- Cost-efficient, stable and clean energy is critical to any business but especially mines.
A stable electricity supply is of particular concern for South African mines – the mining industry was quick to take advantage of President Cyril Ramaphosa’s announcement in July of the removal of the 100MW cap on licence-free embedded generation projects.
According to the Minerals Council South Africa, their members have planned more than 6,500MW of embedded energy projects in the pipeline, forming the bulk of the more than 8,000MW of energy projects the private sector has indicated to Nersa it wants to develop.
The 89 projects by 29 mining companies represent more than R100-billion.
A point in case would be Palabora Mining Company, which has contracted Mzansi Energy Consortium to develop a 132MWp solar PV plant and battery energy storage system capable of storing 310MWh of electricity.
The Marula Green Power Plant is expected to be rolled out over two stages. The first stage is construction, with the second stage being operation and maintenance. Commissioning should reduce load-reduction-driven power cuts for PMC and support applications like energy arbitrage and demand savings.
The second parallel phase is the construction of the 132MWp solar plant and transmission lines to PMC, which will be commissioned in the fourth quarter of 2024. The Marula Green Power Plant will be funded through a limited recourse project finance structure with zero cost to the mine and is expected to reach a financial close in the second quarter of 2023.
For now, these timeless are preliminary and may change based on the outcome of the details feasibility study currently underway. Once deployed, the project would be one of the country’s largest IPPs. It is expected to provide the mine with security of supply and significant cost savings.
Wessel Wessels, CEO of Journey2Green (a founding partner in Mzansi Energy), says a long-term Power Purchase Agreement (PPA) will be finalised between the parties at the end of the Detailed Feasibility Study in the six to eight months from October 2022 to the end of May 2023. “Mzansi Energy will design, finance, install, operate and maintain the plant for 12 years.
“The plant will be based within the municipal jurisdiction of Ba-Phalaborwa, Limpopo, just outside Namakgale township, and will be approximately 20km from the mine. The location is strategically chosen to allow for direct supply to the mine without connection to the Eskom grid,” explained Wessels.
Tumi Mogoera, Associate Director of Summit Partners (founding partner in Mzansi Energy), says the project is a step towards helping South Africa address its electricity challenges. “Additionally, the Marula Green Power plant will contribute to our nation’s Just Energy Transition (JET) net zero carbon emissions strategy,” said Mogoera.
Mzansi Energy has partnered with the local traditional authority as per the study performed for identification of the ideal location subject to final Environmental Impact Assessment (EIA).
The authority will host the solar power plant on its land and enter into a long-term lease – the long-term lease is conditional on specific socio-economic benefits for all local Ba-Phalaborwa communities in areas such as business opportunities for SMMEs, skills transfer and development and job creation.
Find out more about the nexus of power and mining
While many of the mines have been planning for this day for a while, others are still at the beginning stages of figuring out whether to procure their own power or enter into wheeling agreements and just what they need.
This week ESI Africa, Enlit Africa and Mining Review Africa host a series of daily digital dialogues touching on this topic – exploring the nexus of power and mining.
Join them as they try to understand the reasons for considering moving beyond the grid, the implications for the bottom line and what companies need to factor into their decision:
Wednesday 23 November Power and Mining: Anticipating storage
Thursday 24 November Power and Mining: Defining energy security
Friday 25 November Power and Mining: Project post-morte
Author: Theresa Smith
Theresa Smith is a conference producer for Vuka Group.
This article was originally published on ESI Africa and is republished with permission with minor editorial changes.
