There is much scepticism domestically and internationally about the potential for clean-coal technology (CCT). In South Africa, however, there has been an amplification in recent months of calls for accelerated efforts to be made to finding innovative solutions to the serious environmental and health damage being caused by the burning of coal.
Mineral Resources and Energy Minister Gwede Mantashe has emerged as a leading campaigner for CCT, arguing that it would be unwise for South Africa to abandon its coal endowment.
The call is arguably natural, in light of the centrality of coal in South Africa’s energy sector, with both its electricity and liquid fuels industries highly dependent on the mineral. Nevertheless, it is also controversial, as coal and CCT face both environmental opposition and commercial pressures that some commentators view as insurmountable.
Several diversified mining majors have already announced coal-exit plans, while others have indicated that they will cap the amount of coal they produce in future. Coal-fired power station equipment suppliers are also retreating from the technology, while a rising number of commercial and development banks are turning their backs on the energy mineral.
The commercial case for coal, meanwhile, is progressively weakening, largely as a result of the steep fall in the cost of producing electricity from solar and wind. The commercial case for coal is expected to deteriorate further as countries introduce carbon taxes and demand that coal-fired power stations add new pollution-control systems. Those costs will increase even further should carbon capture and storage (CCS) be introduced.
In addition, several countries with high variable renewable-energy penetration levels are increasingly finding commercially viable ways for sustaining system stability in the absence of so-called baseload generators, such as coal and nuclear plant.
Nevertheless, the International Energy Agency Clean Coal Centre (IEACCC) – a technology collaboration programme organised under the auspices of the International Energy Agency – argues that coal-based power will remain a large part of South Africa’s electricity mix for decades and coal’s role could be sustained if solutions are found to mining, transporting and combusting coal more cleanly.
The centre even suggests that technological advances, if adopted by the larger coal sector, could play “a potentially huge role” in reducing the carbon footprint of coal mines.
Additionally, the broader deployment of electric mining equipment will help the sector as it lays down the tracks towards decarbonisation.
“The coal mining sector would benefit from being associated with collaborations in CCT development. Its public image could be improved by its funding of CCTs,” says IEACCC studies manager Debo Adams, adding that this would also help in maintaining coal’s long-term market.
Law firm Webber Wentzel partner Jonathan Veeran adds that coal is a commodity that is “not in favour”, making the sector’s support for these advancements “a crucial way forward”.
This is pivotal, as Mantashe has frequently called on coal mining companies to invest in CCTs – most notably at the opening of integrated energy and chemicals company Sasol’s Impumelelo colliery, in Mpumalanga, in 2019.
The Minister argues that investment in CCTs is key to mitigating the effects of climate change, as coal continues to form a key part of the energy mix, in line with South Africa’s Integrated Resource Plan 2019 (IRP 2019).
Further, the basic tenets of the IRP 2019 state that the objectives of the plan are to balance cost, water use, emissions reduction and security of energy supply, highlights Professor Emeritus Rosemary Falcon, the immediate past chairperson of the South African Research Chairs Initiative CCT Group, at the University of the Witwatersrand (Wits CCT Research Group), and Fossil Fuel Foundation director.
The IRP goes on to say: “South Africa should not sterilise the development of its coal resources for the purposes of power generation; instead, all new power projects must be based on high efficiency, low-emission technologies and other CCTs.”
Mantashe’s call for companies to “step up the pace” in adopting CCTs was reiterated by Department of Mineral Resources and Energy director-general Thabo Mokoena in January, when he told delegates attending the Southern African Coal Conference that investments had to be made to help the country meet its climate adaptation goals.
He stressed that a just transition and fair energy mix were essential, particularly considering the coal sector’s vast contribution to the economy.
The Wits CCT Research Group also emphasises coal’s significance to South Africa, and explains that coal can be used cleanly, with minimal to no emissions through the adoption of suitable CCTs.
“However, very few, if any, CCTs that are proven, [commercially viable] and thriving internationally, are currently in operation in South Africa,” the group points out.
Engineering News & Mining Weekly reported in 2019 that State-owned power utility Eskom’s Kusile power station’s use of the wet flue gas desulphurisation (WFGD) technology – which is essential in the removal of sulphur dioxide and particulate matter emissions from the coal process – ensures that Kusile’s emissions are lower than the limits stipulated by the current environmental regulations.
Kusile is expected to become one of the world’s largest coal-fired power stations on completion, and its WFGD plant is a first for Africa.
“During the first performance test in 2018, we exceeded performance expectations by achieving a 93% removal efficiency rate for sulphur dioxide,” multinational conglomerate General Electric Steam Power executive project director Nthabiseng Kubheka stated.
Wits CCT Research Group senior research fellow and interim research leader Dr Samson Bada stresses that the technologies used should match the qualities of coal used, and it is imperative that engineers are trained in the efficient use of these technologies.
“If the correct CCTs are selected, they will ensure the continued use of coal during the just transition,” he adds.
IEACCC senior analyst Paul Baruya warns that, taking the country’s reliance on coal into consideration, it is important that Eskom reduces its carbon footprint without adversely jeopardising its operations, or the larger coal sector.
