FOREWORD - Taking advantage of emerging innovations

Publication: 01 June 2017 | Mining Prospectus

Almost as fast as technology makes it possible, the world is moving away from centralised, large-scale energy generation. Governments now need to make it easier for industry and consumers to pursue this route in the national interest and not be held back by the narrower interests of electricity-generating utility companies.

One of the sectors starting to take advantage of emerging innovations is mining, which has been hit hard recently by production disruptions due to load-shedding, trimming of their normal supply levels, and rocketing prices. Rapid strides in renewable energy technology has allowed mines to start exploring greener avenues, although the need for baseload supply must still govern their current options.

Notwithstanding the baseload requirement, mining heavyweight Sibanye has thrown its weight behind the opportunity presented by solar photovoltaic (PV), earmarking some R3 billion for an independent power project based on solar energy. The miner says its research is unequivocal: solar energy costs have already dropped to a level comparable to Eskom's grid prices and will continue downward while Eskom's prices will only rise. Another breakthrough appears to be on the horizon that will begin to take the base­load argument forward into new and more fertile territory: battery storage. An indication of this came from battery innovators Tesla, who tellingly chose to exhibit at the Investing in African Mining Indaba earlier this year in Cape Town. If mines have doubts about how high-capacity batteries can be used to store energy from non-continuous sources, Tesla clearly does not.

This broadening space for localised generation is not only good news for industry, who can now choose from a growing range of technological sources and can pioneer new collaborations with other energy users, it is also good news for government. While the state cannot abdicate its responsibility to facilitate the availability of electricity to all, it can cut down on the amount of high-interest debt it must incur for funding expensive energy projects.

Of course, there is one possible loser in all this: the monopoly utility, Eskom. However, the real point is that government cannot fully leverage the power of localised generation - be that from renewable or fossil fuel sources-unless Eskom's role is well defined and controlled. Industries like mining are major energy users, and their efforts to find sustainable solutions-largely at their own cost-should be encouraged and supported by the state. Independent power production at local level may be one of the answers.

Roger Dixon, Marcin Wertz, Andrew van Zyl, Peter Shepherd, Darryl Kilian and Warrick Stewart of SRK Consulting





SRK Africa