SA is not even in the game when it comes to solar electricity generation, which is forecast to rapidly expand in the world’s key economies in 2019.
SA has abundant sunshine, according to the department of energy’s website, but it is a sorely underutilised resource that could ease the country’s electricity shortage, which is at crisis levels. China has 45GW of installed solar photovoltaic capacity, which matches what Eskom’s on-paper capacity is from its coal-fired power stations, small hydro-schemes — which need electricity from the coal stations to keep them operational — and diesel-powered plants.
Looking at the pace of global photovoltaic installations contained in a report by IHS Markit, it is clear that SA doesn’t have a clue when it comes to this form of energy. The latest projections are for global solar photovoltaic installations to grow 25% this year to 129GW. SA doesn’t feature.
SA, in its latest integrated resources plan (IRP), envisions just shy of 8GW from solar by 2030, with nearly half its energy needs coming from 34GW of coal-fired electricity.
And why is SA not going flat out on solar? The reason is contained in the updated IRP. “Taking into account grid constraints and available SA capacity (engineering, manufacture, supply, construction, financing and project management), the roll-out of wind and solar photovoltaic capacities at the maximum annual build limits may not be practical,” the report said.
It is a disgrace that SA is not planning to make more use of an environmentally friendly, abundant natural resource. It is a bigger shame that it is not getting out of the way of those who want to install these systems, both independent power producers as well as small and large electricity users.
Commodity price rallies' boost to JSE mining shares likely to be short-lived
Mining shares have consistently buoyed the JSE so far in 2019, but it is likely that the rallies in commodities that have made this possible will be short lived.
Palladium, iron ore and oil have all helped the JSE's resources index rise 17.25% in 2019, compared to the all share's 9.51%.
But cracks are starting to emerge.
Palladium's gains have certainly been the most impressive, but the metal, which is used in vehicle-emissions technology, has caught the attention of speculators and is in bubble territory.
Although no crash is expected for palladium, its price fell last week, snapping a 13-week streak of gains for the JSE's platinum index.
Iron ore's rise continues, helped by shortages of supply due to the collapse of a tailings dam at Vale's Corrego do Feijao iron ore mine in Brazil. This week, Vale, the world's largest producer, announced that it had failed to receive stability certificates for 13 other dams at the mine.
The world's second-largest producers, BHP and Rio Tinto, were both hit by a cyclone in Australia in March, which disrupted their operations,. helping to further reduce global supply and increase prices. But a slowing global economy, and tensions between the US and China, could see a reduction in infrastructure spending and demand for steel.
Diversified miners have also benefited from a 28.33% rise in the oil price so far in 2019, but it is by no means clear that the hefty production cuts by oil-cartel Opec will ensure reduced supply.
US shale producers have demonstrated their ability to ramp up production in the face of rising prices, despite supply concerns from Venezuela as well as looming sanctions on Iran.
All in all, shareholders in mining companies are always at risk of having their fingers burnt. This year seems no different.
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