Energy Minister Jeff Radebe has urged the mining sector to take advantage of the lower cost of renewable energy and incorporate this cleaner technology into mining operations.
This was a crucial part of the urgent need for the country to move towards greener production.
But the Energy Intensive Users Group has warned that integrating renewables into mining production is not as simple as it sounds. It also warned that Eskom’s proposed price hikes would have a big negative impact on the mining sector’s ability to stay competitive in a tough global market.
Radebe was due to deliver the keynote address at a SA National Energy Development Institute (Sanedi) function on the sidelines of the Mining Indaba in Cape Town on Tuesday, but was unable to attend.
His speech was delivered by Department of Energy's acting deputy director general Mokgadi Modise. Radabe said South Africa’s economy was energy intensive, particularly in the mining sector.
It was crucial that collectively the country moved toward “greener, cleaner” production.
“Industry, transport and the building sectors all cut across the mining sector and will need to use more renewable energy, coupled with energy efficiency,” Radebe said. When renewable energy was first introduced in to South Africa in 2011, there had been concern about the cost.
Now the price of solar and wind had dropped globally and the cost of wind and solar PV electricity generation was very competitive.
“The mining sector has to take advantage of proven, reliable and affordable initiatives that would enhance efficiency into its operations, such as introducing renewable technologies and industrial energy efficiency initiatives to produce more with less,” Radebe said.
In a panel discussion afterwards, Hugh Stewart, representing the Energy Intensive User Group of SA, said the renewable energy debate was a very important one for this group.
“About 90% of electricity generation in South Africa is fossil fuel generated, so we appreciate the need to transition from there.”
The group consumed about 40% of all electricity generated in the country. About half of its 31 members were from the mining sector, and it contributed 22% to GDP.
Stewart said the mining sector had done a lot of work on energy efficiency, and had taken steps such as changing vehicles underground from diesel to electric. There was also a lot of work being done on co-generation, such as heat recovery projects in the smelting sector.
One of the big problems the mining sector faced was the rising cost of electricity. Eskom tariff increases in the pipeline would have a negative impact on energy intensive groups.
These industries were price-takers on the global market, so it was critical they do everything possible to stay competititive.
“Our first priority is the survival of the industry, which has challenges, especially energy cost,” Stewart said.
The sector was looking for solutions that would ensure a reliable electricity supply and were affordable. This included renewable energy.
“But we want to caution against the over simplification of these technologies. As we downscale on coal, how can these take its place?” Stewart said. One of the problems was that coal-fired power stations could not be ramped up or down quickly enough at the times when one wanted wind power to generate electricity.
There was no optimal way of integrating wind power in this way.
“We need to understand how this can work.”
Stewart said the mining and other energy intensive users also needed to understand what a “just transition” entailed in the move away from coal.
“We need to understand fully the socio-economic impact as we scale down on coal. What is the ‘just transition’ process and what does it entail?”
Stewart said the independent power producers in South Africa did not carry much risk.
“They need to play their part in the just transition.”