Africa’s largest steel producer, ArcelorMittal South Africa (Amsa), is in the process of developing two 100 megawatt (MW) renewable energy plants: one in Gauteng and the other in the Western Cape.
Contingent on outcomes of its feasibility study, set to conclude during 2023/24, the company expects to benefit from the plants in 2025.
In a statement released last Wednesday (April 13), the group indicated that the initiative will assist the company in achieving its carbon intensity reduction targets. “Lowering ArcelorMittal South Africa’s carbon intensity will include ramping up the use of renewable energy,” the statement reads.
‘Large’ contributor to greenhouse gas emissions
In its latest environmental, social and governance (ESG) report, Amsa acknowledges that it is “a large consumer of energy, water and raw materials, and a large emitter of greenhouse gases”.
“In 2022 we will spend in excess of R400m mitigating our negative current and historical environmental impacts,” it says.
The steel producer anticipates that the alternative energy source will heighten energy security, furthering the company’s business performance – which has been affected by unstable electricity supply from the national grid.
Western Cape MEC of finance and economic opportunities David Maynier has welcomed Amsa’s announcement, saying it will improve the economy and job creation in Saldanha Bay.
“We are working to enable municipalities and the private sector to take advantage of the new energy regulations, through our Municipal Energy Resilience [MER] initiative,” says Maynier.
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This follows President Cyril Ramaphosa’s amendment of Schedule 2 of the Electricity Regulation Act which, among others, exempts energy generation projects of up to 100MW from the national energy regulator’s licensing requirements.
Municipalities now have the discretion to approve grid connection applications in their networks, based on an assessment of the impact on their grid.
This is expected to reduce Eskom’s capacity burdens, allowing for intensive maintenance to proceed on strained power stations.
Amsa envisages that its current decarbonation trajectory will transform the way it produces iron and steel in the future; it hopes to achieve net-zero carbon emissions by 2050.
The steel producer will be publishing its decarbonisation roadmap in the third quarter of this year. Nondumiso Lehutso is a Moneyweb intern
- This article originally appeared on Moneyweb and has been republished with permission.