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Johannesburg IT MAY sound unusual, but mobile telecommunications company MTN will soon be making money by selling carbon credits following its R22m investment in a tri-generator power plant.
The United Nations (UN) has created a clean development mechanism programme to mitigate greenhouse gas emissions by encouraging investment in low-carbon industrial and commercial processes. The carbon credits are traded under a worldwide trading scheme that allows industrialised countries to meet their commitments under the Kyoto Protocol to reduce their carbon footprint.
The sale of carbon credits has created a window of opportunity for SA’s reformed polluters to benefit by selling the credits.
SA is a polluter of note.
The country is among the world’s biggest emitters of greenhouse gases. Most of its greenhouse gas emissions come from Eskom’s several coal-fired power stations.
Some South African companies have shown interest in the credits. Specialist chemical services company Omnia has begun the production of credits from its Sasolburg plant.
Other local companies are at different stages of the registration for the credits.
But the initial euphoria around the carbon credits died down somewhat, as the recession cut the price of the credits.
Few would have guessed that MTN would be among the companies to register a carbon credit project. Last week, the company unveiled its tri-generation plant to be based near its premises at Fairland, in Roodepoort. Tri-generation refers to the simultaneous production of heat, power and chilled water.
Of course, the overriding objective of the methane-driven 2MW plant is to ensure power supply to MTN. Major companies face the risk of a shortage of supply of electricity, as well as burgeoning costs associated with this.
Eskom has said that power supply will be tight in the period between next year and 2012 and the period after 2017.
In addition to that, the National Energy Regulator of SA’s electricity tariff determinations of the past two years leaves no doubt that the era of cheap electricity is truly behind us.
It makes sense for companies to lessen their dependence on Eskom’s power.
MTN SA MD Karel Pienaar says the plant will reduce the greenhouse gas emissions associated with electricity consumption at its headquarters. MTN itself says the resultant reduction of its carbon footprint is an unexpected but positive outcome.
“We have been able to register this initiative as a carbon credit project with the US-based project to offset the costs associated with purchasing the gas and the tri- generation plant,” Mr Pienaar says. MTN will get the gas from Sasol ‘s Secunda plant via Egoli Gas, a natural gas distributor.
“We are seen as ‘green’ through the reduction of greenhouse gas emissions associated with electricity consumption and the consequent reduction in the generation of coal-based electricity and its associated environmental consequences. So we earn credits while generating our own electricity and recycling the water. It is a win-win situation,” Mr Pienaar says.
Relative to coal, methane is clean burning.
Unlike MTN, several of SA’s industrial companies produce heat in the course of their operations, lending themselves to co-generation opportunities. Co-generation is the use of a heat engine or a power station to generate both electricity and useful heat simultaneously. This is what most companies are considering to ensure a non-grid source of electricity. Compared to these companies, MTN took the tougher route because it does not produce heat during the course of its operations.
Eskom has also indicated its intention of applying for carbon credits for its coal-fired power Medupi power station as Medupi uses supercritical coal technology, also known as “clean coal”.
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