A mining perspective on the potential of renewable electricity sources for operations in South Africa

Transcription

1 A mining perpective on the potential of renewable electricity ource for operation in South Africa Part I The reearch approach and internal evaluation proce by R.G. Votteler* and A.C. Brent Synopi The buine performance of mining corporation in South Africa i adverely affected by the contantly increaing electricity cot. The mot commonly ued power ource are the national utility upplier via a grid connection, and on-ite dieel generator. Previou reearch ha identified the renewable ource of olar photovoltaic (PV), onhore wind, and geothermal energy in hybrid verion with current ource a poible opportunitie to counteract riing electricity cot. To provide a clear undertanding of the new, developing market of renewable energy ource, thi reearch i divided into two paper. Thi firt paper invetigate the internal buine tructure of mining corporation in order to evaluate electricity generating ource. The multi-criteria deciion analyi (MCDA) method i elected a the mot uitable approach for thi. The paper identifie the criteria ued by mining corporation to evaluate poible electricity generation ource for elf-generation by mean of the corporation own invetment. Four mining corporation with everal mining location were interviewed. The interview revealed both new and identical evaluation criteria when the finding were compared to earlier MCDA adaptation analyed in the literature review. The econd paper (Part 2) combine current knowledge about the external macroeconomic environment with the finding about the internal environment decribed here. MCDA i adapted in Part 2 and implemented to analye and compare current to hybrid renewable ource from the perpective of mine. Keyword Multi-criteria deciion analyi, South Africa, renewable electrical energy, mining. Introduction Mining corporation in South Africa are currently adverely affected by increaing electricity price. Electricity i upplied mainly by Ekom 1 and, epecially in remote location, by on-ite dieel generator (Boye et al., 2014). Electricity price increae, emanating from dieel price hike and Ekom, have ecalated the total operational expenditure on electricity by the larget mining corporation from 8% to 20% of total operating cot in the pat even year (EIUG, 2015). The reliability of electricity upplied by Ekom ha decreaed dratically (Govender, 2008), and the price will increae annually by at leat 13% until 1. South Africa tate-owned electricty provider (Ekom, 2015a 2. Summit of mining corporation and renewable energy companie tarted in 2013 to develop and dicu the market of renewable in mining operation (Energy and Mine, 2015) (Numbi et al., 2014; Ekom, 2015b). In addition, the South African government plan to introduce a carbon tax on greenhoue ga emiion (Alton et al., 2014). The ue of renewable ource of energy ha the potential to be an opportunity for mining corporation to reduce long-term electricity cot, diverify energy upply, be le affected by fuel price volatility, decreae greenhoue ga emiion, and how green leaderhip (Nicola, 2014). The combination of technological progre regarding renewable ource and factor in the external environment, like increaing foil fuel price and ocial preure to become greener, increae the attractivene of renewable ource for mining corporation (Roehrl and Riahi, 2000). Mining corporation are relatively new cutomer for renewable energy companie, whoe current target cutomer are motly governmental organization and maller private bodie. Moreover, mining corporation have to be more informed about renewable energy technologie and the poible fit to their pecific need. To optimize the learning proce for mining corporation to undertand renewable energy technologie, and for energy companie to learn how to approach thee potential new cutomer, more reearch ha to be conducted (Steinhaeuer et al., 2012). One of the outcome of everal renewable and mining ummit 2 worldwide i the realization that mining corporation have to become better educated about the concept of renewable energy ource in the context of their unique operational demand (Judd, 2014). * School of Public Leaderhip, Faculty of Economic and Management Science, Stellenboch Univerity, South Africa. Centre for Renewable and Sutainable Energy Studie, Department of Indutrial Engineering, Stellenboch Univerity, South Africa and Sutainable Energy Sytem, Engineering and Computer Science, Victoria Univerity of Wellington, New Zealand. The Southern African Intitute of Mining and Metallurgy, ISSN Paper received Sep. 2015; revied paper received Jun The Journal of the Southern African Intitute of Mining and Metallurgy VOLUME 117 march

