South Africa’s electricity generation crisis has created major opportunities for companies, businesses and individuals to start generating their own power, Exxaro CEO Mxolisi Mgojo said on Thursday when the JSE-listed black-empowered company declared generous dividends following a resilient 2019 performance, despite coal price odds.

“That’s a big shift, over and beyond what was originally planned in the IRP 2019. What is becoming very critical now is how we actually fast-track the enabling of self-generation to happen, because we know that for the coming 18 months to two years, we’re going to be confronted by continuous load-shedding, until such time as the maintenance programme has been done effectively, and Medupi and Kusile are sorted out.

“Like many other mining companies, we are looking at how we can plug part of that gap by providing our own ability to generate power for ourselves, and over and above that we see the area of renewable energy being a very critical area going into the future, hence our decision to buy the remaining 50% of Cennergi. All the conditions precedent have been met and at the end of this month, we’ll close that transaction formally, which means we'll own 100% of the renewable energy company,” he said.

Forming part of Exxaro’s response to climate change is the targeted reduction of its coal resources by 22% over time, as well as a commitment to achieving a carbon neutral footprint by 2050.

He said Cennergi provided Exxaro with an opportunity to focus its resources and capital allocation much more rigorously around renewables.

“Part of the strategy is to use Cennergi as a stepping stone off creating an energy business going into the future,” he told Mining Weekly.

He made an impassioned plea for climate change to be taken with the utmost seriousness. The black-led diversified resources company is itself aligning strongly to the Paris Agreement in response to climate change risk, and succeeding in promoting powerful environment, social and governance (ESG) excellence.

“If we don’t take climate change issues very seriously and see it as being part of our responsibility to respond in a very effective and impactful ways, God help us, because our children will be inheriting a very, very challenging future,” he said.

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Cape Town wants to set up its own independent power producer office to secure renewable energy, following President Cyril Ramaphosa’s announcement during his Sona address that municipalities in good financial standing will be allowed to procure their own power from IPPs.

Executive director for energy at the City of Cape Town, Kadri Nassiep says the City has engaged national treasury with a view to setting up its own independent power producer (IPP) office along the lines of the renewable energy independent power producer programme (REIPPP).

He says “we have also engaged CSIR to prepare our mini-IRP that will direct our call for proposals”. Electricity provision in the country is guided by the integrated resource plan (IRP) which sets out what electricity will be sourced and when.

Government has used the IPP office, which falls under the department of mineral resources and energy, to procure renewable energy in earlier REIPPs. The IPP office has begun an exercise to source 2,000 to 3,000 megawatts of emergency supply on an urgent basis.

Cape Town’s intention to set up its own IPP office, which will implement its own IRP, would constitute a dramatic re-shaping of the energy landscape.

Nassiep says “we still have to refine tariffs, but we are looking at it already”.

Budgets need to be realigned, he says, but that’s not a huge issue.

“So we are cautiously optimistic, but let’s see what [mineral resources and energy minister] Gwede Mantashe publishes in terms of schedule 2.”

Mantashe announced earlier in February at the Mining Indaba in Cape Town that the government would be gazetting a revised schedule 2 of the Electricity Regulation Act, which will enable self-generation and facilitate “distributed generation” by municipalities.

The City of Cape Town has fought a protracted battle with the minister and regulator Nersa over the right to source its own electricity. The dispute has its origins in 2015 when then Cape Town mayor (Patricia de Lille) asked the then energy minister (Tina Joemat-Pettersson) to allow the City to source renewable energy, but did not even get a reply.

The case has been set down to be heard in the high court on 11-12 May. Given the constrained electricity supply, the City of Cape Town had argued for an earlier court date, but has not been able to secure this.

Asked if the court case will still go ahead, Nassiep said:

“In my opinion yes. We still need clarification from the court regarding our rights.

