So much of the world’s growth over the past two hundred years has been due to the discovery and ever-increasing use of affordable energy derived from fossil fuels led by coal, followed by oil, and natural gas. This affordable and predominantly coal-fuelled energy drove industrial expansion, created millions of jobs, and generated wealth for a large portion of the global population.
There is a great deal of discussion led by a largely pseudo-scientific approach to global warming, which has reached almost ‘religion’ status, and the supposed dangers of carbon dioxide gas (CO2) released from fossil fuel combustion around the world, in particular from coal. In 1988, the International Panel on Climate Change (IPCC) was set up to investigate and document the dangers associated with CO2 which is released from fossil fuel combustion, such as coal. Since then, many papers and articles have been written and international meetings held to see if agreements can be made to mitigate this supposed problem for our planet – a problem not fully defined, nor even proven to any level of certainty.
In this context, coal has been set up as the general ‘public enemy’ Number One. Coal is an easy target; by its very nature it’s black, dusty and dirty; with less powerful lobby groups and influencers than other sectors, such as oil and natural gas. These sectors are often much less visible to the public eye and easier to disguise and dismiss as threat or cause.
Targets have been set to reduce CO2 emissions for the near future; and programmes are being introduced in developed countries on how to meet them. The goal? To shut down all coal burning power stations, followed by the source of the coal, the mines themselves.
Stress on Developing Continents and Countries
There are still many developing countries, the rising stars of tomorrow’s industrial world that rely on this affordable source of power generation to power their growing industries and are now being forced to comply with western politically driven often unrealistic targets. These countries, many on the African continent, are now driven allocate a significant portion of their fiscus on CO2 mitigation and reduction defined and sold by them – targeting shutting down coal use in any form, while this expenditure could be put to better use and is urgently needed to develop the countries’ infrastructure and large-scale industrial business that can improve these economies and add to job creation, improve the health system and reduce environmental pollution of the air, water and soil by noxious emissions and effluents.
Until a reliable, new and reasonably priced base-load source of energy is found, coal is required.
Quickly and drastically reducing the use of coal by a large percentage, as has been mandated by some developed economies and their governments, and the Paris Accord, creates a serious problem. It would have negative effects on the social welfare of so many people in the energy industry and related sectors and many millions more people’s lives will be threatened because funds that could be used in infrastructure and other developmental requirements are now being deployed for CO2 mitigation?
In 2016, the five biggest coal importers in the world were India, China, Japan, South Korea, and Taiwan. While the big five made up almost 70% or over 600 million tonnes of global imports, the Southeast Asia (SEA) market accounted for less than 8% or about 70 million tonnes of coal imports during the same period. However, according to data released by the IEA for the period between 2017 and 2018, the SEA market has doubled in size.
The region’s key coal users and importers include Thailand, Malaysia, Philippines, Vietnam, and Indonesia. Even though Indonesia is the biggest coal exporter, supplying over 80% of the demand for the region, its domestic coal requirements are expected to impact the Asian demand and supply balance significantly in the coming decade by increasing its own demand. While Vietnam already appeared on the map in 2016, Myanmar will also play a bigger role in the near future as coal production rapidly increases.
“Electricity is increasing its share in total energy consumption and coal is increasing its share in power generation”, said Laszlo Varro, head of the gas, coal and power markets division for the International Energy Agency (IEA). The vast majority of the 400 GW in power generation capacity to be added in SEA by 2040 will be coal-fired. That will raise coal’s share of the SEA power market to 50% from roughly 32%, while natural gas declines to 26% from approximately 44%.
About 700 million people now live in SEA and the region is expanding quickly, especially in terms of energy demand and as a result electricity generation. IEA Southeast Asia predicts that population grows modestly to 760 million people by 2040 but urbanization increases from 46% today to 60% until then. The GDP per capita will almost triple until 2040, and this is where energy demand must step in.
As a result of this soaring energy demand, environmental pressures are increasing. At the same time, the carbon foot print of SEA is only a fraction of that of Europe and the USA.
The IEA also reports similar trends and shares of total energy consumption for the African continent which, in population terms roughly approximates SEA. With these similarities in mind, the IEA predicts that 120 million people in Southeast Asia lack electricity, while over 270 million rely on wood and dung for cooking and heating, pollutants in itself. “From 2013 to 2030, the SEA region’s primary energy demand will almost double or increase by at least 80%.” The IEA notes. The “power pie” or electricity demand increases from 790TWh to 2.210TWh from 2013 to 2040.
