South Africa’s Mineral Resources and Energy Minister, Gwede Mantashe has announced that the government is in the process of gazetting a revised schedule 2 of the Electricity Regulation Act, which will enable self-generation and facilitate municipal generation options under “Distributed Generation”.
In line with this model, Mantashe hopes to create an entity distinct from Eskom to generate power bases which would either be publically or privately owned and help address the energy gap caused by power utility, Eskom’s deteriorating plant performance.
“Depending on the circumstances, the generation plant may only require registration and not licensing,” he says.
The Dutch model, as punted by Mantashe, would see the state open the electricity generation market up for private competition, while the state only owns the main transmission lines.
As seen with the Netherlands in 2004, where electricity generation was opened up two years after allowing industrial consumers to generate their own power, Manatashe sees South Africa going emulating this.
Mantashe addressed delegates at the 26th annual African Mining Indaba currently underway at the Cape Town International Convention Centre (CTICC), from February 3 – 6, under the theme “Optimising Growth and Investment in the Digitised Mining Economy”.
“Addressing the Indaba in 2019, South African President, Cyril Ramaphosa outlined measures being considered to address the electricity supply challenges. “To this end, in October last year, we gazetted the Integrated Resource Plan (IRP), the country’s blueprint for long-term electricity generation options, which provides for a diversified energy mix,” Mantashe says.
The State owned utility, Eskom which supplies about 95 percent of the country’s electricity, has been forced to effect loadshedding on and off for months to avoid tripping the national grid, partly due to the frequent breakdown of its infrastructure after years of inadequate maintenance.
Eskom says it will have to extend rotational power cuts to Thursday as its units continue to generate less power than was needed. It had initially indicated it would suspend the latest bout of load shedding on Monday morning, but said in a statement late on Sunday that its system remain under stress.
In addition to these initiatives, Mantashe says his department is seeking solutions to network infrastructure challenges facing the mining sector, including rail and port infrastructure.
Minerals Council of South Africa CEO, Roger Baxter, welcomed Mantashe’s commitment as an acceptance that private power, especially for self-use, could play a critical part in addressing Eskom’s troubles.
According to Baxter, mining companies originally had a figure of 609MW of projects in the pipeline for self-use energy. This had grown to about 1.5GW of projects that could be brought on stream in the next nine to 36 months.
Earlier on Monday at a media briefing, Baxter announced that the Minerals Council had already had two meetings with new Eskom CEO, Andre de Ruyter.
“We fully recognise that Eskom needs to be effectively load shedding for two years at about stage 2, which for mining is a disaster,” he said. “We have had tough conversations with Minister Gwede Mantashe.”
The mining indaba is set continue until Thursday.
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