South African mines must adopt and invest in renewable energy technologies and energy efficiency measures as part of their sustainability measures. This will require a programme of decarbonisation, decentralisation and digitisation.
The minister of energy, Jeff Radebe, speaking to the Energy and Mining Sectors session at the recent Investing in Mining Indaba, held at Cape Town’s International Convention Centre, said that the African continent is home to abundant mineral resources which offer opportunities for the industrialisation of the continent, the reduction of poverty, and to contribute to economic development.
Globally, the mining sector contributes directly and indirectly about 45% of the world gross domestic product (GDP). The mining industry is also a major consumer of energy and is responsible for more than 38% of the total industrial energy use, which translates into the consumption of 19% of coal and coal products, 5% of all gas products, and 2% of the global oil supply. The United Nations Industrial Development Organisation (UNIDO) expects the energy consumption in the mining sector to double by 2050 compared to 2009 unless measures are taken to curb consumption.
In Southern Africa, the energy intensive users group alone consumes over 40% of electricity produced in South Africa. About 48% of the energy intensive users in South Africa are from the mining sector. Fossil fuels, especially coal, continues to supply the world energy needs because coal can provide affordable energy access for the world’s poor, most of whom live in developing regions such as Africa, Radebe said.
Over 75% of energy used in South Africa is generated from coal. The use of coal for energy generation is underpinned by availability, accessibility, reliability and affordability to South Africans.
According to Radebe, the South African, energy department has to ensure that diverse energy resources are available, in sustainable quantities and at affordable prices, to support economic growth, development and poverty alleviation, while taking into account environmental management requirements in line with the country’s National Environmental Management Act (NEMA), National Climate Change Response White Paper and the United National Framework Convention on Climate Change.
Given the need to increase energy supply in a globally carbon constrained environment, South Africa is investing in the development of clean coal technologies such as carbon capture and storage, coal fluidised bed circulation combustion, integrated gasification combined-cycle plant, underground coal gasification and ultra-super critical technologies, he said.
The need to decarbonise, decentralise and digitise
Globally, the energy sector is undergoing a transformation driven by the need to decarbonise, decentralise and digitise. Decarbonisation involves the shifting of the generation, transmission, distribution and usage of electricity towards a lower carbon future. This is dominated by renewable energy, electric vehicles, energy efficiency, new and future fuels (biofuels), and demand side management.
Radebe said that it is estimated that between 2017 and 2025, 44% of global generating capacity will be from renewables with a total of 1600 GW of renewables capacity being added to the sector.
Furthermore, renewable energy (RE) technologies are now more viable as these costs have significantly decreased. For instance, solar production costs have decreased by 73% and wind by 22%. The cost of maintenance of RE technologies has also declined. The cost of Li-ion batteries used is electric vehicles has fallen by 80% since 2010. These decreases should make the deployment of renewables attractive as part of the energy mix and in off-grid mines, he said.
The South African government considers the need to de-carbonise the economy as strategic to the development of the country. In this regard, government has committed to diversify the energy mix by adding cleaner sources of energy such as renewables, he said. The country has also promoted the deployment of energy efficiency and tax incentives have been provided. We encourage all our mining companies to adopt and invest in energy efficiency measures as part of sustainability measures.
Digital technologies, as part of the fourth industrial revolution, will enable and provide infrastructure for more flexible, intelligent, connected and responsive energy systems. Smart grid, asset optimisation, demand response, automated trading, and active energy management, will be applied in the energy sector. This is the impact of the fourth industrial revolution.
It is estimated that there will be 50-billion connected devices – or “things” – globally by 2025 and of this total, US$1-trillion economic value of Internet of Things (IoT) will be invested in the energy sector by 2025. This will lead to a total change in the sector as we know it today.
According to Radebe, South Africa, through its Science and Technology Department, supports hydrogen and fuel cell technologies (HFCT). We believe that once these technologies are more developed and commercialised at large scale, they will have the potential to support climate change and energy security goals in several sectors of the energy system, such as transport, industry, buildings and the power sector.
The adoption of RE and related technologies will increase the demand of minerals and metals required for their production. As an example, cobalt is used for wind technology, electric vehicles and storage technologies. More than 60% of the world’s cobalt supply comes from the Democratic Republic of Congo (DRC), yet access to electricity in the DRC is low. The use of RE and other hybrid technologies will be an enabler for both the mining sector and local communities in the DRC, as well as many off-grid mines in Africa.
The mining sector needs to review its energy consumption patterns to ensure that the sector de-carbonises, decentralises and digitalises. The decreasing cost of renewables, and the proven reliability of hybrid power technologies are now driving the interest of mining companies in renewables, he said.
The just energy transformation trajectory must accommodate natural resource endowment, economic conditions and promote our natural competitive advantage as well as embracing new cleaner and sustainable energy technologies. The mining industry is generally energy intensive. Rising energy costs affects the profitability of mining companies. This demonstrates that the mining sector is intricately and inextricably linked to the energy sector.
It is now more important than ever for the two sectors to hold more discussions to ensure that as the energy sector goes through a just energy transition and transformation, the mining sector is kept abreast of these changes, he said.
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