Analysis of Cogeneration (Cogen) in the South African Mineral Processing Industry

  • ID: 3733837
  • Report
  • Region: Africa, South Africa
  • 41 Pages
  • Frost & Sullivan
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Cogen is the First Step Towards Weaning Smelters Off the Grid
The cogeneration industry in South Africa is still in a nascent stage of development in South Africa. The addressable market is estimated at 1,277 megawatts. Further penetration of the market will be driven by the rising costs of electricity, environmental concerns, and energy securities. Moreover, the changing business model in the mineral processing sector will impact how original equipment manufacturers and engineering companies approach their equipment designs. Engineering companies are starting to design furnaces that incorporate cogeneration systems. This study will focus on mineral processing facilities, as electricity accounts for approximately 30% of operational costs.

Evolution of the Cogeneration Industry

- Cogeneration (cogen), also known as Combined Heat and Power (CHP) is the simultaneous generation of both electricity and useful heat from the same fuel source. Cogen systems can be powered by a variety of fuels, including coal, biomass, natural gas, nuclear material, the sun, or the heat stored in the earth.

- For several decades, cogeneration has been considered as a high efficiency solution. In the early development of electricity generation, the on-site generation of electricity at industrial facilities was common. Central power utilities were at their early stages of development and were more expensive than on-site generated power. Many on-site generation facilities were retrofits of existing boilers, which made Cogen a convenient and more economical way of meeting both thermal and power needs in industrial facilities.

- However, as the reliability of central electricity generation increased and prices decreased as a result of improved technology and economies of scale, Cogen remained effective and economical only to industries with a high steam demand and free by-product fuels that could be used in the Cogen system.

- After a period of decline, Cogen‘s adoption increased significantly during the 1980s due to the industrial sector‘s impact on the environment. It is receiving renewed interest lately as a means of increasing energy efficiency and reducing greenhouse gas (GHG) emissions because of the policy frameworks instituted to moderate energy consumption and carbon footprints. New technology developments have added to this potential.

Key Findings

Addressable Market
- The cogeneration (cogen) industry in South Africa is still in the early stages of development. The addressable market is estimated at MW. Further penetration of the market will be driven by rising electricity costs, environmental concerns, and energy securities

New Business Model
- Investors value smelters based less on what they mine and process and rather more on how efficiently they do so. The effective use of energy and reduction of emissions will be critical for companies to remain cost effective and competitive in the future global market

Engineering Companies and OEMs
-Changing business models in the mineral processing sector will have an impact on how Original Equipment Manufacturers (OEMs) and engineering companies approach equipment design. Engineering companies are starting to design furnaces that incorporate cogen systems

Cogeneration OFIT
- The COFIT will drive development funding towards the Cogen industry; this will create an opportunity for smelters to diversify into the energy sector
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1. Executive Summary
  • Key Findings
2. Introduction
  • List of Definitions
  • Evolution of the Cogeneration Industry
  • Impact of Electricity Mix and Shortage on Smelters
  • Mining and Mineral Processing - South African Economy
  • Market Background
  • Research Aim and Objectives
  • Research Scope
3. Cogeneration Overview
  • Cogen Applications in the 20th Century
  • Business Models Utilised by Engineering Companies
  • Cogen Technologies - Bottoming Cycle Process
  • Cogen Technologies - South African Smelter Market
  • Industry Structure - Cogen is in Nascent Stage of Development
4. Mineral Processing Industry - Overview
  • Mineral Processing Industry - Current and Future Business Models
  • Market Size-Potential Capacity Of Smelters
  • Key Trends Influencing Uptake of Cogeneration within Mineral Processing Industry
  • Challenges Impeding Uptake of Cogeneration within Mineral Processing Industry
  • Trends and Opportunities - Diversified Business Models for Smelters
5. Conclusion and Strategic Recommendations
  • Conclusions
  • Recommendations
  • Legal Disclaimer
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