South Africa’s ongoing electricity crisis – caused by aging coal-fired stations, lack of critical maintenance, and system neglect – has led to supply disruptions and rolling blackouts known as load-shedding, to prevent the total collapse of the power system controlled by state-owned Eskom.
The effects of this have been multifold. According to Jannie Rossouw, Head of the School of Economic and Business Sciences at the University of the Witwatersrand, load-shedding has caused a significant decline in economic activity, growth and investment across the country. According to Rossouw’s estimates, South Africa has lost approximately R1.2 trillion due to load-shedding, which suggests that the economy could be up to 25% larger without frequent power outages. Unfortunately, unless additional capacity is secured, Andre de Ruyter, CEO of Eskom, has announced that load-shedding will continue over the next five years.
With blackouts ongoing across the country, South Africa’s industries have been largely impacted, resulting in a slowdown of economic activities due to intermittent power supply. As a result, several industries are turning to alternative power generation solutions, primarily within renewables, to mitigate supply disruptions and ensure continuity of operations. The mining industry represents a critical opportunity for the deployment of renewable energy as a means of ensuring sectoral stability and growth. By presenting integration opportunities between increasing electricity demand by mines and renewable energy power solutions, the mining industry can drive renewable sector growth and increase installed capacity. Additionally, opportunities within the agriculture sector have emerged, giving rise to a new form of sustainable agriculture built on the backbone of solar photovoltaic (PV) solutions. By utilizing renewable energy solutions and establishing multi-sector integration, South Africa can initiate country-wide socioeconomic growth in spite of an unreliable national grid.
Off-Grid Renewables to Support Mining Operations
South Africa is currently the largest producer of chrome, manganese, platinum, vanadium and vermiculite globally, as well as the second largest-producer of gold. The country’s mining industry contributed 8.3% of total GDP in 2019– equating to R376.4 billion – of which total mineral export sales were estimated at R361.7 billion. Traditionally a fossil-fuel reliant industry, the mining sector is increasingly realizing the benefits of internal renewable power generation, following significant operational disruptions due to unreliable electricity from the national grid.
“While Eskom’s baseload supply is still vital to keep mines running, independent power generation from renewable sources hold value. Being partially off-grid will make mining companies less vulnerable to the full impact of load-shedding, which is very disruptive to continuous operations as found in the mining industry,” stated Andrew van Zyl, Director and Principal Consultant of SRK Consulting, in an article by Mining Review.
There has been significant progress in integrating renewables into the mining sector. Various mining companies are developing solar power plants, including a 40 MW plant proposed by the South Deep Gold Mine, a 200 MW plant by Sibanye-Stillwater, a 75M MW facility by Anglo-American and a 200 MW plant by Vedanta. By maximizing renewable opportunities, mining companies will be able to address supply, cost and environmental challenges, ensuring continued growth throughout the sector.
Agriculture to Harness Solar Potential
South Africa has a highly diversified and market-oriented agricultural economy, with chief exports that include citrus, wine, table grapes, corn and wool. In 2019, the agricultural sector contributed approximately 10% to South Africa’s total export earnings – equating to R155.8 billion – and continued to see positive growth and contribution to the country’s GDP throughout 2020. According to a case study by the Western Cape Government, most agricultural activities are powered by diesel and are facing mounting environmental pressure to shift toward cleaner power sources. Accordingly, there is a sizeable opportunity for the integration of renewable energy into agricultural activities, particularly regarding the utilization of solar PV.
A report from GreenCape highlights that the market for renewable energy in agriculture in 2019 was valued at an estimated R960 million in South Africa. With renewable market growth expected to increase by 10% per year – and one in 10 South African solar installations occurring in the agricultural sector – renewable energy is rapidly becoming an important tool for reducing operational costs, ensuring sustainability and driving GDP contribution through the increase in agricultural activities.
The utilization of renewable energies within mining and agriculture sectors is both supporting the continuation of economic activities via a reliable electricity supply and ensuring sustained GDP growth. As South Africa increases the role of renewables in its energy supply mix through the implementation of its Renewable Energy Independent Power Producer Procurement Program – a comprehensive strategy for augmenting renewable capacity – the country will not only emerge as a regional leader in the clean energy transition, but also establish a stable energy supply for years to come.