A mining perspective on the potential of renewable electricity sources for operations in South Africa

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Stellenbosch : Stellenbosch University
ENGLISH SUMMARY: The economic situation in South Africa has in recent years presented considerable challenges for mining corporations to stay globally competitive. One of the challenges has been the increase in average electricity costs, which contributed especially to large corporates experiencing a rise from 7% to 20% in total operational expenses since 2007. This was brought about by the escalation of cost of the current electricity sources, namely diesel generators and grid connections to the state-owned electricity provider Eskom. Forecasts for the next decade indicate that this trend will continue at similar rates. It is also the case that recurring blackouts or load shedding have decreased the reliability of Eskom. The technological and economic progress of renewable electricity sources in recent years has increased their attractiveness in comparison to the current sources. The use of renewable sources is, thus, a potential opportunity for mining corporations to reduce longterm electricity costs, diversify energy supply, become less dependent on fuel price volatility, decrease greenhouse gas emissions and show green leadership. However, with only one pilot hybrid diesel generator and solar photovoltaic project being realised in South Africa so far, the progress on the renewables front has only recently made it worthwhile for mining corporations to consider renewable sources. The purpose of this research was, therefore, to investigate a possible fit regarding how renewable electricity sources can perform within South African mining operations with their specific characteristics. Consequently, to maximise the contribution to this field, it was important to include in the study, the perspective of mines on evaluating possible electricity sources. The research process consisted of three phases. The first phase comprised a literature review, to investigate the influences on the possible use of renewables for mining operations in South Africa. During the second phase, a literature review was conducted to identify the best approach for the analysis of electricity sources, combining the external environment and an evaluation of internal processes of mining corporations. The multicriteria decision analysis approach was selected. This was followed by an investigation of the different multi-criteria decision analysis methods. The multi-attribute value theory method was identified as the most suitable to be used, with specific adaptations for this study. Previous adaptations to similar cases in energy planning were analysed. The third phase involved conducting semi-structured interviews to reveal the internal evaluation criteria used by mining corporations to evaluate electricity sources. Based on interviews with four mining corporations and five energy companies, the model was created and implemented. The results of the study may contribute to the field of multi-criteria decision analysis and energy planning of mining corporations in that new insights were gained regarding the implementation of a multi-criteria decision analysis method to a corporate, especially mining, environment in energy planning. The outcome showed that the more profitoriented nature and special characteristics of mines had an impact on the selection of evaluation criteria. Previous multi-criteria decision analysis approaches were conducted for governmental or general purposes. The main results of the study contribute towards the performance of renewables for mining operations in South Africa. The analysis identified the current sources of diesel generators and grid-connection to Eskom in hybrid versions with either solar photovoltaic, on-shore wind or geothermal power, as the most attractive renewable options. The business model of self-generation was selected as most promising. To focus on technologies and reduce variables, the project had to be funded through of own-investment. The implementation and analysis of the multi-attribute value theory method showed that the hybrid versions with solar photovoltaic and on-shore wind always performed favourably in comparison with diesel generators or Eskom grid-connection alone. The advantage over diesel generators is significantly higher than over Eskom grid-connection. In combining the macro-economic influences with the multi-attribute value theory results of this study, hybrid solar versions are identified as having the greatest potential. Hybrid wind solutions were placed second in the evaluation, as favourable wind conditions occur only in coastal regions where there are fewer mining activities. Geothermal hybrid versions were selected as the least favourable owing to a low service infrastructure and high initial investment costs.
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Thesis (DPhil)--Stellenbosch University, 2016.
Renewable energy sources, Mines and mineral resources -- Environmental aspects, Eskom (firm), Electricity -- Costs