That tripling in electricity demand will be primarily sourced from coal. Whilst renewables are expanding, their pace of growth is too slow to keep up with faster, more affordable thermal coal-fired power generation. Coal will be the fuel of choice. The material is easily available, the cheapest source of power and also the safest. All major SEA countries are constructing coal-fired power plants at a breath-taking pace. We predict that with a 40GWe energy shortage already prevalent in Southern Africa, a similar trend will emerge if the 4th Industrial Revolution (4IR) is ever to gain traction in Africa.
Coal’s share of electricity generation is expected to increase from about one third today to reach 50% by 2040. This means that the SEA will pull up the global average for coal use and significantly contribute to coal continuing to be the power source for the developing world. Again, renewables, including hydro will also grow but the staggering increased power demand cannot be met economically without the use of easily available, low-cost and safe coal.
Renewable Energy Sources
New energy technologies are being funded and developed to counter the reliance on coal and coal-fired power stations. Solar panels, geothermal wells, wind farms and tidal turbines are being installed to produce electricity. While these solutions are often portrayed as reliant green energy, geothermal and tidal turbines are only considered transient and cannot yet be used for base-load service which is driven mainly by coal; a key factor for a stable power to a city, town or industrial centre.
Solar produces no power at night and windmills only work when there is sufficient wind, while shutting down when the wind speed is too high. Thus, storage and re-distribution of extra power has become the key challenge. Only an advanced storage solution that can be applied on a global scale and is affordable, will allow for large-scale economic use of solar and wind power. Coal fuelled power is steady, still relatively cheap and runs continuously 24 hours a day. Therefore, there might not be a way around coal fuels for many decades to come.
Key Forces Affecting Climate
The question we need to ask is, are we sure that this costly and drastic move away from coal just to reduce CO2 is urgently needed? What are the key forces that affect the Earth’s climate? Do higher CO2 levels not benefit plant growth and therefore are beneficial to our environment?
To answer this question, let us have a look at the Earth’s climate history over the past 400,000 years and the role of CO2. This contrasts with the typical 150-year time span depicted in global media and which is a major misdirect to garner public support.
The Fallacies of a Carbon Tax
To more rapidly reduce the use of fossil fuels, coal in particular; a $40/ton carbon tax was proposed and given serious consideration in Washington and similarly in other developed nations. This would affect mainly the use of coal and natural gas, oil, which make up 80% of the energy used in those countries. Based on the data available, this could be a big mistake which would force energy companies to close down otherwise productive coal fired power plants too early and increase the cost of power beyond what is economically viable.
Carbon Capture and Storage (CCS) has also been proposed to remove CO2 from coal power plant exhaust, transport it by pipeline and inject and store it in state approved deep underground sites. It is estimated that CCS could double the base cost of electricity production from coal and other fossil fuels. This would be highly prohibitive, and the costs were to fall first on the public who depend on stable energy sources and as explained above, it serves no useful purpose for controlling climate change.
NB: Another key point about CO2 is that all plant life thrives in high CO2 environments and farmers routinely pump CO2 into greenhouses to 1.500 ppm CO2, which greatly increases growth rate. It is the key nutrient for all plant life and when it drops below 150 ppm, very few plants and animals can survive. Plants also handle drought conditions better as CO2 rises as they expire less water in the process of absorbing CO2, their principal food source.
If CO2 in the air were to double, their water needs would drop by 50%. This will be an enormous boon for agriculture everywhere especially in arid regions around the world and would support feeding our growing population. The CO2 content in the air in our homes is also much higher than outside and is safe to breathe. CO2 is not a pollutant but a vital basic building block of all life on Earth, on land and in the oceans.
Reviewing the available data makes clear that no significant global warming from re-radiated solar energy can be created by an increase in CO2 above current levels for which coal gets most of the blame. CO2 is beneficial for our environment and is not a pollutant. It benefits plant life by increasing biomass and thus improves the basis for all human life on Earth. So, producing and burning coal using state of the art technology can still be a sustainable development solution.
The present warm period has lasted over 8000 years longer than any of the three prior ones, giving the oceans a much longer time to warm up and release more CO2 into the atmosphere, which would also contribute to the current level of 400 ppm. This means that coal does not carry all the blame as is stated by socio-environmentalist groups and politicians.
