LUNGILE MASHELE: Halting Eskom’s gas project is nothing to cheer about

It is both amusing and incredible to witness the celebration that erupted after the Supreme Court of Appeal’s (SCA) decision to annul the environmental permit for Eskom’s proposed 3,000MW gas-to-power plant in Richards Bay. While some hail the ruling as a victory for environmental justice and public participation, the broader implications for SA’s energy security and industrial future are far from celebratory.

Let’s be clear: the court’s decision was based on procedural flaws in the public participation process and cumulative environmental impacts. These are valid concerns in any constitutional democracy. However, the jubilation that followed the ruling seems to ignore the precarious energy and economic context in which SA now finds itself.

[SA's] energy policy is increasingly shaped by ideological rigidity rather than pragmatic realism

We are teetering on the edge of a “gas cliff”. Sasol, SA’s primary supplier of natural gas, has confirmed it will cease supply from its Mozambican fields by June 2028. This is not a distant threat; it’s a looming crisis.

The Industrial Gas Users Association of Southern Africa warns that the inability to secure alternative gas supplies could jeopardise 70,000 jobs and up to R500bn in annual economic activity. Industries that rely on gas for power, heat and feedstock — such as chemicals, glass, steel and food processing — all face an existential threat.

The government is scrambling to find solutions, including talks with Qatar and other potential suppliers. Sasol has proposed a temporary fix using methane-rich gas from its Secunda operations, but this is a costly and short-term measure. Meanwhile, the formation of a gas aggregator by major industrial users is under way, but the clock is ticking.

In this context, the Richards Bay gas plant is not just another fossil fuel project; it is a critical component of SA’s energy transition strategy. It is envisioned as a mid-merit facility to stabilise the grid, complement renewables and provide a cleaner alternative to coal. Its cancellation, even if temporary, sends an ominous signal to investors and developers: SA remains a high-risk environment for energy infrastructure.

Contrast this with the trajectories of countries such as Mozambique, Guyana and Namibia. Mozambique, despite its challenges, is home to one of the largest liquefied natural gas projects in Africa

Guyana, once dismissed as a “banana republic”, is now the world’s fastest-growing economy, with average GDP growth of 47% since 2022, driven by oil and gas production. The IMF projects continued double-digit growth, with oil revenues transforming the country’s fiscal and external positions.

Namibia, too, is poised for a seismic economic shift. With major discoveries in the Orange Basin and a 40-well drilling campaign on the horizon, the country is attracting global energy giants and investors. The Namibian government has unveiled an ambitious development plan targeting average economic growth of 7% over the next five years based on hydrocarbons, green hydrogen and renewable energy.

SA, on the other hand, risks being left behind. Our energy policy is increasingly shaped by ideological rigidity rather than pragmatic realism. We must ask ourselves: can we afford to reject gas when our economy is gasping for breath?

The SCA ruling should not be the end of the Richards Bay project but a reset. Eskom must return with a robust, inclusive and participatory application. The project is aligned with our Integrated Resource Plan, our climate commitments and industrial strategy. To abandon gas altogether, as some would prefer, is to ignore the realities of engineering and economics.

In the end, the real victory will not be in halting projects but in building a resilient, inclusive and sustainable energy future. One that keeps the lights on, the factories running and the economy growing.

• Mashele, an energy economist, is a member of the board of the National Transmission Company of SA.