“For instance, the minister might opt to issue [a] once-off determination in favour of munis and then not again. Or he can opt to keep it later to a cap of 500 megawatts, which might limit us unfairly. So it’s still needed.”

Nassiep says that “unfortunately” there is a likely two- to three-year time horizon for Cape Town’s own sourced power to come on stream because of financial closure issues, environmental impact assessments, power purchase agreements as well as connection charges and ordering of connection and plant equipment.

The Centre for Environmental Rights (CER) has joined the Cape Town court action, the CER’s Nicole Loser saying that local government has a constitutional duty to provide clean and healthy electricity, “which does not pollute our air, water, soil, or damage our climate”.

Loser says the Sona remarks were “very vague” on the details of municipal procurement.

“Also not clear is if there will be the needed legal reform to address the current uncertainty around municipal procurement of whether Mantashe will simply issue the determination requested by the City.”

Cape Town mayor Dan Plato cautiously welcomed Ramaphosa’s announcement.

“However, urgent clarity is required from the national government on the legal and regulatory nuts and bolts of how this must happen.

“We need urgent clarity from the government on the roles and responsibilities for municipalities and other stakeholders in terms of the new generation capacity regulations in the Electricity Regulation Act,” said Plato.

He says the City is doing a study to determine how best to overcome energy poverty, through various projects including installing solar kits, solar home systems, increasing free basic electricity and improving access to gas. 

“Improving access to affordable electricity is a key deliverable that we are investigating at the moment.”

Ramaphosa also announced that “a Section 34 ministerial determination will be issued shortly to give effect to the IRP 2019, enabling the development of additional grid capacity from renewable energy, natural gas, hydropower, battery storage and coal”.

“We will initiate the procurement of emergency power from projects that can deliver electricity into the grid within three to 12 months from approval,” he said.

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Improved renewables technology, hybrid power, intelligent seamless integration, significant
cost savings, and variable power usage is set to drive  the increased use of renewables  in
mining  in the next decade.
As one of the most energy-intensive industries, the mining sector is starting to seriously 
consider the significant cost-savings that renewable solutions offer, and include wind and 
solar into the power mix.
As renewable microgrids develop in size and complexity, technology relentlessly advances,
material costs drop, and hybrid solutions improve to ensure seamless integration of power
sources and seamless reliability, renewables are becoming an inevitable part of mining
power solutions.
The mining sector opportunity
An average size off grid mine with a 30MW power plant will probably burn about $1.4 billion
of diesel fuel over a 20-year period, which is about one third of the total cost of the mine. In
Australia, the mining industry has realised that renewable energy offers a cheaper, cleaner
and smarter way to power their operations, and there is already significant interest in the use
of renewables in the sector.

