Energy Minister Jeff Radebe deserves a pat on the back for opening the way for businesses to generate their own electricity. Just about every mining company that one speaks to these days tells you that generating renewable energy for its operations will take it down the cost curve and give it crucial energy security.

Mining Weekly’s associate publication, Engineering News, has obtained confirmation that Radebe has written a letter to National Energy Regulator South Africa (Nersa) informing it that it may consider granting licences to projects that have a combined capacity of 500 MW, and that this may be done without the developer having to seek Ministerial permission for a deviation from the Integrated Resource Plan (IRP).

Nersa, in turn, has confirmed that it did indeed receive Radebe’s letter, in which the Minister notified Nersa that he had approved the deviation from the IRP.

Now that Nersa has been given this nod, we trust that it will respond efficiently. The country needs to see structured action by Nersa.

At the same time, the Minister and his officials must understand that, to make the self-generation of electricity meaningful, more clarity must also be forthcoming about the right to ‘wheel’ that electricity along the national electricity grid.

There is no point in a mining company being granted permission to establish a significantly large renewable-energy plant and to then be told that it may not use the national grid to distribute that energy to another one of its shafts or group mines that may be some distance away.

In the meantime, Radebe’s latest move will joyfully take hundreds of projects out of the limbo they have found themselves in, owing to the absence of a policy framework for projects larger than 1 MW, even when those power plants were for own use.

It is wonderful that South Africa’s private sector, hurt by load-shedding, will now be able to go ahead and arrange their own sources of lower-cost power.

The new bottom line is that the South African mining industry is in a strong position to use its abundant sun and prime wind to reposition itself as an investment destination of choice.

While increasing energy security for their businesses, as well as for South Africa at large, mines using renewable energy will also bring the country down the energy cost curve and stop it from being taken up the cost curve.

At the same time, South Africa will be heeding the call of the world to emit less carbon into the air and to do its bit to combat climate change.

Eskom will not need to build new capacity, will not have to sign new power purchase agreements and its costly use of diesel during peaks will also no longer be inevitable.

Importantly, building and operating solar, wind and flexible generation technologies will create more jobs than any of the alternatives, and South Africa is duty bound to create more employment.