More coal companies are moving to cleaner sources of energy to power their operations in South Africa.
This, as SA continues to battle with energy shortages, with the companies also looking to reduce their carbon emissions.
Coal producer Seriti Resources and its renewable energy subsidiary, Seriti Green, yesterday announced Seriti Green will soon begin construction in Mpumalanga on SA’s largest wind farm, with power supply coming online by 2025.
Mining company Exxaro in 2021 started developing a 70MW solar project, which supplies renewable energy to its coal operations at the Grootegeluk complex in Limpopo.
Exxaro and Seriti are the largest coal suppliers to Eskom, contributing around 80% of Eskom’s coal supply per year.
In a statement, Seriti says this follows the signing of heads of terms between Seriti Resources and Seriti Green on a power purchase agreement (PPA) for 155MW of power that will be generated by Seriti Green and wheeled through the national grid to Seriti Resources’ coal mining operations.
According to the firm, the PPA is a significant step in Seriti’s renewable energy plans, and is a realisation of its commitments made in the memorandum of understanding (MOU) signed with Eskom and Exxaro in October 2021.
Seriti Green has partnered with Standard Bank and RMB in the financing and development of this initial 155MW facility, with a capex cost of R4 billion.
The firm explains the conclusion of the PPA and meeting of all conditions necessary to commence construction (including reaching a financial close on the project) is expected to be completed by Q2 2023.
It adds the project has already received its environmental authorisation from the Department of Forestry, Fisheries and the Environment, a critical requirement to start construction.
The 155MW wind energy facility is the first phase of a larger, 900MW renewable energy cluster called Ummbila Emoyeni, located between Bethal and Morgenzon in Mpumalanga, says Seriti.
Ummbila Emoyeni is a combination of 750MW wind energy facilities and 150MW solar PV plants, it notes, adding the entire project has been designated as a strategic integrated project by the Department of Public Works and Infrastructure.
“The signing of the PPA, and the development of this first wind farm, is a major first step in the construction of Seriti Green’s larger renewable energy project ambitions, to develop the capacity for 3 000MW of renewable energy (both wind and solar) in the next decade,” the company states.
It points out the wind farm will be constructed in Mpumalanga, the country’s coal heartland, and will translate into a significant investment in the province, along with the creation of jobs, procurement opportunities and social investment expenditure.
“The agreement is the first step in Seriti Resources’ journey towards carbon-neutrality. More than that, the addition of 155MW of renewable energy into the national grid in just two years will contribute to relieving Eskom’s energy constraints,” says Mike Teke, CEO of Seriti.
He notes 155MW could power approximately 165 000 average South African households per year.
“It is fitting, we think, that this project will be developed in Mpumalanga, the home of coal mining and Seriti’s own operations. We are very mindful of the need for a just energy transition, where the needs of and responsibilities to those most immediately affected – employees, communities and beyond – are considered and planned for. This is just a first step for Seriti Green,” Teke says.
The agreement is in line with the pledge Seriti Resources made in the MOU signed with Eskom and Exxaro, which outlined Seriti’s commitments to use renewable wind and solar energy in its facilities through the signing of PPAs for the procurement of renewable energy, comments the company.
Under the MOU, it notes, Seriti aims to reduce its CO2 emissions by up to 350 000 tonnes per annum, around half of its current emissions.
Seriti Green CEO Peter Venn comments: “Climate change is a reality, and we are proud to be part of the solution to lowering carbon emissions through stable and cost-effective renewable energy through this momentous agreement.”
The company states that once constructed, the wind farm will transform over 75% of the energy consumption from Seriti’s existing coal operations into renewable energy, while helping to mitigate its scope one and two greenhouse gas emissions and bringing the company a step closer to carbon-neutrality. Scope one refers to emissions from processes at the mine site, while scope two is the indirect emissions, such as the purchase of electricity from Eskom.
Says Teke: “This agreement is a meaningful step that further cements the significance of the conclusion of renewable energy through Seriti Green into the group’s existing portfolio of high-quality coal assets to lower its carbon footprint and ensure long-term sustainability as a diversified energy producer.”
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