2 A mining perpective on the potential of renewable electricity ource Part 1 The purpoe of thi paper i to contribute more knowledge to thi learning proce. Previou reearch ha been directed only at analying the external macroeconomic framework for renewable ource relating to mining operation in South Africa (Votteler and Brent, 2016). The contribution of thi paper i to invetigate the internal buine approach of mining corporation in evaluating electrical energy ource. A trategic method i ued to tructure the reearch, a the exiting theory and previou application create a greater reearch foundation through experience, and which enure that all apect are conidered in order to to achieve the reearch objective. The finding of thi paper about the internal evaluation proce repreent the foundation for future reearch; with the aim of ultimately combining it with current knowledge about the external framework. Thi i the firt of two paper on thee topic. The reaon for dividing the work i initially to create a olid foundation, which i reflected in the tructure of thi paper. The next ection illutrate the reearch methodology, and thi i followed by the election of an appropriate reearch approach and an examination of how pat application can contribute to thi reearch. The internal evaluation proce of mining corporation i then invetigated. Finally, the reearch reult are preented. The objective are illutrated in Figure 1. The econd paper implement the elected reearch approach from a mining perpective, with the final reult of a clear evaluation and comparion of how renewable and current ource perform for mining corporation in South Africa. Reearch methodology Literature review The firt objective wa to identify the mot uitable method. Baed on the work of Petticrew and Robert (2006), a ytematic review wa ued to comprehenively invetigate poible option. Firtly, the paper tate the requirement that the method ha to fulfil to obtain the bet poible olution to the main objective. Reearch wa conducted to elect three method that are mot likely to contribute to the requirement. The three method are introduced and analyed according to the requirement. The lat ection introduce the elected method and provide the reaoning. The econd objective of thi paper wa to identify previou approache of method election in energy planning in imilar cae. Baed on Petticrew and Robert (2006), a tate-of-the-art review wa conducted. Firtly, previou Figure 1 Reearch objective publication in the energy planning field were ourced and key characteritic contained therein were tabulated. The aim wa to invetigate the area in which reearch had already been conducted, and thoe in which new adaptation had to be made for the purpoe of thi reearch. Secondly, an overview i provided of the reult generated in the publication identified. The overview wa of aitance in the interview with mining corporation, a baic background knowledge of application in imilar cae. The aim wa to provide a ubtantial overview of the elected reearch method in energy planning that were implemented between 2001 and Subequently, 26 different paper were identified; 13 purely from a renewable energy perpective, and 13 from a mixed conventional/renewable energy perpective. Semi-tructured interview A qualitative reearch focu wa applied in the form of emitructured interview. The reaon for thi approach wa the exploratory form of the reearch. The reearch included a ample of four different mining corporation. The repondent were deciion-maker or people who knew all about the criteria that the corporation ued to evaluate poible electricity ource. The repondent were firtly interviewed face-to-face to elicit the information about the evaluation proce. The main part of the interview ued a pot-it eion to generate all information in a tructured manner. The emi-tructured interview quetionnaire enured that all apect were conidered in the eion (Newton, 2010). The identified criteria were ued to contruct a deciion criteria table, which illutrated all the relevant criteria that the mining corporation ued to evaluate poible electricity ource. The tranformation from the mind-map to the table wa conducted according to the requirement for criteria, which are enumerated later. A Delphi technique wa ued, which meant ending the contructed table back to the repondent via to obtain confirmation that it reflected their practice accurately. The Delphi technique i in eence a erie of equential round interpered with controlled feedback that eek to gain the mot reliable conenu of opinion of a group of expert (Powell, 2003). The quetionnaire A emi-tructured interview quetionnaire wa et up to collect the neceary information for the third reearch objective. A no approach uing the elected method for energy planning from a corporate perpective wa found, a qualitative exploratory reearch technique wa ued to identify the evaluation criteria. Firtly, the quetionnaire would draw accurate information from repondent. Secondly, it would provide tructure to the interview. Thirdly, it would provide tandard from which fact, comment, and attitude could be recorded. Latly, it would facilitate data proceing, a anwer would be recorded in a common place on each quetionnaire (Hague and Jackon, 1995). Method election Requirement of the method The reaon for uing a trategic method a the foundation of thi reearch i firtly the exiting theory. Extenive academic 286 march 2017 VOLUME 117 The Journal of the Southern African Intitute of Mining and Metallurgy

