Richards Bay Minerals (RBM) has signed a power purchase agreement that will more than double its access to renewable energy and bring the total share of renewables in its energy mix to more than 40%.
Werner Duvenhage, MD of RBM and Rio Tinto Iron and Titanium African Operations, said the 20-year power purchase agreement with project developer African Clean Energy Developments will reduce their reliance on carbon-intensive energy from Eskom and also offer some protection from future Eskom tariff increases.
“The project is financially beneficial for us compared to the current rates we are paying at Eskom, especially during winter when our rates are significantly higher. The financial benefit will improve over time as Eskom rates increase which we expect to continue at a pace higher than inflation,” he said.
The Khangela Emoyeni Wind Farm, which was expected to reach commercial operation within 28 months, will have an export capacity of 140MW and produce about 460GWh of renewable energy annually.
This will be sufficient to reduce RBM’s reliance on Eskom-generated electricity by 26% and it will reduce the company’s annual carbon emissions by about 20%.
In 2022 RBM signed a similar agreement for the Bolobedu Solar PV plant in Limpopo with Voltalia. The Bolobedu solar PV project, now in progress, is expected to meet 17% of RBM’s power consumption by generating up to 300GWh of renewable energy per year.
Combined, the Khangela Emoyeni Wind and Bolobedu Solar projects will supply about 42% of RBM’s existing energy needs.
James Cumming, GM of African Clean Energy Developments, would not divulge the investment value of the project but said it was a multibillion-rand project.
At 140MW of installed capacity, this will be one of the largest wind farms in SA. Cumming said it will be located in an area straddling the provincial border between the Western Cape and Northern Cape.
The project is being financed through debt and equity and, while RBM would not contribute to capital expenditure, the power purchase agreement with RBM that secures offtake for the next 20 years provides the necessary certainty for the project to proceed, said Cumming.
The mining sector has been one of the main drivers of investment in private sector renewable energy development since the market opened for independent power producers.
A recent report on growth potential in the SA renewable energy industry estimated that an additional 4,000MW of wind power would be procured for private offtake up to 2030 at an investment value of about R100bn.
The report by GreenCape, a nonprofit organisation dedicated to promoting the growth of SA’s green economy, said opportunities in the renewable energy market were fast shifting towards projects intended for private offtake given the slow implementation of the government-backed renewable energy programme.
It said at least half of the 22GW of renewable generation capacity expected to be added by 2030 — about half of Eskom’s installed capacity at present — would be for private offtake.
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