The Growing Role of Renewable Energy in the Extractive Industry
Renewable Energy over the next year is expected to draw $8 trillion in investment which is nearly double the amount that countries will spend on coal, natural gas and nuclear plants. Solar energy in particular will see a $3.7 trillion surge in investment through 2040 and is expected to become the cheapest source of electricity particularly in developing countries.
The expected boom in clean energy technologies will have on demand for the minerals and metals market. Using wind, solar, and energy storage batteries will increase the demand for commodities such as aluminium, cobalt, iron, lead, lithium, manganese, nickel, etc. This move towards renewable energy is also being taken by mining companies due to rising fossil fuel prices and facing growing demand from governments and other relevant stakeholders to operate in a sustainable manner. With mining companies tapping into remote locations in emerging African countries like Mali, Mauritania, Guinea, Senegal and Zambia, renewable energy is most effective source of on-site power as off-grid power is unreliable.
These developments have led the international mining sector to deploy innovative energy saving strategies and investing in renewable energy infrastructure. Shit to a low-carbon future could result in positive long-term strategies for mineral-rich countries by developing their mining sectors in a sustainable way.
Zambia: Zambia has received $34.8 Million from the German development bank KFW to implement a Renewable Energy Feed-in Tariff (REFiT)-Strategy which aims to cope with climate change and the energy scarcity in the country.
Mozambique: Scatec Solar and KLP Norfund Investments have signed a 25-year PPA for a 40MW solar PV plant. It is the first large-scale solar plant in Mozambique. The $80 million plant is located in the Zambézia Province and is expected to deliver 77,000MWh per year to the northern regions of Mozambique and enough clean energy to power around 175,000 homes.