3 A mining perpective on the potential of renewable electricity ource Part 1 reearch ha been done to enure that the method conider all apect regarding it overall purpoe. Therefore, it provide more aurance in repect of thi reearch that all apect are invetigated. Secondly, previou application in imilar cae contribute to a greater undertanding of how the objective can be met. Thi ection decribe the requirement of the trategic method to bet addre the main reearch objective of thi paper, namely: to invetigate the buine approach of mining corporation in evaluating and electing electricity ource. The requirement were to be ued to find the mot appropriate bai for reearch. To be able to uccefully invetigate the main objective, the trategic method needed to fulfil the following requirement: To provide information to mining corporation about the concept of renewable energy in the context of their own unique uage pattern. A decribed in the Introduction, recent development have increaed the attractivene of renewable energy. Conequently, reearch ha to be conducted to illutrate to mining corporation how thi could fit their pecific need To add to the knowledge of renewable energy companie about the need and buine tructure of thi new type of cutomer, namely mining corporation. The approach ha to create a greater undertanding of renewable energy companie and how bet to cutomize the information about electricity ource to the pecification of mining operation To invetigate the trength and weaknee of elected electricity ource. The approach ha to be able to contribute to the reaoning why a elected electricity ource ha or ha not been conidered appropriate for mining operation. The weaknee hould illutrate what potentially ha to change to make it more attractive To compare different elected electricity ource according to the pecific need of mining operation. It hould be poible to illutrate why certain ource have provided a better fit for mining operation than other. The comparion between currently ued and new technologie add to a better undertanding. Poible method Thi ection lit different popular method that could poibly ait to tructure the reearch. All method lited in Table I were conidered and invetigated. The MCDA, the balanced corecard (BSC), and trategic planning method were found to be mot likely to contribute to the characteritic lited in the previou ection. Table I illutrate which requirement the three elected method fulfilled. The number in the top row are linked to the requirement decribed in the previou ection. Each of the three elected method i briefly introduced, a poible utilization i decribed, and a contribution according to thee characteritic i dicued. Strategic planning approach A trategic planning (SP) model i a tool for buinee to organize their current operation in order to realize the deired future. The model can be een a a roadmap for the buine to get from where it i now to where it want to be. It i of importance for buinee to create a plan, a it provide clarity on how to achieve the planned goal (King and Cleland, 1987). Every trategic planning model hould incorporate even element: plan-to-plan (rarely ued); miion; need aement; trategic objective; outcome meaure; trategie; and performance feed-forward (De Beer, 2000). The SP approach can be adapted and implemented according to the main reearch objective. A mining corporation hould expre in it trategic miion tatement the aim to diverify it electricity mix and hould pecifically et out it approach to adopting renewable ource (Cetindamar et al., 2013). A hortcoming of the SP approach i that it doe not identify trength and weaknee, nor doe it compare the elected technologie according to the pecific demand requirement of mining corporation. Furthermore, it will be influenced trongly by the mining corporation trategic aim. Another hortcoming relevant to thi paper i the more trategic nature of the SP approach to improve a company buine coordination (Jakhotiya, 2013). The objective of thi reearch i oriented toward a once-off deciion. Balanced corecard approach The balanced corecard (BSC) i a tool that convert the trategy and miion of an organization into qualitative and quantitative performance indicator. The indicator provide the tructure for an effective, dynamic, and timely trategic management and meaurement ytem to achieve the overall trategy (Wetermann and Sehl, 2006). The corecard approach identifie element and requirement that have to be conidered in order to follow the trategy with the bet poible outcome. The original Balanced Scorecard of Robert Kaplan and David Norton (1992) entail four coring Table I Poible trategic method Method Requirement 1 Requirement 2 Requirement 3 Requirement 4 Multi-criteria deciion analyi1 Balanced corecard2 Strategic planning3 (1) Ihizaka and Nemery, 2013; (2) Wetermann and Sehl, 2006; (3) King and Cleland, 1987 The Journal of the Southern African Intitute of Mining and Metallurgy VOLUME 117 march

