A cost-benefit analysis of implementing a solar plant in a platinum mining company

Abstract

It stands to reason that a reliable and secure supply of energy is a prerequisite for adequate output and economic growth. The national power utility of South Africa, Eskom, has recently come under fire as exponential tariff increases place organisations under pressure coupled with inadequate power supply leading to power cuts more commonly known as load shedding. The before mentioned factors have sparked the interest of organisations which are heavily dependent on a constant, reliant and cost-effective supply of electricity to explore other avenues of obtaining electricity. This study was specifically aimed at confirming if the theoretical findings with regards to solar photo voltaic plants can be practically simulated to prove that solar photo voltaic technology can be implemented on a large scale. The empirical study and practical simulation focussed on a large-scale solar photo voltaic plant of 54 MW. The plant can supply a mining company with electricity which is competitive when compared to obtaining electricity from conventional methods. The study also incorporated the benefits acquired by mitigating the imminent costs of the carbon tax act which came into effect on 1 June 2019. This study established that 2,439,753 MWh is on offer over a 20-year period by implementing a 54 MW solar photo voltaic plant. The carbon tax saving equates to R563,205,994 and a R5,614,426,335 saving in electricity costs if the proposed solar photo voltaic plant is implemented. Thus, the mining organisation will have an 11% saving on carbon taxes and a 10% saving on electricity costs respectively throughout the 20-year period if the proposed 54 MW solar plant is commissioned to supply the mining organisation with electricity.