The global mining industry consumes around 400TWh of electricity a year, posing a
significant opportunity for hybrid renewables to be part of the energy mix. Stephen Hanson,
COO of international renewables company juwi says that currently, just 0.1 % of power
supply on mining sites comes from wind and solar, with only 2,240MW of wind and solar PV
installed.
Dave Manning, juwi’s global head of hybrid, says that in Australia there is already
widespread consensus in mining that, a 50% renewable share at Australian mine sites
should be considered the norm, and where possible 100% renewables should follow.
“Mines are most interested in solutions that can reduce costs and carbon emissions,” said
Manning.
“The most advanced options to deliver this are hybrid systems that integrate solar, wind and
batteries with diesel, gas or heavy fuel oil generators, without compromising reliability or
power quality.
“We are already starting to see mines transition to fully electric operations, as there are
multiple benefits. The economics of a 100% renewable energy site are almost there, and
with the introduction of hydrogen, we are almost certainly going to see 100% renewable
energy-powered operations in the near future.”
Cost benefit
Manning says that the biggest benefit for mines employing renewables is cost reduction,
and the ability to reduce their carbon footprint. “Another important related benefit is energy
price certainty – with the inclusion of renewable in hybrid solutions, the mine is able to
reduce its exposure to oil price or electricity price volatility,” says Manning.
Technology driving reliability
Rapid improvement in battery technology, integration and control systems has ensured that
hybrid power solutions offers massive cost savings without sacrificing reliability.
“Battery technology is increasing the reliability of the power supply, and allowing thermal
assets, when required, to operate more efficiently,” says Manning.
“We have developed a state of the art integration system with our hybrid IQ solution that
ensures a seamless power supply. At the core of the system is a micro-grid controller and
SCADA system that incorporate all generation and distribution assets from wind, solar and
battery to gas, diesel, heavy fuel oil and even hydrogen generators,” says Manning.
The hybrid IQ system also includes enabling technologies such as cloud and wind
forecasting which further optimizes performance.
Until recently, mines had not been convinced that solar, or wind, can be absorbed easily into
an off-grid location without affecting reliability. However, renewable hybrid projects such as
the Sandfire DeGrussa Hybrid Project in Western Australia are achieving their annual
generation targets ahead of schedule. The De Grussa project consists of a 10.6MW tracking
PV Project together with a 6MW battery coupled with a hybrid control system which juwi
developed, constructed and has been operating and maintaining since 2016. “The excellent 
performance of this project confirms that hybrid systems reduce costs without compromising
power system reliability and safety,” says Manning.
“More efficient panel technology and the introduction of bifacial panels is set to improve the
performance of solar, and in wind we are seeing the development of turbines designed for
variable wind conditions, so you get optimal performance out of your local environment.”
Hybrid microgrids
As the deployment of renewable energy hybrids gains momentum in Australia, major hybrid
microgrids powered by solar, wind and batteries in remote locations at the fringe of Western
Australia’s electricity grid, are being rolled out. One example is the Agnew hybrid microgrid
deployed at a gold mine in the northern Goldfields consisting of five wind turbines delivering
an 18 MW wind farm, a 10,000 panel 4 MW solar farm and a 13 MW/4 MWh battery storage
alongside a 16 MW gas-fired power station. The facility has is being delivered by distributed
energy developer EDL in partnership with juwi.
The rapidly falling costs of renewables and storage are the main factor supporting the
economics for hybrid microgrids at mines, says Manning, “In the absence of carbon pricing
or robust support schemes for renewables in mining, solar, wind and battery had to stand on
their own feet commercially right from the start.”

​Issued on behalf of juwi by Catalyst Communications Contact: Chace Brand chace@catalystcommunications.co.za / 021 035 0351 / 072 095 6718

The heads of South Africa’s wind and solar industry bodies urged Mineral Resources and Energy Minister Gwede Mantashe on Tuesday to publish, without delay, the Ministerial determinations required to unlock the procurement of much-needed electricity capacity in line with the Integrated Resource Plan (IRP 2019), promulgated in October.

Addressing members of the National Press Club in Pretoria, South African Wind Energy Association (SAWEA) CEO Ntombifuthi Ntuli and South African Photovoltaic Industry Association (SAPVIA) chairperson Wido Schnabel reported that their members had projects that could be implemented on an accelerated basis and in line with the Department of Mineral Resources and Energy’s (DMRE’s) recent call for proposals that could be grid-connected in the “shortest time and at the least possible cost”.

The call was made in a request for information (RFI), the deadline for which is January 31, for supply and demand options to close what is at least a 3 000 MW capacity gap, but which a recent Council for Scientific and Industrial Research (CSIR) report calculates could be as large as 8 000 MW. The CSIR also warns that the country’s energy shortfall, which was above 1 350 GWh in 2019 (the country’s worst-ever load-shedding year), could grow to nearly 2 000 GWh this year and peak at about 4 600 GWh in 2022.

A full month as been allocated for the evaluation of the RFI responses, after which an emergency procurement process is expected to be initiated.

