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Miner progressing wind projects to support embedded generation

Image of Sibanye-Stillwater head of energy and decarbonisation Jevon Martin

JEVON MARTIN These projects will displace around 25% of our South African power requirements and emissions, and will help in our commitment to carbon neutrality by 2040

16th December 2022

By: Cameron Mackay

Creamer Media Senior Online Writer


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Diversified miner Sibanye-Stillwater is procuring wind energy capacity from independent power producers. The miner issued a request for information last year, indicating that it was looking to secure up to 250 MW of remote wind generation.

The miner then opted to pursue more capacity based on the positive market response.

“When we went to market, we were surprised by the number of responses and were offered a number of projects at very competitive pricing. As a result, we opted to run a request for proposals process, which was concluded at the beginning of this year. Through this process, we secured three projects with a cumulative capacity of 328 MW,” explains Sibanye-Stillwater energy and decarbonisation head Jevon Martin.

This capacity comprises wind energy generation projects of 89 MW, 99 MW and 140 MW, for which Sibanye-Stillwater has negotiated power purchase agreements (PPAs). To date, the commercial terms for one of the projects has been finalised.

“The PPAs have been negotiated with supporting agreements. The projects are well developed, so we’re hoping that these projects will move to financial close in the second quarter of next year.”

Sibanye-Stillwater’s intention when going to market was to identify “shovel-ready projects” that had access to the grid, which the miner recognised as a significant constraint in terms of energy generation.

“For these projects, we have only a small number of outstanding permits. We’re working with the appointed project developers to obtain the rest,” adds Martin.

These power projects will be delivered through wheeling – the delivery of energy from a generated source of energy to an end-user in another location – through the use of an existing distribution or transmission network.

Martin says wheeling affords Sibanye-Stillwater the flexibility to allocate energy credits to any one of its operations, which can also be amended on a monthly basis.

“Many of our customers are keen on low-carbon products, so we look to serve some of those needs in respect of renewable energy, ensuring that we reduce emissions. We’re, therefore, able to serve critical markets, such as Europe, which have very stringent requirements around carbon intensity. There’s an opportunity to potentially create a differentiator for our commodities through a low-carbon offering.”

Eskom Reliance

Martin points out that State-owned power utility Eskom contributes about 90% of Sibanye-Stillwater’s Scope 1 and Scope 2 emissions.

Therefore, substituting a portion of Eskom supply with renewables is one of the simplest ways of decarbonising for the miner, he adds.

The wind energy projects – as well as the company’s solar photovoltaic projects to support its gold mining and platinum group metals operations – will support about 25% of Sibanye-Stillwater’s power requirements in South Africa.

He lauds the recent regulatory amendments that have made it possible for Sibanye-Stillwater to pursue these projects.

These amendments have been vital for the local energy space, as government is running out of fiscal capacity to continue to support projects under the Risk Mitigation and Renewable Energy Independent Power Producer Procurement Programmes, he adds.

This also creates a gap for the private sector to “step in” and provide the necessary additional capacity required to close the electricity deficit and end loadshedding, he points out.

The deficit is currently between 4 GW and 6 GW, and Eskom anticipates this to reach about 10 GW by 2034.

“These renewable-energy projects are our primary decarbonisation lever in our commitment to reach carbon neutrality by 2040. Eskom will also offer electricity at a discount of about 20% to 30% to prevailing tariffs at the moment, which will reduce our cost base and enable long-term sustainability,” he concludes.

Edited by Nadine James
Features Deputy Editor


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