources Development Plan, South Africa’s electricity generation blueprint, sets out the rate and schedule of decommissioning of some of Eskom’s ageing coal-fired power plants until 2050.
“It is important to focus not only on what Eskom is doing, but I also think there is a great potential in terms of developing generating capacity for gas in the region that can be a substitute to electricity,” he said. “We have to look at other technology and supply electricity more efficiently.”
Mantashe said the government was in the process of gazetting a revised Schedule 2 of the Electricity Regulation Act, which would enable self-generation and facilitate municipal generation options under “distributed generation”.
“This will help close the energy gap caused by deteriorating Eskom plant performance,” Mantashe said.
“Depending on the circumstances, the generation plant may only require registration and not licensing.”
Yesterday, Eskom said that load shedding would continue until Thursday, as critical maintenance was being done on units that were on planned outages and some of those on unplanned outages to ensure timeous return to service.
Mining companies have previously requested the government to grant permission for them to generate their own electricity after load shedding hurt production in December last year.
Minerals Council SA chief executive Roger Baxter said the council had agreed with the government to generate electricity outside of Eskom.
Baxter said that last year the council’s members had 609 megawatts of projects in the pipeline, adding that to date the projects had gone up to 1.58 gigawatts and could be brought on stream in the next nine months to three years.
“The point is that the government has recognised that generating private power, particularly for self-use, is critical. Eskom simply needs time out to fix the power plants that have been destroyed by bad quality coal from power suppliers that are not council members,” said Baxter.
Eskom’s electricity constraints have had a negative impact on mining and the economy. In December, Eskom’s Stage 6 load shedding compelled mining companies to cancel shifts.
Companies, including Gold Fields, and Sibanye-Stillwater, had applied to the National Energy Regulator to install power-generating capacity as Eskom grappled with load shedding.
The industry accounted for 8.1percent of gross domestic product, or R360billion, last year, 2.8percent lower than it did in 2018 as South Africa grappled with power shortages.
Baxter said the council had met with André de Ruyter, the new chief executive of Eskom, twice in the 10 days he has been in office. “This shows the seriousness that Eskom is taking its relationship with the mining industry,” said Baxter.