TED BLOM: “More than 30% of SA
mining projects could be terminated prematurely due to additional power costs”
African Utility Week & POWERGEN
Africa to focus on large power users in May
“More
than 30% of South African mining projects will be terminated prematurely due to
additional power costs if suitable solutions are not found within the next 12
months” says Ted Blom, independent power and mining expert and commentator and
a partner at Energy & Mining Advisors.
His comments follow Mineral Resource and Energy Minister Gwede Mantashe’s
announcement last week that the government had conceded that it must allow
mining companies to produce energy for their own use. Ted Blom adds: “most
mining projects in Africa provide their own power for operations, but that just
increases the hurdle rate for committed capital to develop and run the project.
The big difference is that provision of own power is already factored into
those projects whilst South African projects have NEVER factored in the costs
of providing own power.”
Power or the lack of sufficient supply in the mining industry was a hot talking
point at Mining Indaba in Cape Town last week. Ted Blom: “the whole South
African mining and beneficiation sector was built on the back of cheap and
abundant electricity availability. The current environment has changed
drastically and most business (including miners and smelters) have NOT seen
this coming. Only in the past two years has business started waking up to the
new reality, but NONE have reviewed their business models to incorporate the
new electricity reality.”
The full interview with Ted Blom can be viewed here:
Enormous leap forward
“Power at this year’s Mining Indaba undeniably took centre
stage” says Laura Cornish, editor of leading mining trade journal, Mining Review Africa: “including the Minister’s
declaration that mining companies in South Africa can move forward and do not
need to go through any regulatory tape to produce their own power on site.
Should this promise come to pass, it could see the mining sector take an
enormous leap forward in garnering financial investment.”
“Allowing
mining companies to essentially become power producers is fantastic” agrees
Nicolette Pombo-van Zyl, editor of the power publication, ESI Africa, adding: “it could even lend itself to pushing
South Africa’s energy mix ratio to be more inclusive of renewables and
eventually tip toward a decentralised market model. However, let’s take a step
back. It isn’t the core business of mining and manufacturing to be power
producers. Their investment into power plants will ultimately be primarily for
own-consumption, with a questionable impact on supply to the national grid.
However, I’d like to speculate that once regulation is signed into law, the
spin off business opportunities will be reflective of an energy transition.”
City of Cape Town’s case
Kadri Nassiep, the Executive Director of Energy at the
City of Cape Town says “the City’s court case in which it seeks clarity with
respect to the role of municipalities in the purchase of electricity from
sources other than just Eskom is a ground-breaking issue and potentially an
exciting one for the sector as a whole. If the courts rule in favour of the
City it will trigger a public tender process to bring additional generation on
stream, mostly from independent sources. This will open the door for other
municipalities to follow suit and in the process, relieve some of the
burden imposed on Eskom by the current legislative and regulatory framework.”
The hearing is scheduled for May this year.
Kadrie Nassiep’s full interview can be viewed here.
Load-shedding to continue
A recent report by the Council for Scientific and Industrial Research (CSIR)’s
Energy Centre, analysing South Africa’s load-shedding, indicated that it cost
the country’s economy between R60 billion and R120 billion in 2019 alone.
The
total economic impact of load-shedding in South Africa could be as high as R338
billion over the past 10 years, according to the report titled Setting up
for the 2020s: Addressing South Africa’s electricity crisis and getting ready
for the next decade. The CSIR warned that load-shedding was expected to
continue for the next two to three years as the country will sit with a supply
gap until 2022. Read more here.
Commercial & Industrial sectors
At the upcoming African Utility Week and POWERGEN Africa in
Cape Town from 12-14 May, the power and energy challenges in and success
stories of the Commercial & Industrial sectors on the continent
will be unpacked.
Dedicated session topics will include:
– Harnessing the power of self-generation in the Commercial & Industrial sector
– Small Scale embedded Generation for the Commercial & Industrial sector
– Productive Use of Power as critical to mini-grid development and sustainability
– Funding for effective mini-grid project rollout and scale up
– The A-Z of successful deployment of hybrid technology mini-grids
– Batteries for your renewable energy system: factors to consider
About the organisers
African Utility Week and POWERGEN
Africa is the flagship energy event organised by Clarion Events
Africa, a multi-award-winning Cape Town-based exhibition and conference
producer across the continent in the energy, infrastructure and mining sectors.
Other well-known events by Clarion Events on the continent include Future
Energy East Africa, Future Energy Nigeria, the Utility CEO Forums, Nigeria
Mining Week, DRC Mining Week and Africa Mining Forum.
Clarion Events Africa is part of the UK-based Clarion Events Group and African
Utility Week and POWERGEN Africa forms part of Clarion Energy,
which runs over 40 events that cover the oil, gas, power and energy sectors,
making it one of Clarion Events’ largest portfolios.
Dates and location for African
Utility Week and POWERGEN Africa:
Conference and expo: 12-14 May 2020
Location: CTICC, Cape Town, South Africa