Mining companies are opting for renewable energy because of Eskom’s unreliable supply of electricity. Gold Fields’ South Deep operations was the first to apply for a ministerial deviation to generate 40 megawatts (MW) of solar power at the Westonaria mine in 2017.
The mine said it was working to move more operations to daylight hours to maximise its solar plant, which is expected to supply 20% of the mine’s demands when it goes online in 2022.
President Cyril Ramaphosa’s recent announcement that the government had increased the threshold for embedded self-generation of power to 100MW means that mines see a greater opportunity to retreat from reliance on Eskom.
Gold Fields’ executive vice-president, Martin Preece, said: “We have already commenced work to increase our underground water dam storage capacity to eliminate pumping activities at night — one of our most electricity-intensive activities. Furthermore, we are looking at what maintenance activities we can shift as well.”
Gold Fields’ plans will simultaneously reduce its emissions, which fuel climate change. Self-generation, if adopted by the mining industry, would assist companies that will have carbon budgets with hefty tax bills on carbon emissions in the future. Carbon budgets are allocated to industries that emit greenhouse gases.
Over the last few years the government has developed sectoral emission targets (SETs) for big polluting sectors. These targets, and a voluntary carbon budget for selected companies, were developed parallel to a carbon tax.
“The SETs frameworks were to be finalised in the 2021-22 financial year, while a mandatory carbon budget would be implemented in 2023, with carbon tax phase two implementation. This alignment between the carbon budget and tax would ensure that the carbon tax enforced the carbon budget [a higher tax rate applied to emissions above the carbon budget],” the department of environment told parliament regarding progress on policies to meet South Africa’s obligations to the Paris Agreement.
Nick Holland, Gold Fields’ chief executive at the time of the announcement, said the benefits of the solar plant at the mine was an important step in the company’s journey to net-zero emissions.
“We expect our investment in renewable and low-carbon energy sources to contribute significantly to our carbon emission reductions over the next few years. Power from the South Deep solar plant will partially replace coal-fired electricity from Eskom, enabling us to significantly reduce our carbon emissions,” he said.
The South Deep plant will comprise 116 000 solar panels and cover an area roughly the size of 200 soccer fields on mine property. The estimated capital investment for the plant is R660-million.
“On South Deep’s current site for the solar plant, where work is already progressing for the approved 40MW project and on track to be completed by Q2 2022, we could potentially expand capacity to 70MW at this site, with further expansion possible on other identified sites on our property,” Preece said.
The solar plant is anticipated to translate into a cost saving of about R120-million a year and will reduce South Deep’s carbon emissions by 100 000 tonnes a year, taking it from 490 000 tonnes to 390 000 tonnes.
The Minerals Council, which represents more than 90% of the industry, is calling for the government to urgently reduce the red tape tied to getting the ministerial determinations that will enable mining companies to self-generate power.
“The mining industry can rapidly bring on board at least 1.6GW, largely renewable and private sector funded, embedded generation projects that are already being planned by mining companies. Initial estimates are that this development could lead to additional short and medium-term investment by the industry solely in embedded generation projects of around R27 billion,” the Minerals Council said.
According to Goldfields, key to the success of any potential future expansion would be the relaxation of arrangements to allow mines to feed excess electricity back into the Eskom grid or to economically viable storage options.