SAWEA and SAPVIA believe that the RFI process should not hold back the implementation of the IRP 2019, however, and that the fifth bidding round of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) should be launched in parallel, given both the crisis and that previous bidding rounds have typically required between 18 and 24 months to complete.

Lead times could be compressed in the next bidding round, owing to the fact that some 90 projects had already been identified in 2015 under the ironically named ‘expedited round’ – that round eventually expired after years of delay, precipitated by Eskom’s refusals to enter into new power purchase agreements (PPAs) with independent power producers (IPPs).

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Eskom CEO Andre de Ruyter wants mines to produce their own electricity so pressure can be taken off the national grid.
This is according to the Sunday Times, which spoke to de Ruyter about self-generation in South Africa.

Although mines provide a large chunk of Eskom’s revenue, he acknowledged that in the near term it will be beneficial if the mining industry generated its own power.

“I’m not that concerned about it because I think in the short term that would be a positive development, because it allows us access to electricity that is currently being generated. We can then use it to add to our own supply,” said de Ruyter.

Having access to more power would allow Eskom to perform maintenance on its infrastructure. It would also prevent mines from having to stop operations due to a lack of power.

The report stated that Anglo American Platinum had been hit by R742 million in lost production due to load-shedding in 2019.  Read more......

Beer maker South African Breweries (SAB) and its parent company AB InBev Africa have announced that its breweries across South Africa will have on site solar facilities by the end of this month.
This forms part of a multibillion-rand investment to ensure 100% of electricity requirements at AB InBev's manufacturing sites across Africa come from renewable sources by 2025.

On site solar power at the seven SAB breweries will partially power each facility.

The installations are being implemented through a power purchase agreement (PPA) between AB InBev Africa and SOLA Group, allowing solar photovoltaic (PV) installations to be rolled out across AB InBev’s facilities without the company incurring capital costs.

Under the terms of the agreement, the company will buy the power from SOLA, with the balance of the electricity requirement to be met by State-owned Eskom and local municipalities.

The PPA’s will total around 8.7 MW of capacity.

In 2019, SOLA secured R400-million with partners from African Infrastructure Investment Managers (AIIM) and Nedbank to fund projects such as the AB InBev Africa solar facilities.

The solar PV plants are being installed at seven sites in various provinces, including the Western Cape, Limpopo, Gauteng, KwaZulu-Natal and the Eastern Cape.

Combined, the plants will comprise over 23 000 solar panels, with the construction of the projects creating 175 jobs, in addition to SOLA’s 56 permanent positions.

AB InBev Africa’s PV systems will produce close to 14 GWh/y of electricity.

According to AB InBev and SAB procurement and sustainability VP Taryn Rosekilly, this step by AB InBev Africa highlights the private sector’s strong drive towards reducing its carbon emissions.

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The South African Wind Energy Association (SAWEA) has called for the immediate release of available wind power into the national grid, as the country continues to face daily load-shedding.

After days of implementing Stage 1 to Stage 4 power cuts, State-owned Eskom on Monday evening implemented unprecedented Stage 6 power cuts after the heavy rainfall in some areas of the country exacerbated the already constrained power supply situation.

Eskom explained in a statement that the Stage 6 load-shedding was declared as a result of failed units at the Medupi power station, flooding at the Kriel mine and flooding at the Camden power station.

The power utility late on Monday scaled back to Stage 4 load-shedding and, on Tuesday, said that at 05:43 breakdowns were at 15 200 MW. It was working to reduce unplanned breakdowns to below 9 500 MW and to stop load-shedding by next week.

It pointed out that the probability for load-shedding remained high for the remainder of this week.

The power cuts have resulted in a number of mining companies, including diamond miner Petra Diamonds and gold miner Harmony Gold, halting operations following requests by Eskom and over safety concerns for mine employees working underground.

President Cyril Ramaphosa on Monday acknowledged the “devastating” impact of load-shedding on the economy. Economists have warned that the latest round of load-shedding may push South Africa into a recession.

