Seriti Resources, a South African coal producer, said it has a long-term agreement to source power from a wind farm that will be built by its green energy unit.
The 155-megawatt, R4-billion ($235 million) project by Seriti Green, to be developed in the nation’s coal-rich Mpumalanga province, will provide electricity for mining operations, group Chief Financial Officer Doug Gain told reporters in Cape Town Thursday.
The wind farm will be the largest in South Africa and generate about 75% of the electricity needed for Seriti’s coal operations, according to the company.
Infrastructure capable of providing 900 megawatts of green energy will be built over the next few years and the renewable resources unit is in talks with larger customers to buy that power.
South African mining operations have been hard hit by electricity shortages since 2008 due to the failure of state-owned utility Eskom to meet demand.
Producers of the dirtiest fossil fuel are considering the use of renewable power as the nation moves to implement a carbon tax and strives to meet targets to lower emissions.
Renewable energy from Seriti’s wind project will be considerably cheaper – as much as 40% less expensive – than buying electricity from Eskom, said Seriti Green Chief Executive Officer Peter Venn.
The utility received approval from the regulator last month to raise power prices by the most in over a decade.