Mining and energy are closely linked and so energy, enough of it and the cost of it, is a source of concern for the mining industry in South Africa. Therefore, the opportunity to participate in a conversation by the industry to find solutions to the energy issue is imperative.
This is according to a panel on new developments in the world of energy. The discussion was part of a two-day conference, The Joburg Indaba, which saw stakeholders from across the industry gather to tackle the challenges facing the local industry head on. The conference was held at the Inanda Club in Sandton.
Chairing the panel was Erik Wandrag, Senior Investment Director, Energy, Harith. The panel comprised Maduna Ngobeni, Deputy Director, Department of Energy, Brian Dames, Chief Executive, African Rainbow Energy and Power (ARUP), Mike Roussow, Energy Thought Leader, and Thomas Garner, CEO, Cennergi.
The panel felt that the current energy situation had to be discussed against the background of the bigger picture that a country cannot leapfrog from a pre-industrialised state to a technology state. Research from a year ago by the Economist shows a country's economy has to go through every stage of development.
"South Africa's industrialisation process was interrupted by sanctions and never really restored and before we move to the next stage, we need to finish industrialising," says Roussow.
Electricity is a product that is based on supply and demand in real time; Dames points out that this requires a massive investment into infrastructure, systems and networks. This represents a significant cost to the consumer, however success in this sector has been characterised by the supply of secure electricity at a cheap cost. "In the future this will require balancing affordability and security, while there will be an increasing need for sustainability. This is where technology will play a significant role."
"Technology is driving the change in the energy sector and this is opening up massive opportunities, says Garner, but in South Africa this is still being resisted because of this mind-set and because of the various departments in government not being on the same page.
"We need to ensure that we are in a policy environment that creates the programmes of excellence, where private sector money comes in and efficiencies are related. Eskom is protected by policies that are not in line with where the disruptors are going and it will cease to exist because the world is changing. The quicker we change it the better. While there is opposition to the new model, the new model will happen anyway," Garner says.
Dames adds to this. "The utility model we know today will change. Eskom has to shift how it gets closer to providing solutions to customers. This transition will provide opportunities to the business and mining sector to think carefully about its role. Policy-makers must provide an environment that allows for investment and creativity to happen within a stable and predictable environment. These policies must be set today for the future.
It is important to think 10 to 20 years from now.
Globally, electricity supply has changed fundamentally and we need to catch up Roussow adds. "No-one knows what energy demand will be in the future, but the ability to predict that demand has a profound implication for investment and downstream activities. We need to know where electricity supply in South Africa is going."
Ngobeni is of the opinion that now is the perfect time for all the parties in the sector to work together to find solution. "This time of challenge has presented many opportunities for the mining sector and other parties. My view is that we need to think outside the box and come up with new initiatives."
The Joburg Indaba took place 14-15 October at the Inanda Club in Johannesburg. For more info, go to www.joburgindaba.com.