According to IEA Climatologists and Oceanographers tripling the present value of CO2 to 1.200 ppm will not result in ocean acidification, as has been proposed by the socio-environmental political movement (most notably Al Gore), and the pH would be about 7,8 which is still a satisfactory alkaline level in which ocean life can flourish – as it did over most of geological history when CO2 levels were several times higher than those today and when no coal was being mined or burned.
Proposed Future Energy Development Plan
Of course, coal and fossil fuel sources have a limited useful time span and technological advancement will ensure that we will no longer rely on coal, possibly latest by 2200, 180 years away. We need to develop a well-planned economic, environmental and social introduction of viable and affordable new energy sources. We need to gradually change our social infrastructures and improve the lives of people and futures of whole towns, cities and regions in every country around the world. And the reason for this is not the CO2 that coal used as a fuel emits, but because there will be more efficient and fewer polluting ways of producing energy developed in the next two centuries.
It is recognised that there are real issues related to coal and other fossil fuels that need to be addressed such as groundwater contamination and smog from release of smoke particles, and corrosive gases containing sulphur, as well as safer storage of fly ash from coal combustion. That’s where our resources should be spent, and our ingenuity used to improve existing conditions.
The billions of dollars to be spent or better wasted on CO2 mitigation could – if employed elsewhere – truly make a difference to provide cheap clean coal technology driven energy sources of base load magnitude and thus improve the health of our planet and our populations economic development.
Alan M. Clegg Pr.Eng Pr.CPM PMP FSAIMM FIOQ F.Inst.D
Jwaneng Mine— by far the world’s richest diamond mine is not about stop any time soon — plans are underway to ensure more gem stones are birthed from the Prince of mines.
Owners and operators of the mine, Debswana, a 50-50 De Beers- Botswana Government joint venture intends to spend over P65 billion to breathe life into the mine beyond the current Cut 9 project. Cut 9, which is currently transitioning from outsourced contractor to in-house operation, will take Jwaneng to 2036.
Debswana, by far one of world’s leading rough diamond producer revealed in a media briefing on Friday morning that an ambitious project to transition Jwaneng from open pit mining to underground is on the cards.
The company top brass noted that studies are underway to guide this massive project. These entail desktop studies of available geoscience information, hydrogeological surveys to appreciate the underground stratigraphy, water table levels, geotechnical composition and of course kimberlites geology.
Lynette Armstrong, Debswana Acting Managing Director said the company will invest all the necessary resources required for prefeasibility studies to determine the best model for undertaking the multibillion Pula Project. “This is a complex project that will require high capital investment over a period of years, advanced skills and cutting edge technological advancements,” she said.
Armstrong stated that underground mining projects have been undertaken and successful delivered before. “It will not be a completely new thing, we will benchmark from other operations and learn how they have done it, we have a database of former BCL employees who worked for that underground mine , we will source skills locally, where there are no required skills in country we will source from outside,” Armstrong indicated.
The Acting MD further explained that the company is getting ready for the highly anticipated mega project in different key aspects required for the successful implementation. “We have seconded some of our employees and top talents to benchmark in our sister operations within De Beers Group, to prepare and ready our workforce mind-sets and also acquire the necessary skills,” she said. In terms of funding, Lynnette Armstrong revealed that Debswana would look into available options to fully resource the project.
“We have been discussing and exploring other available avenues that we could use to fund our life expansion projects, debt financing is one of them, it will obviously have to go through all our governance structures, internally and all the way to the board for approval,” she said.
Debswana Head of Projects revealed that an estimated cost of P65 billion would be required for the entire project from feasibility studies, engineering and scope development, construction, to drilling, sinking of shafts and all the way to transitioning, extracting the ore and feeding the processing plants. Meanwhile the process of transitioning Jwaneng Cut 9 project from Majwe Mining contract to an in-house hybrid model is underway.
The General Manager of Jwaneng Mine, Koolatotse Koolatotse, revealed that Debswana would not necessarily absorb all employees of the former CUT 9 contractor Majwe Mining. Speaking at the same virtual media briefing, Koolatotse said: “Debswana did not commit to absorbing Majwe Mining employees”
Majwe was in 2019 awarded the multi billon Pula contract to deliver the Jwaneng Cut 9 project, a significant investment by Debswana that intends to extend the life of Jwaneng Mine. The contract was however terminated due to “internal reasons.”
“Our contract with Majwe allowed for such termination , where one party on reasons best known to them could walk away from the contract without necessarily stating to the other party why it’s necessary to terminate.” Koolatotse further explained that Debswana has no obligation to re-hire Majwe Mining employees.
