Big power users tell Ramaphosa they want to generate their own electricity

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Big power users, including mining houses who say load shedding will be the death of the industry, say they want government to move faster with new self-generation regulations because they no longer want to be at the mercy of Eskom.

Reporting to Ramaphosa at the Business Unity South Africa’s (BUSA) Economic Indaba, companies who were locked in the energy crisis breakaway discussion for most of Tuesday said they want SA’s energy plan to be within direct control of the Presidency, and asked Ramaphosa to fast-rack deregulation of private sector generation.

Fumani Mthembi, founder and director of Pele Energy Group, said large power users also felt it would be best if key decisions regarding SA’s energy mix and transition to cleaner energies are within the president’s direct control.  

"The private sector, community and households need to be given the opportunity to invest in their own power generation," said Mthembi, urging Ramaphosa to facilitate and fast-rack deregulation of private sector generation.

Industries like mining and manufacturing have borne the brunt of SA’s power supply crisis, being forced to halt operations repeatedly in December as Eskom took the unprecedented step of instituting stage 6 load shedding and brought back power cuts in January ahead of what President Ramaphosa had promised the nation.

Exxaro Resources CEO, Mxolisi Mgojo, said instability of our power supply in SA, as well as the cost of electricity, has meant that mining companies cannot process their minerals in the country.

'It's as dire as that'

"It has necessitated a lot of our mining companies who otherwise would be willing and wanted to continue beneficiating their ores here in South Africa, to start exporting those beneficiation possibilities externally because you can’t rely on electricity and it’s very expensive," said Mgojo.

He warned that the current state of Eskom would be the final factor to bring an already ailing mining industry on its knees.

"Without fixing Eskom, we don’t have a mining industry. It is as dire as that," said Mgojo. "With the recent load shedding where you get a call that says ‘please start turning off all unnecessary and auxiliary activities within your mine and we are no sure when you can bring them back. You cannot invest in operating in an environment like that."

Business leaders at the Indaba said they fear that even stage 8 might soon become a reality if nothing is done to complement Eskom’s generating capacity. Yet private power generation remains highly regulated in in SA.

For instance, the first draft of the National Energy Regulator’s small-scale Embedded Generation even proposed that people who wanted to install solar panels must register them even when not connected to the grid. Although that draft was later withdrawn, thus exempting producers who generate less than 1 MW of power from needing licenses, power-intensive industries need to generate even more than that to sustain their own operations.

However, in December, after Eskom started rolling blackouts again in Decenber, Ramaphosa said Cabinet will discuss self-regulation in the new year.

Mgojo said the mining industry has communicated to government that it is willing to investing its own money so that it can self-rely when it comes to electricity.

In his response, Ramaphosa told delegates that following his self-generation announcement in December, government has begun to address policy issues to make it possible. He said government is also expediting the issuing of renewable energy producers licences because the country needs to procure additional capacity urgently.

"We are now embracing the fact that there are those companies, even households who want to generate their own electricity. I realised that as a nation, we cannot stop technology and we cannot stop the future from arriving," said Ramaphosa.

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