JOHANNESBURG (miningweekly.com) – Minerals Council South Africa, Business Unity South Africa (Busa) and individual mining companies have applauded the support that Eskom CEO Andre de Ruyter has given to the lifting of the licensing exemption threshold for electricity generation to 50 MW.

During the ENSafrica webinar on February 2, De Ruyter backed lifting the threshold from 1 MW to 50 MW, following a report by Meridian Economics and EE Business Intelligence, which showed that the relaxation could release 5 000 MW or more of additional energy capacity within five years.

On De Ruyter’s support for the higher threshold, Minerals Council South Africa CEO Roger Baxter told Mining Weekly: “This support is welcome. Raising the cap is useful. It should be done as soon as possible, but it needs to include the easing or elimination of the range of hurdles that stand in the way.

“There is a need to cut out the red tape. In particular, the Eskom process to get a grid tie connection is particularly cumbersome. There are two parts to the Eskom application process which takes a minimum of seven months – 90 days for the cost estimate and 120 days for the budget quote – and involves multiple fees (and supporting documents). Any slight variation in the part 1 or part 2 of the application triggers an extension of the Eskom time limits.

“The Nersa process also takes four months (120 days) and requires a public hearing and for the Electricity Subcommittee to meet. Applications can only be approved if the Eskom grid tie process has been approved, which takes seven months. The benefits to the industry and South Africa would be significant. The benefits to mining would be:

security and consistency of supply for the industry (these projects are supplemental and will not replace Eskom as our baseload supply);

more predictable and manageable electricity cost increases;

both of these would provide greater certainty and attractiveness of investors; and

a reduction in carbon emissions and many projects would involve renewables,” Baxter added.

Busa expressed its support in a media release: “We support the findings that up to 5 000 MW potential of private distributed generation could be unlocked if the licensing exemption threshold is lifted to 50 MW. In the current circumstances, this is material incremental capacity that could be sourced from the private sector.”

The response of Dr Tsakani Mthombeni, Impala Platinum executive: sustainable development, was this: “We have noted the call by the Eskom Group CEO on lifting requirements for self-generation, from 1 MW to 50 MW. We strongly support this policy adjustment as it would significantly accelerate the introduction of self-generated power capacity to our deeply constrained electricity grid, especially if appropriate wheeling mechanisms can be introduced concurrently, so mines can share the power across their various operations through the Eskom grid.

“We see no reason why these changes cannot be introduced with the required speed and urgency as it would not only serve to strengthen electricity security in the country, but also assist mining companies to reduce their carbon footprint and meet pressing ESG objectives,” Mthombeni added.

Harmony Gold is also fully supportive of the lifting of the electricity licensing cap: “We are exploring renewable energy options which will greatly assist in reducing dependency on Eskom. We are busy with a solar energy project which could generate 30 MW of power in the Free State Province,” the Harmony Gold investor relations team stated.

Gold Fields VP Martin Preece expressed this view: “The sooner this is enabled the better as it will unlock significant value to the industry and contribute meaningfully to relieving stress on an already constrained national grid. We need to bear in mind that any such relief would still entail 18 to 24 months before projects could be implemented and commissioned. We hope that this sentiment is shared by all stak...