Murray & Roberts Puts Power Sector Growth Hopes On Private Renewable Energy Projects

Murray & Roberts are hoofkantoor in Bedfordview, Johannesburg. Photo: Verskaf

  • Murray & Roberts’ power company faced a tough work environment.
  • Company CEO Henry Laas said the unit is struggling to keep its head above water.
  • Renewable energy opportunities in the mining sector could bring relief to the company.

Murray & Roberts hope that recent reforms in the country’s energy sector will boost its loss-making electricity business, following the government’s announcement to increase private participation in power generation.

The engineering and mining company said its electricity trading platform had no major projects in the near term, and new major project awards over the next six months were limited. However, some green shoots were starting to emerge in the form of the Independent Renewable Power Producers Supply Program (REIPPP) and self-generation projects are underway for some of the country’s intensive electricity users.

“REIPP Window 5 opens up opportunities for participation,” said Steve Harrison, head of the company’s Power, Industrial and Water platform.

“We will likely see rewards and income generated over the next 9-12 months.”

In March, the Ministry of Mineral Resources and Energy opened bid window 5 for REIPPP, which will provide an additional 2,600 MW of renewable energy from independent power producers (IPPs).

As part of strengthening its business, Murray & Roberts is bidding for some Eskom tenders, but describes the process as slow.

“Hopefully some of these awards come sooner rather than later, but they’re currently being auctioned off,” Harrison said in an investor presentation.

With an order book of Rand 0.4 billion, which the company’s CEO Henry Laas described as insufficient to “support a sustainable business”, opportunities in the renewable energy sector could be the essential panacea for get the company out of the doldrums.

“It is currently a loss making company, the opportunities are there but the timing of those opportunities is uncertain,” Laas said.

Figures provided by the company showed its order backlog in 2016 was R6.7 billion, and at current levels, Laas said the company is working to keep its head above water. in difficult conditions.

As the power platform struggled, the Energy, Resources and Infrastructure and Mining platforms were described as the “drivers of profitability” for the company.

Mining potential

Murray & Roberts’ participation in the power sector will extend to development projects with consortia or development partners to provide power to private users under power purchase agreements long term, as well as secure engineering, procurement and construction.

Renewable power generation projects planned by mining companies to reduce their dependence on Eskom’s unstable power supply present another growth prospect for the company, the Minerals Council of South Africa indicating that there was potentially R 27 billion that miners could invest in power generation. 1.6 GW of electricity acquisition projects.

Companies such as Harmony, Anglo American Platinum and Gold Fields have presented their renewable energy plans for the future.

In May, Gold Fields said its board of directors approved a R660million construction of a 40MW solar power plant at the company’s South Deep gold mine, after obtaining a license from the National. Energy Regulator of South Africa in February.

Following the government’s announcement this month to increase the exemption threshold for corporate self-generation licenses to 100 MW, Gold Fields said it could potentially increase the plant’s capacity to 70 MW, with possible extension to other identified sites.

AngloPlat’s pilot projects include our 75 MW solar photovoltaic project at its Mogalakwena surface mine in Limpopo.

“The appointment of a developer will be approved internally in September and we expect the plant to be operational by the second quarter of 2023, subject to required approvals and project development schedules,” according to the company.

Gold producer Harmony also intends to source renewable energy and significantly reduce its dependence on Eskom by 2030. The process will enable it to acquire 30 MW of solar power and eventually to go to 100 MW, with a gradual construction of a solar power plant which should start this year.

The company’s alternative energy project would also include other renewable sources. Solar projects would reduce dependence on generated electricity by 4%. Eskom still controls most of the country’s electricity production.

Rosemary C. Kearney