Electricity For Mining
In this quarterly article series, we explore the benefits of energy wheeling for different industries. This month, we take a closer look at wheeling in the mining sector.
The mining sector is one of South Africa’s hungriest consumers of power, swallowing almost one-sixth (14%) of Eskom’s electricity production. With smelters and refineries included, this number rises to around 30% of the public utility’s total output.
Tariffs take their toll
It is no surprise then that when electricity tariff increases are announced, the impact is deeply felt across the industry. Earlier this year, the National Energy Regulator of South Africa (NERSA) announced a double-digit increase (12.7%) for 2025/2026, followed by further increases of 5.36% and 6.9% for 2026/2027 and 2027/2028 respectively. While this initial increase is well below the 36.15% Eskom originally requested, it is still a hefty price hike.
To put it into perspective, a 1MVA industrial user’s annual electricity bill will now rise by approximately R2.3 million.
And while, in the past, NERSA may have approved lower increases than Eskom has sought, mines should not bank on the fact that this trend will hold. With ongoing economic volatility and persistent power insecurity, organisations cannot assume that future increases will remain at the lower end of the spectrum.
The global sustainability shift
Given these rising costs, coupled with the country’s ongoing supply challenges such as loadshedding, relying on a single energy source is both risky and costly. But this is only one side of the coin: for mines, which are among the country’s largest power consumers, the challenge lies in continuously securing vast amounts of energy while advancing sustainability goals – a balance that must remain at the forefront of the industry’s energy agenda.
Mining is currently one of the largest contributors to South Africa’s carbon emissions; in 2020 alone, the sector was responsible for seven out of every 10 tonnes of CO2 linked to Eskom’s electricity output. This is where green energy comes into play: the global shift towards sustainability and stricter environmental regulations is compelling mines to reduce their carbon footprints.
Investing in renewable energy not only mitigates operational risks associated with power supply disruptions but also aligns with international environmental regulations, ensuring long-term viability and competitiveness in the global market.
Wheeling enters the chat
Electricity wheeling – which sees power generated by an independent power producer (IPP) and sold to a buyer – is a game-changer for mining companies balancing massive power needs, rising costs, sustainability targets and supply challenges
Want to know more about this solution? Check out our Wheeling 101 guide here.
How Energy Wheeling Works in South Africa
While electricity wheeling is not a silver bullet that will completely eradicate the impact of loadshedding as it still relies on the national grid, it forms an important part of energy diversification. Using cheap, green power generated by wheeling, mining organisations can power up their battery energy storage systems (BESS) while reducing their electricity bill and moving closer to their decarbonisation goals.
Why wheel with us?
At SolarAfrica, we produce power at our utility-scale solar farms and then feed this power into the national grid for businesses to purchase at a significantly lower tariff than Eskom’s rates, without the need for available roof or land space as with onsite solar.
Moreover, we also have electricity trading capacity, which means that we can buy and sell energy from various IPPs, offering greater energy choice, savings and flexibility.
With rising costs, power instability, and mounting pressure to go green, the mining industry can’t afford – literally – to rely on a single energy source anymore. Wheeling offers a smart way for companies to cut costs, reduce their carbon footprint and improve energy security without major infrastructural upheaval and expense.
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