Well done to private sector for responding so promptly to renewables opportunity

25th March 2022

By: Martin Creamer

Creamer Media Editor


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Government lifted the limit on the generation of nongovernment renewables energy and, in no time at all, the private sector delivered firm plans for mainly clean solar power that is the equivalent of another Koeberg power station. Pleasingly, the taxpayer will not be called upon to pay a single cent towards the praiseworthy projects, some of which are already under construction.

In the main, it is the cash-rich mining companies that have come to the fore by taking fixed decisions on the number of megawatts of electricity that will be generated, and the sites where such generation will take place. The energy-intensive mining companies with massive smelting complexes have also revealed some impressive conceptual plans, but the details of these require more time to be spelt out in full. Overall, the far-reaching private-sector response has been very swift – and it is easy to see why. Companies are paying through their noses for electricity that doesn’t even have the benefit of being reliable and secure. In fact, self-generation has become so appealing that some companies are already deciding against the involvement of independent power producers.

This is because it pays long-life mines handsomely to build, own and operate the mainly photovoltaic projects themselves. After all, from a tax viewpoint, mines are permitted to write off capital expenditure in year one of project construction. For those mines that still have several decades to go, building the power plants themselves makes huge financial sense. What’s more, putting South Africa’s great sunlight and prime wind to full use also helps the mines to decarbonise, which their shareholders are vociferously demanding of them.

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Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor



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