Written by Frost & Sullivan Mining Industry Analyst, Wonder Nyanjowa
South Africa's energy intensive economy is overwhelmingly dependent on coal. This fossil fuel provides about 80% of the country's primary energy needs, supports 90% of the electricity generation and provides feedstock for the country's synthetic fuels manufacturing plants. Coal is also used directly as a fuel in the steel, cement and brick manufacturing industries, writes Wonder Nyanjowa, Mining Industry Analyst at Frost & Sullivan, an international growth consulting and partnership company. South Africa's coal reserves are large and provide an inexpensive source of energy. The limited availability of alternative energy sources, and the apparent indecision regarding nuclear energy, point towards coal's continued domination of the country's energy mix going forward
The widespread power shortages that South Africa has been experiencing, since 2008, highlight the risks that are inherent in this heavy dependence on coal. South Africa does not only need to upgrade power generation and transmission infrastructure, but also ensure adequate supplies of coal to the power generating plants. The country's coal reserves are finite and they will run out at some point in future. The anticipated decline in South Africa's coal production will bring to an end the era of cheap electricity that the country has enjoyed for decades. The dilemma that the South African government has been facing, in recent years, is determining how long the existing coal reserves will be able to sustain current and future coal consumption.