For now, SA has no choice but to stick with coal as 'vast reserves' remain unexploited - Mantashe

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Minister of Mineral Resources and Energy Gwede Mantashe. Picture: Felix Dlangamandla/Netwerk24
Minister of Mineral Resources and Energy Gwede Mantashe. Picture: Felix Dlangamandla/Netwerk24
  • South Africa, like the rest of the world, is under pressure to mitigate against climate change, says Mineral Resources and Energy Minister Gwede Mantashe.
  • In the coming months, his department will issue a request for proposals for over 9 000 MW to bolster energy capacity.
  • While the country is committed to a just transition and has begun investing in clean technologies, the reality is there are vast reserves of coal and petroleum sources to exploit, says Mantashe.

Mineral Resources and Energy Minister Gwede Mantashe plans to issue requests for proposals to secure over 9 000 MW of additional energy capacity.

The minister on Tuesday tabled the budget vote for his department.

Mantashe noted that South Africa and the rest of the world are increasingly under pressure to mitigate against climate change, but the country's energy capacity is largely dependent on fossil fuels.

"In an alternative universe, one would immediately eliminate fossil fuel-generated energy such as coal and petroleum. However, this is not our reality, our reality is that we have vast reserves of coal and petroleum resources which we continue to exploit," Mantashe said.

The minister however said that government is committed to a just transition, and has begun investing in clean technologies to support the transition to a low-carbon economy, while ensuring security of energy supply.

In the coming months, additional requests for proposals will be issued for:

  • 2 600 MW for renewable energy, around August 2021.
  • 513 MW for storage, around August 2021.
  • 1 500 MW from coal, around December 2021.
  • 3 000 MW for gas, around December 2021.
  • 1 600 MW for renewable energy, around January 2022.

Eskom implemented stage 2 load shedding this week after ten generation units broke down.

So far to address South Africa's supply constraints, Mantashe said that 1 200 MW of Bid Window 4 of the Independent Power Producer Procurement Programme (IPPPP) has been connected to the grid and the remaining 1 000 MW will come online by no later than December 2021.

He added that eight preferred bidders have been announced, with three recommended to be appointed subject to meeting specific value-for-money conditions. These IPPs are set to deliver 1 995 MW within the next 12 to 18 months.

Eskom has also procured 200 MW from IPPs under the short-term power-purchase programme.

Requests for proposals for Bid Window 5 of the renewable energy IPPPP for 2 600 MW have already been issued.

Clarity for municipalities

Mantashe said that electricity regulations for new generation capacity have also been amended; it provides clarity for municipalities that plan to develop or buy power from IPPs.

The department has also increased the threshold for registering embedded generation from 1 MW to 10 MW. "There has been a lot of noise that it should have been 50 MW. Our research and survey of 10 000 people who responded … there is overwhelming support for the 10 MW." Mantashe said that government was doing things the right way by testing the market before implementing.

Mantashe added that the mining industry is also moving toward self-generation, with Gold Fields leading the charge by constructing its licensed 40 MW.

As for budget allocations, the department was allocated R9.2 billion, this is 4.1% lower than the R9.6 billion previously outlined in the 2020 budget. This is because of budget reductions across government, related to compensation for employees.

About 81.6% or the majority of R7.5 billion is for transfers to public entities, municipalities and other implementing institutions.

Eskom is allocated R2.8 billion and municipalities are allocated R2 billion to support the Integrated National Electrification Programme. About R232.3 million is allocated to various service providers for the implementation of the Non-grid Electrification Programme and R220.9 million is allocated to municipalities for the Energy Efficiency Demand Side Management Programme.

Public entities of the department such as Mintek, the Council for Geoscience, the SA Nuclear Energy Corporation, and Petroleum Agency of SA, are allocated a collective R2.1 billion.

An allocation of R70 million is earmarked for the National Electrification Master Plan to assist the implementation of the electrification programme.

On the legislation front, the department plans to table the Upstream Petroleum Bill, which has been approved by Cabinet, within the coming weeks. The National Nuclear Regulator Amendment Bill has been approved by Cabinet and will be published for public comments, the aim is to have the bill tabled in Parliament in the current financial year.

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