https://www.miningweekly.com

Switch from coal to renewables will not take place overnight

11th September 2020

By: Simone Liedtke

Creamer Media Social Media Editor & Senior Writer

     

Font size: - +

The use of coal is enabling the energy transition, owing to its provision of a basis for the economy to develop, drive wealth and enable economic progress, which, in turn, create and enable the funds for stronger and further investment into renewable energy, says Boston Consulting Group MD and partner Tycho Möncks.

“Very often the discussion is that coal and renewables are enemies –that it’s either one or the other; I don’t think that’s the right mindset [to have],” he tells Engineering News & Mining Weekly.

Möncks acknowledges that, while coal is facing issues from a decarbonisation perspective, the mineral also faces tension in the sense that it is a contributor to global warming, even as it remains a substantial contributor to electricity production, steel and even cement manufacturing.

However, while there is a global trend to move away from fossil fuels, specifically coal, towards renewable energy technologies, Möncks says a switch from coal-fired generation to renewable energy almost overnight will not be feasible for South Africa, as it will have significant economic consequences, such as industrial activity coming to a halt – which the country can ill afford.

An alternative narrative to this is the push for renewable energy to complement the baseload generation from coal and, when required, integrate hydropower or even biofuels to a certain degree.

“Those renewables are growing in their relevance, but, at the same time, in order to ensure the baseload coverage, coal will be needed for power generation for quite some time,” he says.

As an example, Möncks refers to South Africa’s Integrated Resource Plan of 2019, which encourages a decline in coal’s market share, rather than a rapid or hard stop.

Looking at the increasing demand for electricity, of which load-shedding is an unfortunate consequence, it is assumed that the demand for coal will remain relatively stable over at least the next ten years, he says.

In terms of the future of coal mining from a global perspective, the transition away from fossil fuels to renewables “can be done”, but the speed at which that transition takes place should take into consideration the drivers that influence the future.

Two key drivers as a direct influencer are how much electricity is required and what will happen to global supply chains as coal is used less and less.

With the advent of the Covid-19 pandemic, this has already come to the fore.

As economies slowed down or, in some cases, came to a halt, so too did the demand for the commodity.

Another element presented by the pandemic is potential structural changes, which may become permanent. For example, Möncks suggests that the pandemic could be an accelerator for increasingly different ways of working, which implies that the need and demand for office space and transport may be impacted on.

As a final consequence, this will lead to a reduced demand and need for commodities, including coal.

It is for this reason that Möncks encourages coal industry stakeholders to remain as cost competitive and efficient as possible, while applying carbon-friendly technologies, so that the commodity may continue to remain relevant and encourage foreign direct investment into South Africa.

“The attractiveness opinion of South Africa’s mining market is really low,” he adds, noting that this is partially driven by the uncertainty surrounding the Mining Charter and the country’s electricity generation and stability issues, which are critical for mining operations.

Changing this perception and addressing these issues or concerns “would make a huge difference in addressing the competitiveness of the [South African] mining industry”.

In order to get to this point, Möncks suggests that greater clarity and trust in the sustainability of the Mining Charter are required, and this could be achieved by “simply writing it into law”.

In terms of electricity supply, he notes that South Africa has already made strides in this area by lowering the impediments to self-generation through the use of renewable energy technologies, although, unfortunately, the permitting processes need to “be further improved and eased”.

Countrywide Exploration

Further, while concerns surrounding energy supply and the Mining Charter remain rampant in the global mining community, Möncks tells Engineering News & Mining Weekly that South Africa is largely unknown and untraversed in terms of exploration.

“The vast majority of South Africa is just not mapped, and this information is just not available. “So, there might be good minerals and metals that are in the ground, but no-one knows that they [exist yet],” he suggests.

Möncks says that driving countrywide exploration to fully understand and be aware of what South Africa has in its ground “could be feasible” when considering options for future mining.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION