JOHANNESBURG (miningweekly.com) – In the next ten years, renewable energy market growth indications point to 30 GW of clean power capacity coming into play.

That is the calculation of Leon Groenewald, the MD of Exxaro Energy, the renewables division within the Johannesburg Stock Exchange-listed Exxaro Resources, which hosts Cennergi, a business that develops, finances, builds, owns, and operates bespoke and holistic projects that lower the cost of electricity through renewables partnerships and reduce carbon emissions.

Cennergi’s stated mission is to build on its existing renewable assets and competencies in South Africa, while providing renewable-energy solutions to the private and public sectors locally, and in select global markets.

The operating wind assets of this business last year lifted revenue by more than R1.4-billion through the generation of 725 GWh of electricity, at an earnings margin of 80%.

Against that background, this question was asked during last week’s Exxaro media conference, which followed Exxaro reporting a higher 2024 net cash position of R16.3-billion, up from 2023’s R14.8-billion.

Mining Weekly: Do you foresee significant growth in your renewables business?

Groenewald: The answer is yes. Indications of the market growth over the next ten years for renewables is, let's call it, circa 30 GW, so we certainly think this is a market to target. Wind, if you can get it, is preferable, but if you look at the energy mix that is forecast, probably 60% to 70% is going to be solar. What we think will happen with solar is that, as the price of battery storage decreases, the combination of solar and battery storage will be able to compete with wind and also in terms of the time of use. So, we’re certainly bullish about the wind and solar part of the equation, and we see battery storage as a rising star in the next couple of years. We already see it in Eskom. If you look at the tenders that Eskom issued and awarded, certainly in Bid Window 2, there’s a significant reduction in tariffs already, so we’ve started to see the benefits of the combination of solar and battery storage developing.

BATTERY STORAGE

Battery storage, or battery energy storage systems (BESS), are devices that enable energy from solar and wind renewables to be stored and then released when the power is needed most.

BESS, which is said to seamlessly integrate with renewable energy sources, optimising their utilisation, minimising waste, and bolstering grid reliability, swiftly addresses grid challenges like under voltages, overloads, and reactive power deficits by injecting or absorbing power.

MINING TICKING THE BOX

Last year, group renewables capacity was increased to more than 437 MW by entering into a partnership with G7 Energies at Karreebosch Wind Farm, in the Western Cape, to provide platinum group metals (PGM) company Northam Platinum with 140 MW to power to its PGM mines for 20 years.

Moreover, the 68 MW Lephalale solar project at Exxaro’s own Grootegeluk coal mine is on track to cut Scope 2 emissions by 161 000 t/y from mid-2025 and group wind asset project financing is expected to be settled by 2031.

Mining Weekly: In view of you doing a great deal with mining company Northam Platinum, are you going to focus more on mines in growing your renewables business? Is mining a good business area?

Groenewald: In terms of offtake, mines are generally larger offtakers, so certainly that ticks the box. From a counter-party credit risk, Northam is a very credible offtaker. But large industrials certainly come into play, and you'll see some of our colleagues in industry, particularly Noa Capital, which is backed by AIIM, doing the trader market. We also see that market as a precursor to the wholesale market that is developed, and therefore you can introduce offtakers with different profiles at different prices to the market. So, we’re looking with interest at that market as well. We think it's a very interesting space and the fact that we've had the first project-financed deal secured in that tough market bodes well.

SOUTH AFRICA-EU SUMMIT

Renewable-energy transactions are taking place with increasing frequency in South Africa amid European Commission President Ursula von der Leyen last week speaking specifically in Cape Town of clean energy and green hydrogen forming the main part of the R94-billion (€4.7-billion) EU investments package at the South Africa-EU Summit.

Remarkably, Von der Leyen also made strong reference to South Africa’s world-leading PGMs position and drew attention to the link between renewables, PGMs and green hydrogen with this comment: “You have clean energy in abundance, from wind to sun. You have raw materials that are critical for electrolysers, including 91% of the world’s PGM reserves, and you have a rising industry to produce clean hydrogen and strong export ambitions.”

Von der Leyen, who made these observations while being hosted by South African President Cyril Ramaphosa, went further by noting that, with the African continent’s clean energy journey picking up speed, she would, with Ramaphosa, be happy to co-host the EU’s Scaling up Renewables in Africa campaign. “Together, we’ll help bring clean, affordable power to Africa," she added.

Mining Weekly can report that the bulk of the €4.7-billion Global Gateway investment package – €4.4-billion, in fact – will be invested in projects supporting South Africa’s energy transition and represents a significant pledge in the context of the Scaling up Renewables in Africa campaign, launched by Von der Leyen and Ramaphosa on the margins of the G20 Summit in Rio last year.

Partnering with international advocacy organisation Global Citizen and being backed by the International Energy Agency, Global Gateway will culminate with a major pledging event at the upcoming G20 Summit in Johannesburg in November.

The Global Gateway package also focuses on connectivity infrastructure – both physical and digital – and on uplifting the local pharmaceutical industry. The Global Gateway Initiative is a strategy by the EU to invest in infrastructure projects worldwide.