“In recruiting new skills for our new hybrid model we are publicly floating requests for expression of interest , that is to say anyone who has the skills we require for our new in-house model is welcome, it will not be based on whether you worked for Majwe or not,” he said.
Top development funding institutions amongst them World Bank investment arms have jumped into the much anticipated Botswana-Namibia Mega Solar Project. The multibillion dollar massive project was confirmed by authorities of the two countries late August last year.
The Southern African sovereigns, both of which enjoy massive natural solar exposure, have partnered with Power Africa- a United States government entity to deliver what will be one of the world’s largest solar power plants. The project will see installations built across both countries and the power produced will be exported to the Southern African region.
This week, information emerged that The African Development Bank, The International Finance Corporation and The International Bank for Reconstruction and Development have signed a Memorandum of Intent to open talks for financing the project.
The International Bank for Reconstruction and Development, and The International Finance Corporation are World Bank private Investment agencies that seek to support private sector growth across developing economies of its member States. According to sources, the Memorandum of Intent would support the pre-feasibility and related studies required to advance the project.
Botswana authorities revealed recently that the capital raising campaign involving the three mentioned financing organisations would help fund the studies and could be involved in supporting the actual project’s development. It is anticipated, based on previous experience on similar projects, that the feasibility study could cost up to P20 million.
Plans for the 5 GW solar energy capacity to be developed over the next 2 decades for both the African nations, Namibia and Botswana, were first formulated and shared by the World Economic Forum’s (WEF) Global Future Council on Energy and the US led Power Africa initiative, in August 2019.
There will be a multi-phased solar procurement program to help these countries get access to secure, reliable, inexpensive solar power at scale. Under phase 1, the idea would be to procure 300 MW to 500 MW capacity to cover future domestic demand only, phase 2 will see 500 MW to 1 GW capacity to be procured to cover regional demand within the South African Power Pool (SAPP) or through bilateral agreements.
Under phase 3, between 1 GW to 3 GW capacity will be procured to meet demand in SAPP and Eastern Africa Power Pool (EAPP), as per the plans shared last year. All this capacity will be developed through a competitive procurement process.
Botswana and Namibia were specifically chosen for this mega solar project because of their solar irradiation potential, large open spaces and low population density, strong legal and regulatory environment, and low-cost, efficient and smart power-trading potential to meet high regional demand.
“Southern Africa may have as much as 24,000 MW of unmet demand for power by 2040. The market for electricity produced by the mega-solar projects in Botswana and Namibia includes 12 other countries in the region that could be connected via new and/or upgraded transmission infrastructure. As battery storage technology advances and costs of solar storage drop below $0.10 per kilowatt hour, solar power becomes an even more cost-competitive solution,” the World Economic Forum said in 2019.
While the 5 GW capacity will help both the nations diversify their energy mix, it will also help bring down their dependence on South African national electricity utility, Eskom, which has problems of its own in financial and operational terms. Namibia and Botswana will be able to save their resources spent otherwise spent on energy import.
According to the Global Market Outlook for Solar Power 2020-2024 of Solar Power Europe (SPE), Namibia was among the few countries in Sub-Saharan Africa to have installed over 100 MW on-grid PV in 2019, with 130 MW added. The 5 GW project with Botswana, if realized, will help the country in its renewable energy target of 70% for its energy mix to be achieved by 2030.
Botswana and Namibia offer the potential to capture around 10 hours of strong sunlight per day for 300 days per year and have some of the highest solar irradiance potential of any country in Africa, which translates to highly productive concentrated solar power (CSP) and photovoltaic (PV) installations.
Both countries have sizeable areas of flat, uninhabited land not currently used for productive economic activity, which is conducive to building land-intensive solar PV and CSP installations. According to World Economic Forum (WEF) key investment challenge for power projects across sub-Saharan Africa is limited availability of foreign currency to permit repatriation of proceeds.
“Given the active diamond and mining industries in both countries, there should be sufficient foreign exchange available to facilitate outside investment,” a WEF report said in 2019. Botswana and Namibia are also working on conceptualisation of the ambitious ocean water distillation project to supply both counties with drinking water.
“We are happy with the prospects presented by this project, because we need water. However, our ministers and technocrats need to determine what is best for us keeping in mind our governance procedures,’’ aid President Masisi Masisi in one of his working visits to Namibia early this year.