In light of the ongoing electricity supply constraints, which is unlikely to be resolved soon, the South African Photovoltaic Industry Association on Monday called for government to enable a greater contribution from small-scale embedded generation.

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Mining companies are starting to heed the transition towards a low-carbon future by investing in wind energy, solar and gas.
This was relayed at the annual African wind energy summit, the Windaba, in Cape Town, on Wednesday.

Gold Fields VP and group head of carbon and energy Tsakani Mthombeni said the gold miner was gradually transitioning towards a low-carbon and renewable energy environment.

“Ten years ago, you would not have heard anyone talk about renewables in mining, but things are changing. Financiers locally and globally are coming under pressure to be seen and to be funding low carbon projects,” Mthombeni told a special session on mining. 

This week, Gold Fields became the first mining company in South Africa to publish its first Task Force on Climate-related Financial Disclosures (TFCD) report to improve its disclosure of climate-related information to investors and other stakeholders. 

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Transition to a cost effective and fossil carbon-free energy system is imminent for South Africa, so is the mitigation of issues associated with the ‘water-energy nexus’ and their consequent impacts on the climate.
The country’s key fossil carbon mitigation option lies in the energy sector, especially in shifting away from the coal-dependent power system. Pathways towards a fully decarbonised and least cost electricity system are investigated for South Africa. The energy transition is simulated for five scenarios, assessing the impact of various factors such as sector coupling, with and without greenhouse gas (GHG) emission costs. South Africa’s energy transition is simulated using an hourly resolved model until 2050. This modelling approach synthesises and reflects in-depth insights of how the demand from the power sector can be met. The optimisation for each 5-year time period is carried out based on assumed costs and technological status until 2050. The modelling outcomes reveal that solar PV and wind energy, supplying about 71% and 28% of the demand respectively in the Best Policy Scenario for 2050, can overcome coal dependency of the power sector. The levelised cost of electricity increases just slightly from 49.2 €/MWh in 2015 to 50.8 €/MWh in the Best Policy Scenario, whereas it increases significantly to 104.9 €/MWh in the Current Policy Scenario by 2050. Further, without considering GHG emissions costs, the cost of electricity slightly increases from 44.1 €/MWh in 2015 to 47.1 €/MWh in the Best Policy Scenario and increases up to 62.8 €/MWh in the Current Policy Scenario by 2050. The cost of electricity is 25% lower in the Best Policy Scenario than in the Current Policy Scenario without factoring in GHG emissions costs and further declined to 50% with GHG emissions costs. The Best Policy Scenario without GHG emissions costs led to 96% renewables and the remaining 4% is supplied by coal and gas turbines, indicating pure market economics. The results indicate that a 100% renewable energy system is the least-cost, least-water intensive, least-GHG-emitting and most job-rich option for the South African energy system in the mid-term future. No new coal and nuclear power plants are installed in the least-cost pathway, and existing fossil fuel capacities are phased out based on their technical lifetime.

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Long-term sustainable growth and development in South Africa will require a transition away from the country’s current coal-intensive energy system and economy towards an economy backed by an environment-friendly and renewable energy system.

The country is highly dependent on coal and is energy intensive. This plays out in an economy marred by a considerably high level of unemployment and inequality. Therefore, a transition is needed, speakers said during an Southern Africa-Towards Inclusive Economic Development workshop, in Pretoria, on Wednesday.

The workshop explored scenarios for South Africa’s transition from a coal-intensive energy system and economy towards a climate-friendly and renewable energy system.

Speakers at the workshop noted that while there was no clear, concrete picture of what this future system would entail, it was vital that the country was planning to move towards such a system.
Speaking at the workshop, University of Cape Town economist Faaiqa Hartley emphasised the importance of including renewables in the country’s energy mix.

She indicated that when not constrained, renewable energy presented a source of primary production of electricity.

Moreover, she highlighted that renewables allowed for considerable decarbonisation of the power sector.