BUILDING A LEADING INTERNATIONAL RENEWABLE ENERGY SOLUTIONS BUSINESS BY 2030
As a business, Exxaro takes pride in its ability to provide innovative and sustainable solutions to meet the challenges that our society and our stakeholders face. So how does Exxaro’s Sustainable Growth and Impact strategy meet the challenges ahead and help us build a leading energy solutions business by 2030? Roland Tatnall, MD of Energy at Exxaro, unpacks Exxaro’s strategy to find better solutions.
Renewable energy critical to address climate change
Climate change is a global problem that is currently threatening sustainable livelihoods and has the potential to impact negatively on future generations. The root cause of climate change is that economic development has been strongly correlated with increasing fossil fuel energy consumption and associated greenhouse gas emissions. Renewable energy is considered critical for addressing climate change, environmental degradation and socio-economic issues. Technological developments and declining costs for solar and wind power technologies are also contributing to an increase in the adoption of renewable power. Globally, renewable energy is a rapidly growing component of the energy mix across all major economies. In South Africa, the Integrated Resource Plan (IRP) forecasts the contribution of renewable energy to the energy mix to increase from approximately 10% currently, to between 45% to 50% by 2030.
What is Exxaro’s Renewable Energy strategy?
Exxaro has long understood the need to balance the country’s socio-economic development in the energy sector, which has historically relied on coal generated power, with the need to support the transition towards a low-carbon economy to reduce carbon emissions and the harmful impact of climate change.
Our historic vision to become a renewable energy pioneer in South Africa was evident as far back as 2009, culminating in our investment in Cennergi, which was then a 50:50 joint venture with Tata Power. Cennergi established itself in the local renewable energy sector in 2012 and commissioned two wind projects in the Eastern Cape in 2016: Amakhala Emoyeni wind farm near Bedford (134MW) and Tsitsikamma Community wind farm (95MW). These projects contribute 229MW of renewable energy to the national grid. Furthermore, the acquisition of Tata’s 50% interest in Cennergi resulted in Exxaro assuming 100% ownership of Cennergi effectively from April 2020. From 2018, we also developed nine smaller, private solar facilities and we are looking to provide similar solutions (wind, solar and battery storage) to supply our own power requirements and those of other large power consumers in South Africa. Through Cennergi, we not only serve an expanding renewable energy market, we also strive to build real value for our people, the environment, economy and our shareholders.
Leading renewable energy solutions business by 2030
Our vision is to become a leading international renewable energy solutions business by 2030. We are one of the largest South African developers of renewable energy assets currently and aspire to become the largest renewable energy company in South Africa, with an international footprint.
We will build a renewable energy business that transitions Exxaro to a carbon neutral future, providing energy solutions (renewable assets and services) to the private and public sectors in select markets globally, leveraging Exxaro’s unique networks, skill sets and innovation.
Our innovative solutions will not only provide benefits to Exxaro’s operations in the form of self-generation and consumption of renewable energy, but to other energy customers within the mining industry in order to reduce their energy costs and carbon emissions. Self-generation projects are planned for our Grootegeluk and Belfast operations.
As Grootegeluk is our biggest operation, a significant energy consumer and the highest contributor to our carbon footprint, the solar facility, and subsequent phases including wind and battery storage, will have a big impact on the mine’s carbon emissions as well as Exxaro’s.
Building an energy business
Our strategy has been to increase investments in renewable energy over the years and so, over the past year, we’ve created the building blocks to establish an energy business of the required size to support our growth and sustainability ambitions. We assembled a dedicated leadership team and incorporated energy into Exxaro’s capital allocation framework. We are committed to powering possibilities through renewable energy opportunities as we deliver on our Sustainable Growth and Impact strategy. Through our renewable energy business, we will contribute to Exxaro’s strategic objectives of transitioning at speed and scale, being a catalyst for economic development, empowering people to create impact, make our minerals and energy businesses thrive and become carbon neutral by 2050.
Creating impact and sustainable livelihoods
Our renewable energy strategy will enable us to scale our efforts of contributing to the development of sustainable communities and converting unsustainable coping strategies in communities to long-term sustainable livelihood opportunities. Scale and influence translate to carbon footprint reduction, carbon offsetting opportunities and green job creation. Our objective is to become a significant creator of jobs in South Africa through sustained investments in renewable energy assets. We will also contribute to addressing skills shortages and the brain drain in the renewable energy sector through skills development, training and offering career opportunities, all of which are approaches currently being implemented by Cennergi and the broader Energy business. Furthermore, we will ensure the growth and development of employees and trainees, address gender diversity and transformation issues, implement effective skills retention strategies, partnerships and sector education and training and create deliberate opportunities for skills transfer.
Our Just Transition
We are in a strong position to drive growth, transformation and a Just Transition. We could greatly strengthen the adaptive capacity and resilience of vulnerable members of society by helping to reduce or eliminate resource poverty and increase access to clean energy. The impact of access for all to a clean and reliable source of energy goes much further than daily comforts; it fuels society’s hopes for education, jobs, health, clean environment, and business opportunities, which are all critical elements for ensuring a Just Transition.
Roland Tatnall, MD of Energy at Exxaro (MD: Cennergi)
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