Energy Action Plan makes progress

Thursday, March 30, 2023

Mineral Resources and Energy Minister, Gwede Mantashe, says the Energy Action Plan (EAP) that government has implemented to address the electricity crisis is beginning to make progress.

Mantashe was addressing the North West Mining and Energy Investment Conference on Thursday.

State power utility Eskom announced earlier this month that at least six coal-fired power stations achieved an Energy Availability Factor (EAF) of 70% for the first time since May last year.

Mantashe said government is committed to resolving the country’s energy challenges guided by the optimal energy mix envisioned in the Integrated Resources Plan (IRP) 2019 and - as envisioned in the EAP - to improve the performance of existing Eskom power stations.

“Our approach is further guided by the need to improve Eskom’s EAF through adequate maintenance and servicing of existing coal-fired power stations, the procurement of emergency or short-term power, the purchase of electricity across our borders, and improving skills capacity at Eskom.

“In this regard, we are encouraged by the recent report by Eskom that there have been notable gradual improvements in the EAF… This shows progress from the commitments made in the Energy Action Plan aimed at improving the performance of Eskom’s existing power stations,” he said.

He said the EAP’s plan on embedded generation licensing is also beginning to bear fruit, with some mining companies making use of the opportunities for self-generation.

“Other notable improvements in the action plan include the reforms made to embedded generation, where the licensing threshold has been removed. We are pleased that mining companies are increasingly leveraging on these reforms.

“Following Gold Fields’ success in the construction of a solar plant to boost its energy reliability, Seriti is constructing a wind project in Mpumalanga, and Exxaro is constructing a solar plant to supply electricity to their Grootegeluk mine.

“Through these reforms, government has enabled policy and regulatory certainty, therefore, it is incumbent on individual companies to leverage on them. We hope to see more and more registrations in this regard,” Mantashe said.

Economic recovery and transformation

Mantashe acknowledged the current economic difficulties, which are due to “upheavals and uncertainty in the domestic and global markets”, electricity disruptions, logistical backlogs on rail and at the ports and ongoing “geopolitical dynamics”.

“All these challenges have a direct impact on the rising cost of living. The increases in food and energy prices, rising interest rates, and inflation have a compounding negative effect on economic recovery.

“It is against this backdrop that the department… decided to convene these Mining and Energy Investment Conferences, not only to promote investments in these key sectors of our economy, but to also engage constructively and openly with all those concerned with the growth and transformation of our economy.

“The struggle for transformation and the creation of an inclusive economy affects all the institutions within the mining and energy sectors,” he said.

In this regard, Mantashe said, government has earmarked the North West, Limpopo and the Northern Cape as key provinces going forward for mining exploration in the country.

“Noting the progress made following the gazetting of the [exploration strategy] and its implementation plan in April 2022, we are currently engaged in an intensive programme of mineral exploration particularly in the North West, Limpopo, and the Northern Cape province.

“We are doing this because we are convinced that this is the new mining belt for our country where new mines can be opened on the back of the discovery of new minerals that have been proven to be critical for a just energy transition,” he said.

Mantashe said a R500 million exploration fund by the Council of Geoscience (CGS), in partnership with the Industrial Development Corporation has already been formed to “enable junior mining and the emergence of new mines”.

“This is deliberately intended to redress the past imbalances wherein the majority of South Africans were systematically marginalised and prevented from owning the means of production, and from meaningful participation in the mainstream economy.

“As we brace ourselves to grow and transform the mining and energy sector, we must be conscious that this will not be an easy task. However, we must ensure that we are not detracted and derailed from growing a globally competitive and transformed mineral and energy sectors,” Mantashe said. –