4 A mining perpective on the potential of renewable electricity ource Part 1 element: financial, cutomer, internal buine procee, and learning and growth (Linard and Yoon, 2000). The BSC principle could have been ued to fulfil the main reearch objective of thi paper, with ome adaptation for mining corporation that have the goal of becoming involved in renewable energy ource. The adaptation and application would contribute to providing information to mining corporation, a it would how all the criteria that a mining corporation ha to fulfil to realize uch a project. The BCS approach would contribute to informing mining corporation about renewable energy by illutrating the main requirement that have to be fulfilled when realizing on-ite renewable energy project. The mining corporation would be able to undertand in which area adjutment have to be made or, perhap, that no realization of objective would be poible a the requirement are imply not achievable. The hortcoming here i that the requirement are not baed on the pecific need of a mining corporation. Furthermore, the fact that the requirement are baed on what the technology can upply, rather than on the demand of the mining corporation, make comparion difficult a the requirement might differ. Another problem i that the BSC approach require the mining corporation to have the initial trategic goal of getting involved in renewable energy (Peron, 2013). A the market i till relatively new, mining corporation firt have to be informed about the poibilitie of renewable energy in catering for their pecific need (Chilett, 2014). Conequently, with adapting and applying the BSC, the criteria ued are baed on the technology pecification and not the mining corporation perpective, which limit the informative data. The approach hould not illutrate the requirement to realize the technology, but rather how it would work baed on the mining corporation need. Multi-criteria deciion analyi Multi-criteria deciion analyi (MCDA) i a method that i utilized in making complex deciion. When making complicated deciion it i neceary for the deciion-maker to handle a large number of criteria that influence the deciion. The MCDA method ait the deciion-maker to elect the bet poible alternative (Ihizaka and Nemery, 2013). The MCDA proce i generally divided into three main tep: problem tructuring, model building, and approval of the model (Stewart and Belton, 2002). It wa found that the MCDA method could be adapted to the context of the main reearch objective a it could illutrate to mining corporation which election among electricity ource would be mot uitable. The method would achieve thi by utilizing the mining corporation own evaluation criteria. Firtly, the reearch would identify the criteria that mining corporation ue to evaluate poible electricity ource. Secondly, the type of electricity ource and poible uncertaintie in the internal and external environment would be identified. Thirdly, baed on the identified criteria, an MCDA method would have to be developed to analye different electricity-generating technologie. The mot likely and attractive technologie could then be analyed and evaluated. The MCDA method developed for the purpoe of thi reearch would contribute to providing information to mining corporation by indicating the poible fit of renewable energy. The corporation would be able to undertand, according to their own evaluation criteria, what the ue of renewable energy entail. However, the method would be developed according to a pecific type of electricity ource to enure that the ame criteria can be ued which would limit the applicability to technologie. Poible different type of technologie are elf-generating ource, like dieel generator, and tri-generation ytem, like combined heat and power (CHP). The renewable energy company would gain more undertanding of how mining corporation evaluate uch project. Conequently, it would eae communication about a poible project realization, a information package about the technology can be cutomized from the beginning. The MCDA method enable the mining corporation to identify the trength and weaknee of the elected technologie from it own point of view (Stewart and Belton, 2002). A clearer undertanding of how the new technologie would perform compared to the preent one would be obtained. It would be poible to compare, according to each criterion, how the different alternative perform. Cloe attention ha to be paid, however, to enuring that no external influence are neglected. Selection of trategic method The MCDA technique wa elected a the mot appropriate method to invetigate the main reearch objective. The technique evaluate and analye electricity option from the perpective of mining corporation. The other two approache would require the initial aim of the mining corporation to be to implement renewable energy, and would not analye the technologie according to the mine own criteria. A the market for renewable ource of electricity i till in it infancy (Chilett, 2014), the MCDA method wa conidered more uitable. The renewable energy company would be able to gain the mot valuable information from the MCDA method, a it identifie the criteria and tructure that are important to mining corporation. In addition, a the technology i new for mining corporation and not for the renewable energy company, it would be more beneficial to analye the trength and weaknee and to compare the technologie from the perpective of the mining corporation. Another reaon i that the SP and BSC approache are more oriented toward the ucceful realization of a buine trategy than of a phyical project. The BSC aim to continually meaure, according to elected criteria, how cloe the performance i to the overall trategic goal. The reearch content of thi paper, on the other hand, aim for a once-off deciion. Latly, the SP approach involve the invetigation of the different technologie, the internal iue, the external influence, the market potential, and a poible cenario analyi. A the market i till in it infancy, the key focu hould be on the education of the mining corporation. Exiting application to imilar cae Previou MCDA approache to energy planning To be able to gain an overview and an undertanding of how MCDA approache have been ued in energy planning in 288 march 2017 VOLUME 117 The Journal of the Southern African Intitute of Mining and Metallurgy