An International Monetary Fund (IMF) report on the Regional Economic Outlook on Sub-Saharan Africa has revealed that the region will be the world’s slowest growing region in 2021, and risks falling further behind as the global economy rebounds.
Speaking at a virtual press briefing on the Regional Economic Outlook recently, Abebe Aemro Selassie, Director of the African Department of the IMF, highlighted that although the outlook of the Sub-Saharan Africa region has improved since October 2020, the -1.9% contraction in 2020 remains the worst performance on record.
Even during these unprecedented times of the pandemic, the IMF report reflects that the region will recover some ground this year and is projected to grow by 3.4 percent. On the other hand, per capita output is not expected to return to 2019 levels until after 2022.
“This economic hardship has caused significant social dislocation. In many countries, per capita incomes will not return to pre-pandemic levels until 2025. The number of people living in extreme poverty in sub-Saharan Africa is projected to have increased by more than 32 million. There has also been a tremendous ‘learning loss’ for young people. Students in the region have missed 67 days of instruction, more than four times the days missed by children in advanced economies,” said Selassie.
This is feared to risk reversing years of progress, and the region falling behind the rest of the world. The IMF report focusing on navigating a long pandemic has shown that financial stability indicators have displayed little change. But the longer the pandemic lingers, the more borrowers may find themselves compromised, with potentially significant implications for nonperforming loans (NPLs), bank solvency, and the triggering of public guarantees.
So far, financial soundness indicators do not point to any major deterioration in the financial system’s health, thanks, in part, to the exceptional policy support provided by local authorities. Botswana’s supervisory authorities, according to the report, have allowed their banks to use their countercyclical capital buffers to help deal with the crisis, however, the full impact of the crisis is still to be felt with Regulatory Forbearance scheduled to end in 2021.
This has perhaps prevented a number of non-viable loans from being captured properly in existing financial soundness indicators, the report indicated. The outlook for sub-Saharan Africa is expected to diverge from the rest of the world, with constraints on policy space and vaccine rollout holding back the near-term recovery. While advanced economies have deployed extraordinary policy support that is now driving their recoveries, for most countries in sub-Saharan Africa this is not an option.
“As we have observed throughout the pandemic, the outlook is subject to greater-than-usual uncertainty. The main risk is that the region could face repeated COVID-19 episodes before vaccines become widely available. But there are a range of other factors—limited access to the external financing, political instability, domestic security, or climate events—that could jeopardize the recovery. More positively, faster‑than‑expected vaccine supply or rollout could boost the region’s near-term prospects,” the report stated.
The IMF has called out Sub-Saharan nations to focus on policies and the priorities for nurturing recovery; such as saving lives that will require more spending to strengthen local health systems and containment efforts, as well as to cover vaccine procurement and distribution.
Selassie underscored that: “the next priority is to reinforce the recovery and unlock Sub-Saharan Africa’s growth potential. Bold and transformative reforms are therefore more urgent than ever. These include reforms to strengthen social protection systems, promote digitalization, improve transparency and governance, and mitigate climate change.”
Delivering on these reforms, while overcoming the scarring from the crisis will require difficult policy choices, according to Selassie. Countries will have to tighten their fiscal stance to address debt vulnerabilities and restore the health of public balance sheets—especially so for the seventeen countries in the region that are in debt distress or at high risk of it.
By pursuing actions to mobilize domestic revenue, prioritize essential spending, and more effectively manage public debt, policymakers can create the fiscal space needed to invest in the recovery. ‘‘The sub-Saharan region cannot do this alone; there is a crucial need for further support from the international community,’’ Selassie said.
Along with the international community, the IMF moved swiftly to help cover some of the region’s emergency funding requirements. This included support via emergency financing facilities, increased access under existing arrangements, and debt relief for the most vulnerable countries through the Catastrophe Containment and Relief Trust (CCRT).
“To boost spending on the pandemic response, to maintain adequate reserves, and to accelerate the recovery to where the income gap with the rest of the world is closing rather than getting wider. To do this, countries in sub-Saharan Africa will need additional external funding of around $425 billion over the next 5 years.
However, meeting the region’s total needs will require significant contributions from all potential sources: private capital inflows; international financial institutions; debt-neutral support via (Official Development Assistance) ODA; debt relief; and capacity development to help countries effectively scale up development spending,” said Selassie. All these issues are expected to be discussed at the forthcoming High-Level International Summit on Financing for Africa in May.