Despite criticism and objections from activists and researchers, it appears likely that SA will go ahead with plans to secure at least 3GW to 6GW of gas-powered electricity generation capacity within the next few years. The country also desperately needs to secure additional gas supply supplies for industrial users. What isn’t clear is where the gas will come from, who will pick up the bill for new infrastructure required, and when new gas projects are likely to come online.
A report published earlier this year by the International Institute for Sustainable Development — which argues strongly against investment in new gas infrastructure, in part because those infrastructures are at risk of becoming stranded assets once sufficient renewable energy sources become available — says that while SA’s Integrated Resource Plan (IRP) 2019 for electricity infrastructure development envisages 3GW of gas-fired power plants by 2030, there are already proposals for gas-to-power projects on the table for at least 14GW, equivalent to 36% of the nominal capacity of Eskom’s coal fleet.
Gas is a fossil fuel and using it for energy won’t be of much help in bringing SA closer to meeting its climate goals. As the Presidential Climate Commission, activists and researchers have argued, the push for gas risks delaying and diverting resources from renewable energy build and creates fiscal risk through stranded assets.
In addition, by prolonging SA’s lock-in to fossil fuel-based energy supplies, the country’s exporters may face higher export tariffs, such as the EU’s Carbon Border Adjustment Mechanism.
Still, as the world is learning from the energy crisis in Europe, dirty energy is better than none.
Gas demand from the power conversion, private power, industrial, petrochemical and logistics sectors already exceeds supply. An industry body has warned that the country needs to take action within six months to avoid a critical shortage, or “gas cliff”.
In a report that supports the role of gas as a “transition fuel” in the country’s SA’s path to net zero by 2050, Business Unity SA and the National Business Initiative argue that, if supplied affordably, gas will play a key role in helping some of the biggest polluters — most notably Eskom and Sasol — decarbonise.
According to the report, SA consumes about 180 petajoules (PJ) of gas a year and that could increase to between 230PJ and 550PJ by 2030, led by higher demand from gas-to-power electricity generation, which could require about 218PJ a year by 2030, as well as users such as Sasol switching from coal to gas as a feedstock to make petrol.
In the short to medium term, the most viable option would be to increase piped gas supply from Mozambique, as well as accessing liquefied natural gas (LNG) supply via floating storage regasification units through SA’s harbours. Both options would require big investment in new infrastructure.
However, many mega-gas power projects under consideration are being held up by legal challenges, while the roll out of new projects is being delayed by unclear government policies.
The Karpowership deal, part of an emergency power plan that saw the Turkish company awarded a contract to supply more than 1.2GW of power from ship-mounted gas-fired plants, has been delayed by multiple legal challenges.
Eskom’s own plans to include gas in its power mix are tied up in court proceedings where environmental activists are seeking to halt plans for a 3GW gas-to-power plant at Richards Bay.
The mineral resources & energy department published a base-case report for a gas master plan earlier this year, but it has taken the better part of a decade to get to this point, and while some progress is now being made on the policy front, the country is running out of time to secure new gas supply.
As with coal, gas usage is likely to wind down by the middle of the century, which means that the longer any new gas projects are delayed, the less viable they become.
In the end, antigas development activists may find their greatest ally to be the government, since it is hardly known for its speed and agility.
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