5 A mining perpective on the potential of renewable electricity ource Part 1 recent year, a literature review wa conducted. Twenty-ix other approache were identified and ummarized in the ame way a the MCDA approache were ued, namely according to publication year, energy alternative elected, final ranking of alternative, type of criteria ued, type of alternative, main takeholder (perpective), project ize, ource of criteria ued, and the area of implementation. The reult are repreented in Table II. The point below introduce each column in Table II and provide a brief ummary of the finding: Column 1 firtly enumerate each article of the 26 article, with the purpoe of uing them to review the criteria ued in energy-planning MCDA approache (Table III). Secondly, the election of pat MCDA approache wa divided in half: 13 mixed electricity alternative and 13 purely renewable alternative. The main reaon wa to illutrate if there were difference in the election of the evaluation criteria, which are hown in Table III. Mixed alternative, beide renewable energy, include other non-renewable energy ource like nuclear, coal, and/or other foil fuel Column 2 give the author and the publication year of the tudy. Nineteen (73%) of the 26 article were publihed between 2009 and 2014, with the oldet in 2001 Column 3 and 4 name all electricity alternative that were analyed by the MCDA. In the mixed alternative, i.e. article 1 to 13, the mot frequently nominated alternative wa wind with 12, followed by olar (11), hydro (11), ga (11), nuclear (10), and coal (9). In nine of the 13 article, ranking and preferred choice were preented. A maximum of the top four choice are indicated. It i noteworthy that no non-renewable ource featured among the top four approache. Wind wa lited nine time, followed by hydro (8) and olar (6). The renewable energy ource (RES), i.e. article 14 to 26, mot recurrently elected a an alternative were wind (10 time), followed by olar (9), hydro (9), and bioma (8). In even of the 13 article, ranking and preferred choice were preented. Again, a maximum of the top four choice are indicated in Table II. Wind wa lited in all even top rating, olar in ix, and hydro in two. Again, the ame type of electricity ource a in the mixed article were the preferred choice Column 5 repreent the genre of criteria that the tudy ued to evaluate the alternative. However, only 16 of the 26 article clearly ubdivided the criteria into genre. With 14 liting, technological and environmental genre are ued mot frequently, followed by economic (11), ocioeconomic-political (6) and ocial (6) Column 6 firtly how the ize of poible project the MCDA wa dealing with. It i divided into mall-cale (up to 5 MW) and utility-cale (>5 MW). Secondly, the main takeholder for the MCDA election i given. In 19 publication the purpoe wa to find the bet utilitycale alternative for a country electricity demand, and in one publication for mall-cale reidential building. The project ize wa utility-cale in 20 article and mall-cale in one. The other article did not pecify the ize or main takeholder Column 7 indicate the type of deciion-maker who were involved in identifying the evaluation criteria. In 19 MCDA approache, deciion-maker were not pecified and a literature review wa ued. The other even approache ued different type of deciionmaker depending on the objective Column 8 and 9 tate the topic of the MCDA approach and the phyical area of implementation. A regional implementation wa found in 15 publication. Turkey had the highet implementation rate (5), followed by Spain (2) and Greece (2). Almot half (7) were within the European Union. Evaluation criteria in previou MCDA approache Thi ection provide an overview of the evaluation criteria that were ued in the MCDA approache from article no. 1 to 26 in Table II. The liting of publication in column 1 of Table II i repeated in Table III to indicate how often criteria appeared in the literature. The mot frequently recurring criteria are lited, and the number pecifie the publication in which they appeared. In cae where criteria were ued le than three time, they were categorized under Other. The criteria in Table III are divided into categorie: technical, economic, and environmental and ocio-political. Thi wa baed on the reult of type of criteria in column 6 of Table II. The technical category addree the phyical characteritic of the electricity alternative. The economic category invetigate the financial feaibility. The environmental category evaluate the impact of the alternative on nature. Latly, the ocio-political category meaure the influence on the quality of life of people affected by the project (Mateo, 2012). The criteria ued in the MCDA approache are further ubdivided into thoe ued in approache evaluating, on the one hand, mixed ource and on the other, only renewable energy ource. Criteria are noted only when they occur in more than three paper. The following provide a brief ummary of the finding. Technical the criteria indicate that overall efficiency (n=10), capacity factor (n=8), reliability (n=8) and maturity (n=7) are mot frequently evaluated. A trong difference in application between mixed and renewable ource can be een with maturity. It how a higher regularity in the cae of renewable energy ource Economic thi category how that invetment cot, with n=18, i predominantly ued, followed by fixed and variable operation, and maintenance cot (n=11) and electricity cot (LCOE). A ignificant difference can be een with the criteria ervice life and implementation period, which are ued motly with the renewable energy ource Environmental the mot frequently ued criterion i external cot, with n=16. The external cot include different type of emiion. Some MCDA approache pecified the variou emiion, while other ummarized thi apect into one criterion. Further criteria are land ue (n=10) and noie (n=4) Socio-political the criteria illutrate that ocial acceptability and job creation were mot regularly ued, with n=10. In addition, lo of life expectancy wa ued in n=6. The criterion ocial benefit wa ued only in mixed MCDA approache. The Journal of the Southern African Intitute of Mining and Metallurgy VOLUME 117 march

6 A mining perpective on the potential of renewable electricity ource Part 1 Table II Review of MCDA approache in energy planning 290 march 2017 VOLUME 117 The Journal of the Southern African Intitute of Mining and Metallurgy

7 A mining perpective on the potential of renewable electricity ource Part 1 Impact on the MCDA approach for mining corporation The purpoe of thi paper, a tated in the Introduction, i to invetigate the internal evaluation proce regarding poible electricity ource for mining corporation in South Africa. Thi will contribute to the foundation of an MCDA approach for mining corporation in South Africa to optimize the evaluation of electricity generation ource. The literature review provide an overview of how MCDA approache have been ued in energy planning in pat year. The following point indicate how they contributed to, or affected, the identification of the criteria of thi paper. Not one MCDA approach in energy planning could be found from the perpective of a corporate entity. Conequently, the previouly ued criteria can be ued only a an indication The only MCDA approach to energy planning on the African continent wa in Tuniia. No uch approach to energy planning wa found in South Africa The overview of previouly ued evaluation criteria ait in electing the criteria for mining corporation. A the marketing of renewable energy to mining corporation i relatively new, repondent might not include all important criteria for renewable ource. The lited criteria of energy planning erve a a checklit and might indicate that further invetigation have to be conducted The type of criteria ued in previou publication provide a olid indication about which are important for the evaluation of electricity generation ource The overall preferred election of olar, wind, and hybrid technologie indicate the renewable alternative that hould be included in the MCDA approach for mining corporation. Foundation to the internal evaluation proce Type of alternative to be evaluated A the main purpoe of thi paper i to provide more The Journal of the Southern African Intitute of Mining and Metallurgy VOLUME 117 march

8 A mining perpective on the potential of renewable electricity ource Part 1 Table III Review of criteria ued in energy planning MCDA approache information about the criteria ued by mining corporation to evaluate poible electricity ource, with the final outcome of being able to compare renewable with current ource, it i important to define the exact characteritic of the type of alternative available. The purpoe of pecifying the election tandard for alternative i to create more tranparency in the proce of analying and evaluating them by comparing them with each other (Stewart and Belton, 2002). In cae where alternative are too different in nature, it become more difficult and le informative to compare them according to the ame criteria (Keeney, 1996). Earlier reearch by Votteler and Brent (2016) invetigated the external macroeconomic environment to reveal the potential of renewable ource for mining corporation in South Africa. Baed on thi reearch and the previou MCDA application in energy planning, olar PV, 292 march 2017 VOLUME 117 The Journal of the Southern African Intitute of Mining and Metallurgy

