New MoU to support a just energy transition in South Africa

energy transition
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A Memorandum of Understanding (MoU) signed between state utility Eskom and mining companies is expected to help deliver a just energy transition as the country seeks to move away from coal to renewable energy.

Eskom signed the MoU with Exxaro and Seriti Resources to collaborate on renewable energy projects development to accelerate the energy transition by reducing carbon emissions at their sites. The companies want to ensure they create employment and re-skilling opportunities for their staff that are already in the coal mining and conventional energy sectors.

The two companies produce 80% of the coal consumed by Eskom every year.

Making use of onsite renewable energy projects at mining sites will enable Exxaro and Seriti Resources to reduce energy costs and carbon emissions. The renewables projects will be deployed at Eskom-tied operations or mining sites.

The MoU is in line with Eskom’s mandate to provide electricity in an efficient and sustainable manner, which includes decarbonising its supply chain. The move follows Eskom being ranked as the world’s number one emitter of sulfur dioxide ahead of China, Europe, India and the US, due to the company’s heavy reliance on coal.

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Seriti Resources says the projects may help the company to reduce its greenhouse gas emissions by 350,000 tonnes per annum, which is around 50% of the company’s current emissions incurred from consuming electricity generated using coal.

The project will reduce Exxaro’s emissions by 130,000 tonnes per annum at its Matla coal mine.

Some behind the meter off and on-grid solar PV plants will be deployed under the first phase of the project. Further projects may include energy storage and wind energy facilities.

Andre de Ruyter, CEO of Eskom said: “Eskom continues to explore means to lower the cost of coal supplied to its power stations, and this investment allows it to take advantage of the low cost of photovoltaic power. This is one of the many initiatives Eskom has embarked on to achieve a NetZero status by 2050.” 

Mxolisi Mgojo, CEO of Exxaro, added: “This is a significant landmark development in South Africa’s energy transition to a low carbon economy for three of South Africa’s largest players in the mining and energy sectors. The investment in decarbonising our mining operations is a systematic and responsible approach to the energy transition without introducing risk to the country’s electricity generation. The collaboration amongst Exxaro, Seriti and Eskom is exemplary of the possibilities achievable through co-operative and constructive relations between business and government in securing livelihoods and a future for South Africa.”

Mike Teke, CEO of Seriti, reiterated: “We recognise that climate change and the need to decarbonise our economies is a significant challenge and imperative for South Africa. But, at the same time, we are very conscious that this needs to be done in such a way that does not destroy our industrial base, or the lives of South Africans that rely on our companies for jobs, enterprise and support: this is the very basis of a just transition.”

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