Raise licencing threshold to create jobs, help plug energy gap - Minerals Council

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Roger Baxter, Photo: Elvira Wood
Roger Baxter, Photo: Elvira Wood
elvira wood
  • The Minerals Council South Africa wants the registration threshold for embedded generation to increase from 10 MW to 50 MW.
  • Mineral Resources and Energy Minister Gwede Mantashe previously said the market is not ready for 50 MW.
  • The council asserts that a cap of 50 MW will provide more than 5 000 MW of much needed energy capacity, while also protecting and creating jobs.

Contrary to Mineral Resources and Energy Minister Gwede Mantashe's statements that there is "overwhelming" support for the licence threshold for embedded generation to be lifted to 10 MW, the Minerals Council of South Africa wants the threshold to be raised to 50 MW.

Last week, while tabling his department's budget vote virtually in Parliament, Mantashe said that there is a lot of "noise" that the threshold should have been lifted from 1 MW to 50 MW. "Many in the market say we are not ready for the 50 MW," he said.

The minister also claimed that a survey showed 10 000 people were supportive of the 10 MW. The department later clarified that Mantashe was referring to the comments received for the gazetted 10 MW, EE Business Intelligence previously reported.

The Minerals Council South Africa on Monday, however, issued a statement calling for the threshold to be raised to 50 MW.

"A limitation of 10MW may unlock embedded generation for commercial operations, but it will not enable investment in larger self-generation projects for larger industrial or mining operations.

"A cap of 50MW will allow for more than 5 000 MW of new mostly renewable electricity generation to be unlocked through investment by the private sector. This electricity will not compete with Eskom, but will provide desperately needed supplementary supply that will help stabilise the grid and enable the economy to resume a higher level of growth," said Minerals Council CEO Roger Baxter.

Baxter added that Eskom does not have enough reliable electricity generation capacity to keep the lights on, or the extra electricity supply to support higher economic growth.

Unlocking 5GW of new electricity supply capacity will not cost the government a cent and will protect up to 80 000 jobs, create up to 70 000 additional jobs, and unlock up to R150 billion in capital investment across the economy.
- Roger Baxter

The Minerals Council lamented that in 2020 alone, load shedding cost the economy between R80 billion and R160 billion.

This week the Department of Mineral Resources and Energy (DMRE) and the Independent Power Producers Office (IPP Office) will host the bidders conference on Wednesday, for potential participants of bid window 5 of the Renewable Energy Independent Power Producer Procurement Programme.

"The conference will allow all stakeholders to engage with members of the DMRE and IPP Office on queries or clarification questions in relation to the released RFP," the department said in a public invitation issued on Friday.

Requests for Proposals for the latest round were issued on 12 April 2021. Government seeks to procure up to 2 600 MW of renewable energy to assist in plugging the energy capacity gap estimated to be between 4 000 MW and 6 000 MW over the next five years.

Government has not procured new renewable energy power since 2014, when the last bid window of the REIPPPP.

The 1 000 MW from solar PV and 1 600 MW from wind projects from this round are expected to come to commercial operation by 2024.

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