9 A mining perpective on the potential of renewable electricity ource Part 1 onhore wind power, and hot dry rock geothermal power were elected a the renewable ource with the greatet potential. Owing to the intermittency, epecially of olar PV and wind power, and the contant electricity demand of mining operation, hybrid verion with current electricity ource were identified a the bet option. In addition, baed on the current legilative and regulatory framework in South Africa, the buine model of elf-generation 3, in the form of own invetment or a power purchae agreement, ha the greatet potential. A the purpoe of the development of the MCDA for mining corporation wa to create more tranparency, own invetment wa elected. The reaon for thi choice wa to focu the attention on the performance of the technology and not on third partie (Boye et al., 2014). Therefore, deciion-maker at mining corporation were aked to lit the evaluation criteria that they would ue to evaluate the following electricity ource: Dieel generator Hybrid dieel generator / olar PV Hybrid dieel generator / onhore wind power Hybrid dieel generator / geothermal power Ekom grid connected Hybrid Ekom grid connected / olar PV Hybrid Ekom grid connected / onhore wind power Hybrid Ekom grid connected / geothermal power. Stakeholder The buine model ha great influence on the type and number of takeholder involved in etablihing an electricity ource for mining operation. All takeholder and their influence on the deciion-making proce have to be identified to enure that the bet poible olution can be found (Boye et al., 2014). The elected model of elfgeneration and own invetment involved three main takeholder: the mining corporation, the project developer, and the legilative and regulatory body. The mining corporation wa the main takeholder for the purpoe of thi reearch, a it i the deciion-maker regarding a poible project realization. The deciion-maker have to cover two main area: operation and finance. Deciion-maker electing an alternative from an operational perpective will make ue of criteria that enure that the generating ource will atify the electricity demand of the mine (Cookie et al., 2007). Deciion-maker electing an alternative from a financial perpective will make ue of criteria to find the mot feaible alternative for electricity generation at the mining location (Goh et al., 2014). The project development company i reponible for the realization of the alternative. The companie repreent the different electricity ource and will provide the data neceary to feed the evaluation criteria to execute the MCDA approach. The developer ha no direct influence on the deciion-making, and can only affect the attractivene of the project (Lerro, 2011; Alani, 2014). The regulatory and legilative body in South Africa dictate the framework regarding the buine model of how 3. The mining corporation develop it own on-ite renewable generation ource (Boye et al., 2014). electricity project will be realized. A previouly tated, according to thi framework the model of elf-generation wa elected a the mot lucrative. It further influence the actual development of the project with factor like compulory environmental aement, which alo conider the urrounding communitie (Lerro, 2011; Frot, 1995). Reearch reult Profile of mining corporation To reveal the criteria that mining corporation ue to evaluate poible electricity generation ource, four different mining corporation were included in thi tudy, a illutrated in Table IV. In three the repondent were electrical engineer, and in one cae the manager of a utility upply chain with reponibility for ix mine. Emphai wa placed on gaining information from a variety of mine with different reource, ize, and target in order to gain optimal inight. The reource mined were gold, coal, chrome, and zircon. The average annual electricity conumption per mine varied from 4.2 GWh to GWh. A the Ekom tariff varie according to factor like eaon or time of day, the yearly average price wa tated for the ake of implicity. All mine were connected to the grid, with dieel generator a backup ytem. One of the mine had intalled a 1 MW olar PV plant, and two other corporation were conducting olar PV and onhore wind power feaibility tudie. Criteria characteritic and requirement To tructure the internal evaluation proce, a deciion table wa developed. The table of mining corporation evaluating different alternative for electricity ource had to be contructed according to certain characteritic. The deciion table wa baed on the reult of the pot-it mind-map from the interview with deciion-maker. To be able to identify a clear tructure and to ue the criteria for further analyi in a MCDA approach, pecific requirement had to be fulfilled by each criterion (Stewart and Belton, 2002). Value relevance the deciion-maker ha to be able to relate the concept to the aim of the mining corporation, which enable him or her to define a clear preference for the criterion Undertandability the criterion ha to be clearly identified and explained. Each peron involved in the deciion-making proce ha to know the exact meaning to prevent any confuion and mileading reult (Edward et al., 2007) Meaurability it ha to be poible to meaure each criterion in a conitent manner according to the alternative being analyed. A the deciion table i the foundation of an MCDA analyi, thi requirement i important to create meaningful reult Non-redundancy there hould not be more than one criterion meauring the ame factor. A negative reult would be to have faulty reult, e.g. one factor ha too much weight becaue it wa counted more than once (Edward et al., 2007) Judgmental independence one criterion hould not have ignificant influence on the performance of another criterion (Loken, 2007) Balancing completene and conciene all apect of The Journal of the Southern African Intitute of Mining and Metallurgy VOLUME 117 march

