Addressing the Africa Energy Indaba, Minister of Energy and Energy Resources Gwede Mantashe said that a just energy transition must be people-centred, and take into account the socio-economic conditions of the communities that will be affected.
At the recent African Energy Indaba Conference, a group of protesters held up placards, with some suggesting that Minister of Mineral Resources and Energy Gwede Mantashe is blocking renewable energy, which is a lie. Under the leadership of Minister Mantashe, the department is rapidly approaching the implementation of the Integrated Resource Plan (IRP) 2019 with the procurement of additional energy capacity through, among others, the renewable energy procurement program overseen by the Office of Independent Power Producers.
In accordance with the IRP 2019, the Department of Mineral Resources and Energy (DMRE) is at the forefront of the implementation of a diverse energy mix that will reduce dependence on one or several primary energy sources.
In October 2021, Minister Mantashe announced 25 preferred bidder projects, with a total of 2,583 megawatts under Bid Window 5 of the Renewable Energy Free Power Producer Procurement Program (REIPPPP). At least 19 of these projects have signed Power Purchase Agreements (PPAs) with Eskom.
In Bid Window 6, the Department obtained 4 200 megawatts (MW) of which 1 000 MW has been contracted; 3 200 MW cannot be contracted due to network transmission constraints. We believe that the appointment of the Minister of Electricity will help accelerate the efforts of Eskom to make the necessary investments in grid transmission, especially in provinces such as the Northern Cape, Western Cape and Eastern Cape.
Some of these projects are currently in various stages of construction, and some will reach commercial and financial close before the end of March 2023.
Once a project has reached financial close, the construction timeline is generally 24 months, and new generation capacity is expected to come online in late 2024 and into 2025. Although this may seem like a long timeline, the reality is that many projects are moving toward financial close or are already under construction. good progress.
Recently DMRE issued a Request for Proposal (RFP) for the procurement of up to 513 MW of battery energy storage. This will contribute to sustainable socio-economic and environmental growth, thereby continuing the success of the IPP Procurement Programme.
The department will release (RFP) consisting of 3 000 MW of gas-to-power by the end of the current financial year, and Bid Window 7 to 5 000 MW, according to the availability of grid capacity.
Minister Mantashe approved the gazetting of amendments to Schedule 2 of the Electricity Regulation Act, which enables private energy generation by removing the license threshold. This move has seen mining companies such as Gold Fields report a 10% increase in production, while mining production has fallen due in part to load shedding.
The intervention to reform the electricity regulatory regime has been regarded as a positive step by the energy sector and industry across the board. It is estimated that this step will unlock significant investment in new generation capacity in the short to medium term, and make a significant breakthrough in achieving national energy security, as well as reducing the impact of load shedding throughout the country.
In 2022, South Africa’s National Energy Regulator (NERSA) approved the registration of 406 installed generators from 509 applications received. The total capacity of registered generators is 1 664 MW. Among these generators, Seriti has started the process of building a 155 MW wind project in Mpumalanga, while Exxaro will build a 70 MW solar power plant to supply electricity to the Grootegeluk mine. The Department hopes that more mining companies and in other sectors will follow suit.
In his opening speech during the African Energy Minister Indaba Mantashe emphasized that Africa is endowed with resources such as coal, oil and gas, which are needed for baseload energy to power our industrialization. “Our continent deserves the opportunity to develop its own oil and gas storage, refinery, and distribution infrastructure to prevent its people from facing global market turmoil and thus secure continental energy needs,” the Minister said.
The department believes that nuclear will play an important role in the carbon mitigation strategy, and is a clean energy source that will be pursued as part of the effort for net-zero emissions. South Africa has shared the safe operational experience of the Koeberg Nuclear Power Plant for more than 38 years, and during this time Koeberg has provided clean energy to support the country’s climate change goals. The plant is reaching the end of its design life in 2024, but Eskom has started a plant life extension for Koeberg to extend its operational life to 20 years.
To achieve a sustainable Just Energy Transition from a high to low carbon economic growth trajectory, the Department is working with the World Bank to explore the possibilities of carbon capture, utilization and sequestration (CCUS).
The Department’s approach is to move from high carbon emissions to low carbon emissions as integral to the Just Energy Transition. In this case, the Department has given a high premium on sustainable development between the spectrum of profits, project security and community development around mining and the complex energy industry.
Despite the Department’s commitment to increase renewable energy sources by 18% and reduce coal energy production by 15%, it is important to point out that our main focus is to ensure that South Africa has a reliable, sustainable and secure energy supply. Therefore, South Africa must use all viable and available technologies, as outlined in the 2019 IRP, which will help not only achieve the foundation, but also a stable national network.