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Minister keen to get generation outside of Eskom going soonest

CAPE TOWN (miningweekly.com) – Mineral Resources and Energy Minister Gwede Mantashe is keen to get electricity generation going outside of Eskom as fast as possible with a view to creating a competitive environment that will lower the cost of electricity.

Speaking at a media conference at the Investing in African Mining Indaba, Mantashe said that generation outside of Eskom could be done by the public sector, private sector or a combination of the two, and would be dependent on investor appetite.

The results of the request for information, which closed on Friday, would likely give a good indication of investor appetite and the electricity marketing model being envisaged for emulation was the Dutch model, Mantashe said.

According to Wikipedia, the generation and retail of electricity in the Netherlands are liberalised, and transmission and distribution are centralised and operated by the system operator and the utilities.

“If it were up to me, I’d like to have contractors on site next week,” Mantashe told the media conference in which Creamer Media’s Mining Weekly participated.

“But it depends on how attractive it is to investors. Basically, we think it should happen sooner rather than later because, if we don’t do that, we’re going to see more blackouts, as the decommissioning of some of Eskom’s power stations takes place,” he said.

Power stations already scheduled for decommissioning are Komati, Hendrina and Grootvlei.

“If we don’t move quickly and pre-emptively, we’re going to run into electricity supply problems.

“We’re hoping that by this time next year, we will be able to say there are construction sites building electricity generation capacity outside of Eskom, and when we do that, it will require redefinition of the marketing and the wheeling of energy for various sources.

“It will take us out of the discussion of competitiveness of this technology versus that technology and people will sell the energy through the transmission and compete with their prices. If they are expensive, people will not buy from them, but from other sources. It’s as simple as that,” the Minister said.

In terms of developing generation capacity that can be a substitute for Eskom electricity, Mantashe spoke of the "great potential in gas in the region".

Thereafter, the generation entity would consider further technologies that facilitated more efficient supply and projects able to deliver electricity faster than was the case currently.

"If investors are interested, we’re not going to stop them. It may be a public entity, it may be a PPP (public private partnership), that's okay. It depends on the interest of the investors. If private investors come forward, we’re not going to stop them. We’re going to facilitate it," he said.

SELF-GENERATION OF ELECTRICITY

Most important was to accelerate the process of getting the right to self-generate, which was why a deputy director-general (DDG) of the Department of Mineral Resources and Energy had been put in charge of accelerating specific projects on their passage through the National Energy Regulator of South Africa (NERSA) process.

“If a mining company wants to self-generate and Nersa is delaying it, that DDG is empowered to intervene to speed up the process.

“The essence is the speed with which self-generation will be able to generate electricity for themselves,” said Mantashe. 

Published by Mining Weekly, 3 February 2020

This month's top international coal headlines

  • Atlantic thermal coal prices fall on gas glut, redirected LNG cargoes
    — Platts CTI
  • Bad weather and falling demand put a damper on coal exports
    — BusinessLIVE
  • CRU: how the coronavirus affects global commodity markets — World Coal
  • Atlantic thermal coal prices fall at end of week — Platts CTI
  • Transnet plans to boost the volume of coal transported by rail to Eskom
    — Mining Weekly
  • South African, Botswana coal producers outline prospects for the industry
    — Mining Weekly
  • Chinese demand key uncertainty for seaborne coal market in 2020
    — Hellenic Shipping News
  • SA market sees ‘less and less’ production due to lack of investment
    — Platts CTI
  • SA coal market continues to be premium origin — Platts CTI
  • South African coal remains premium origin in seaborne market — Platts CTI
  • Atlantic thermal coal prices rise although market remains oversupplied
    — Platts CTI
  • European thermal coal prices edge upward with energy complex — Platts CTI
  • Richards Bay prices set to rise on India buying — Southern African Coal Report
  • Minister keen to get generation outside of Eskom going soonest
    — Mining Weekly
  • South African 6,000 NAR coal trades at large premium — Platts CTI
  • Atlantic thermal coal markets remain pressured by gas, oversupply
    — Platts CTI

2020 archive

January 2020
  • Minerals Council calls for coal advocacy group to be established
    — Mining Weekly
  • Govt urges coal sector to step up pace in rolling out clean technologies
    — Mining Weekly
  • Investments in clean coal could save South Africa's coal sector
    — Consultancy.co.za
  • South African thermal coal mood ‘bearish’ amid production drop, rising prices — Platts CTI
  • Cheap Natural Gas Is About to Kick More Coal Out of Europe — Bloomberg
  • NW Europe falls to 7-month low, Richards Bay also down
    — McCloskey Coal Report
  • Coal futures climb, South African prices still well supported — Platts CTI
  • India’s thermal coal imports extend fall as economy slows — World Coal
  • Unprecedented Industrialization Responsible for Uptick in Coal Trading Activities — Coal Trading Market
  • RBCT looks to increase exports from junior miners in 2020 — Miningmx
  • RBCT coal exports decline again — Mining Weekly
  • Gas Exports Have a Dirty Secret: A Carbon Footprint Rivalling Coal’s
    — Bloomberg
  • India cautious over volatile South African coal — Platts CTI
  • "Overvalued" SA begins retreat — Platts CTI
  • RB prices at one-year highs, buyers eye cheaper option
    — Southern African Coal Report
  • South Africa physical keeps firm premium to futures — Platts CTI
  • FOB Richards Bay OTC drops 3% on year — Platts CTI
  • Richards Bay corrects — Platts CTI
  • Indian seaborne interest — Platts CTI
  • US Department of Energy announces funding for fossil energy research and training — World Coal
  • Arbitrage to remain open in SA — Platts CTI
  • BlackRock Inc. will cut exposure to thermal coal — Bloomberg
  • SA prices -- correction in the offing? — Platts CTI
  • Indian thermal coal buyers keep eyes peeled on arbitrage opportunities
    — Platts CTI
  • India looks to replace up to 135Mt of coal imports with domestic output: minister — S&P Global
  • SA prices ease — Platts CTI
  • Atlantic thermal coal markets relatively static amid ‘retreating’ South Africa market — Platts CTI
  • South Africa price stable even with vessel backlog — Platts CTI
  • Richards Bay discounts — Platts CTI
  • SA 'overpriced' bids continue to rally — Platts CTI
  • South African prices a key factor — Platts CTI
  • Colombia-Asia thermal coal arbitrage widens on high South African prices
    — Platts CTI
  • South Africa bids 'aggressive' once more — Platts CTI
  • Tightness heard in South Africa — Platts CTI
  • South African coal remains premium origin — Platts CTI
  • High-CV blending in India — Platts CTI
  • SA bids start to 'roof' again — Platts CTI
  • SA market relatively static — Platts CTI
  • Atlantic physical thermal coal markets quiet with slight price falls — Platts CTI
  • European thermal coal markets begins year with 'no movement': sources
    — Platts CTI

2019 archive

 

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