10 A mining perpective on the potential of renewable electricity ource Part 1 Table IV Characteritic of mining corporation interviewed alternative in a deciion proce have to be addreed by the elected criteria. However, when electing too many criteria the reearcher ha to beware of omitting to conider the previouly mentioned requirement (Edward et al., 2007; Loken, 2007) Operationally criteria hould not be only theorybaed, but hould alo be practically proven. The deciion criteria The interview with the mining corporation howed that poible electricity ource were evaluated baed on their being independent and able to upply electricity (including the neceary fuel) on their own, and within the invetment capability of the corporation. The criteria are lited and decribed in Table V. The firt column provide the category and the econd the criteria. The economic category included two criteria that meaured the economic value of the electricity ource, namely: levelized electricity cot and net preent value. Thee criteria ued everal value a part of the calculation. The prediction of fuel cot wa new in regard to the literature review. Further new criteria were upply 24/7, ervice level, corporate image, and effect on community. It i important to mention that the criteria lited in Table V repreent a ummary of all criteria ued during the evaluation proce, and that mot had been applied in other energy planning evaluation at variou point in time. The equence tarted with technological criteria, aimed to enure that the potential electricity ource could atify the electricity requirement of the mining operation. Thereafter, technologie that paed the technical criteria were analyed according to economic criteria. Latly, environmental and ocial criteria were evaluated. Mining corporation have peculiaritie not found in previou MCDA evaluation. Firtly, mining operation are more profit-oriented in comparion to national electricity provider. Therefore, criteria like initial invetment cot, which can have a coniderable influence on the balance heet in the firt year, have higher priority for mining corporation than for electricity provider. Secondly, owing to the limited mix of electricity ource and the requirement of contant electricity upply, the criteria of reliability and upply 24/7 are more important to mine. Both were therefore ued a prerequiite in the choice of the type of electricity ource to be evaluated in Table V. Another criterion that had to be conidered, which did not feature in previou evaluation, wa the predicted lifepan of the mine, a thi factor ha a coniderable influence on the economic criteria, and conequently on the feaibility of the project. Concluion The preparation of thi paper i jutified by two fact. Firtly, the difficultie with current electricity ource in South Africa have increaed the attractivene of the teadily advancing renewable technologie for mining operation in the country. 294 march 2017 VOLUME 117 The Journal of the Southern African Intitute of Mining and Metallurgy

11 A mining perpective on the potential of renewable electricity ource Part 1 Table V Evaluation criteria of mining corporation The Journal of the Southern African Intitute of Mining and Metallurgy VOLUME 117 march

12 A mining perpective on the potential of renewable electricity ource Part 1 Table V Evaluation criteria of mining corporation Secondly, previou reearch ha been directed only at invetigating the external influence on thi market. The contribution of thi paper i an invetigation of the internal buine approach of mining corporation toward evaluating electricity generation ource. Thi reearch ha hown that the MCDA method i the mot uitable approach. No application of the MCDA method in energy planning from the perpective of corporate or mining entitie could be found mot MCDA adaptation were from the perpective of governmental bodie or general electricity ource evaluation without a pecific perpective. In addition, no adaptation of MCDA method in energy planning ha been conducted in a South African context. Conequently, in the abence of data, qualitative interview were conducted with four mining corporation operating in South Africa to reveal the criteria that thee organization applied in order to evaluate poible electricity ource. The difference found between the election criteria ued by the four corporation and thoe of previou approache in the literature are the reult of different perpective. Mine are profit-oriented buine entitie and electricity generation i not their core buine, while previou approache were more focued on the technological and environmental factor. Thi paper ha etablihed the bai for evaluating and comparing current and renewable electricity-generating option from the perpective of mining corporation in South Africa. The reaon for ubdividing the work into two paper wa to create a bai of two component: the firt being the current knowledge about the external framework; while the econd reveal the internal framework. 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