Modern Mining February 2020

self-generation regime

Mark Cutifani, CEO of Anglo American.

Andrew van Zyl, director and principal consultant SRK Consulting (SA).

drastically streamlining regulatory processes to enable the establishment of self-generated power that can supplement Eskom’s constrained capacity. I am encouraged by Minister Mantashe’s acknowl- edgement that self-generated power in South Africa will be supported by his department. This is a posi- tive step in solving South Africa’s energy crisis,” said Cutifani. Cutifani believes that the mining sector can play a significant role here, noting that there are several pilot projects that are already in the pipeline, includ- ing Anglo American’s large-scale solar PV project for the Mogalakwena PGMs Mine, and the company’s involvement in developing the 100 MW Kathu Solar Park in Northern Cape. Andrew van Zyl, director and principal consultant at SRK Consulting, is equally encouraged by the min- ister’s announcement, saying that there is no better time to consider such opportunities. “While Eskom’s base-load supply is still vital to keep mines running, independent power generation from renewable sources holds value for a few reasons,” says Van Zyl. “These relate to issues of rising electricity prices from the grid, as well as to mines’ environmental commitment and future carbon tax liabilities.” Need for clarity While the industry is generally encouraged by this supposed positive step, Jason van der Poel, Webber

Wentzel’s specialist in power and energy, says there is need for clarity. He notes that the current IRP does not cap the amount of distributed generation that may be produced up to 2022. From 2023 to 2030, it is capped at 500 MW per year. The distributed gen- eration the minister spoke about refers to projects between 1 and 10 MW. “As the law stands, under schedule 2 of the Electricity Regulation Act, the only electricity gener- ation projects that are exempt from the requirement to apply for licence under the Electricity Regulation Act are projects of no more than 1 MW, whether or not connected to the national grid,” says Van der Poel. However, Section 10(2)(g) of the Electricity Regulation Act allows the Minister of Mineral Resources and Energy to grant deviations from the IRP. In May 2019, Jeff Radebe, the previous Minister of Energy, wrote a letter to NERSA granting devia- tion from the existing IRP 2010-2030 for licensing of operation for generation facilities between 1 and 10 MW. “The minister has said that together with NERSA, his department is in a process to gazette a revised schedule 2 of the Electricity Regulation Act to enable self-generation and facilitate municipal gen- eration options under distributed generation. We are encouraged by the minister’s comments, but we await details,” says Van der Poel.

February 2020  MODERN MINING  15