“Other measures that can be implemented include the adoption of high-efficiency, low-emissions plants – an important step towards very low emissions from coal power – coupled with CSS, when this is available. Both are more likely to sustain the coal sector in the long term, rather than jeopardise it,” he says.
Baruya asserts that there can be increased use of renewables in South Africa’s energy mix, particularly solar power. However, as this does not supply reliable baseload power, coal will still be needed – preferably using CCTs – even only as support measures.
Adams points out that, over the long term, CCS will be more appropriate for younger, more efficient plants where storage is an option.
“Carbon capture is a proven and potentially economic solution to decarbonise all fossil fuel, and biomass, power generation plants. The carbon footprint can be improved along the length of the coal supply chain, from mining to conversion, transmission and distribution,” she explains.
Consequently, Bada suggests that test facilities for all relevant CCTs on the market should be installed in South Africa to ensure that new technologies are compatible with the qualities of the coals being mined locally.
“This is important, as coals vary in quality from seam to seam, and coalfield to coalfield. Therefore, the plant equipment has to be specifically designed,” he maintains.
Although there is a movement away from thermal coal – used for electricity generation – coal mining company Seriti Resources says coal is a “significant” natural asset locally.
“Coal-fired power will continue to underpin fundamental economic growth for the foreseeable future. Thermal coal, in particular, remains a necessity to the socioeconomic development of the Southern African Development Community (SADC),” Seriti CEO Mike Teke says.
The company is poised to become the second-largest supplier to Eskom – subject to regulatory approval – after JSE-listed diversified miner Exxaro.
Teke tells Engineering News & Mining Weekly that Seriti recognises the need to introduce energy alternatives with respect to climate change. As such, the company supports the shift towards renewables as proposed in the IRP 2019.
Notably, given that South Africa faces “a massive infrastructure deficit”, there are difficulties in terms of effectively facilitating trade.
“This is a long-standing issue directly impacting on the development of new coal projects,” says integrated resources business Lurco Group CEO Ellington Nxumalo.
He says that, while there are many benefits to preservation and environmental sustainability, “industry needs to be strategic to avoid negatively impacting market dynamics in strategic industrial sectors, because these significantly impact on domestic coal demand”.
Although it is “unfortunate” that the country is in this “unpredictable” position, Nxumalo says: “With continued investment into coal projects and the diversification of our energy mix, our country should grow sustainably.”
Moreover, mining investment firm Menar, which is investing R7-billion in new projects in South Africa in the next two years, believes that the local coal market will be influenced by – among other factors – divestment by majors, owing to shareholder activism, as well as other considerations.
These considerations, according to Menar MD Vuslat Bayoğlu, include the decline in coal investment funding and the expected efficiency improvement in Eskom’s procurement, as well as possible mergers.
He warns that the extent to which global efforts are able to deal with the outbreak of the coronavirus, or Covid-19, is another key factor in the short term.
Bayoğlu told Engineering News & Mining Weekly earlier this month that metallurgical coal was not being consumed at the rate it was before the virus spread. This would likely cause drastic price falls.
XMP Consulting senior coal analyst Xavier Prevost notes that, owing to the current coronavirus pandemic, export prices will decrease because of slowing demand from the global community, especially in China.
Local prices, however, will increase with time, owing to coal demand being greater than supply, he says, also noting that the industry is poised to grow over time.
“However, industry should be aware of the urgent need to supply more coal to Eskom, while keeping in mind that the once-brilliant export prices will dwindle, with international markets becoming less interested in South African coal,” Prevost tells Engineering News & Mining Weekly.
He underscores the need to find sources of capital, especially for new projects, as well as correct Eskom’s procurement practices, which may boost coal prices.
“South Africa has an advantage, with estimated coal reserves of about 66-billion tons. Therefore, coal will remain a relevant source of affordable energy generation for the next 30 years,” Nxumalo enthuses.
Although coal also plays an essential role in the broader SADC region, Lurco does not expect coal prices to drastically increase in the near term.
Meanwhile, Bayoğlu stresses that China will continue to require supplementary supplies of thermal coal, as it constitutes 60% of the country’s energy source.
“We think Asian countries, such as India, Pakistan and Bangladesh, will continue to import coal. These are growing economies that need power.”
Moreover, as coal is a valuable source of the element carbon for the multitude of products that it provides, Falcon affirms that its current and emerging uses will continue to offer much value for the commodity.
“Coal is a plentiful resource that has potential, even if it is used less as a fuel in the longer term. Its alternative [uses] range from bulk soil improvers to novel small-scale applications in high technologies,” IEACCC associate Dr Ian Reid states.
For instance, the largest alternative use by volume is the coal-to-chemicals industry, the fourth-largest consumer of coal, after the power, steel and cement sectors, he adds.
“The coal tar industry is global and converts the by-products of coal coking into a host of common chemicals, pharmaceuticals, dyes and preservatives. “The demand for these products is increasing, but the feedstock supply is shrinking, owing to contraction of blast steel manufacture,” says Reid.
Falcon believes that there is nothing that can replace the role of coal in many of its functions.
“With coal earning the highest foreign exchange of all mineral and mining commodities”, and with the emergence of many new carbon-based products from coal and its emissions, she says, the energy mineral should rather be recognised as one of the “most valuable of all chemical commodities in the country”.