SA’s mining companies urged the government to grant permission for them to set up independent power sources after years of delays and frustration to reduce dependence on Eskom.

There are 1.3 gigawatts of power generation outside Eskom waiting for signatures and approvals, with some schemes in the works for years. Eskom provides about 25 gigawatts of electricity despite installed capacity of 45 gigawatts.

The mining industry accounts for at least 609MW of the independent power production requests from the Energy Intensive Users Group that are awaiting approval from the National Energy Regulator of SA (Nersa) and sign-off from mineral resources & energy minister Gwede Mantashe.

The backlog of sign-offs and approvals has proved a source of enormous frustration for companies wanting to wean part of their electricity consumption off the state-owned power monopoly Eskom, which plunged the country into darkness on Monday, shedding an unprecedented six gigawatts of supply.

“The latest crisis highlights the fact that the government must accelerate the licensing of renewable power projects planned by industrial and mining companies so that they can deal with job-destroying tariff hikes and supply interruptions,” said Gold Fields CEO Nick Holland.

“This would also give Eskom room to address its own operational issues at their power plants.” 

Holland has made securing the approval for a 40MW solar plant to supply the South Deep mine one of his personal projects after the rapid and successful implementation of renewable energy projects in Australia with the full support and financial backing by the government there.

Gold Fields started engaging the SA government in July 2017 and made a submission to Nersa in May 2018.

“To engage with Nersa further we need ministerial approval as Nersa will not assess any generation licence application above 10MW without this approval. We are waiting for the ministerial approval,” Holland said.

Sibanye-Stillwater, the world’s largest platinum miner and one of SA’s major gold producers, started talks with the department of energy and Nersa in late 2016.

Sibanye has tried unsuccessfully to secure approval to use Eskom’s power lines on a “commercially viable basis” to feed its other operations from the large solar plant it planned near its Gauteng gold mines.

“The potential financial liability associated with a stranded asset represents a regulatory risk that erodes the commercial justification in terms of projected energy cost savings,” said spokesperson James Wellsted.

Another insurmountable issue was the regulatory requirement that Eskom had technical oversight and control over the solar plant. The terms of the contracts around this aspect “were found to be onerous and costly to the point it jeopardised the project”, he said.

“Regulatory overhaul is desperately needed to promote innovation in the electricity supply industry, and to promote the competitiveness of electricity generation,” Wellsted said.

“Sibanye-Stillwater is working through the Energy Intensive User Group to challenge some of the regulatory issues faced by industry in general to unlock projects such as this one and those pursued by other large power users.”

The government would expedite decisions on these applications, said President Cyril Ramaphosa.

The cabinet will meet on Friday. - BDLive