The South African cabinet has approved the Integrated Resource Plan (IRP 2019) that plotted the path for the nation’s generation technology mix to assuage the current energy crisis in the country.
At Africa Oil Week, its Minister of Minerals Resources and Energy, Honourable Gwede Mantashe, outlined the role that oil and gas will play going forwards.
He pointed out that hydrocarbons, particularly gas, will be an important part of the energy mix in the future.
“We intend to establish the first LNG hub in the Coega IDZ, in the Eastern Cape Province,” he said.
“I have been talking to investors at this conference and they should take the opportunity to engage with our officials on this matter as it is an opportunity not only to invest, but to also help develop the gas industry in this country.”
Infrastructure plans to harness gas potential
The plan is that the first LNG import terminal at the Coega Special Economic Zone (SEZ) site will lay the foundation for a breed of new gas to power plants as well as driving the conversion of existing power plants from diesel to gas.
It is also intended as a base to import feedstock for the gas to liquids refinery in Mossel Bay.
“The framework for supporting this major programme will be announced by my department in the near term,” added Mantashe.
“Linked to this is an amendment to the Gas Act 2001, which will be tabled in Cabinet soon.”
Mantashe explained that South Africa gas to power technologies will provide the flexibility that is needed to back up the intermittent nature of renewable energy and meet peak demand during busy periods.
“In the short term the opportunity is to pursue gas import options, in the future, local and regional gas resources will allow for scaling up within manageable risk levels,” he said.
“Indigenous
gas like coal-bed methane and, ultimately, local recoverable shale and coastal
gas are options we are considering. On the Upstream, work is underway on a
Petroleum Resources Development Bill, which will be before Cabinet soon.
“Our oil and gas needs to be harnessed to deliver modern energy services to all
households and businesses. Our gas must power plants and other petrochemical
facilities in our countries as it reaches for export markets. This will
ensure that we do not always import beneficiated
hydrocarbons.”
Upstream aspirations for South Africa
On the regional front, Mantashe said that they have noted with great interest
and a sense of admiration, the major gas finds in the Eastern part of the
continent, especially in Mozambique and Tanzania.
“We remain patently aware that one of the oil companies in South Africa played a pivotal role in the monetisation of the earlier gas finds in Mozambique,” he said.
“Earlier
this year we also announced hydrocarbon finds by Total and its partners off the
Mossel Bay coast. We are confident that this find will spur further
interest in the upstream potential of South Africa.
“We have taken note of global industry shifts and are encouraged that many
countries in our continent have set themselves the vision to enter the global
gas market and promote the development of a domestic and regional gas
market. Natural gas can improve the efficiencies of many industries
currently using sub-optimal fuel sources in their production processes and
resulting in a turnaround in the industrial capacity and demand in the region.”
A new energy future
Mantashe explained that the IRP reflects the fact that South Africa’s energy
generation landscape is evolving.
“Old assumptions should give way,” he added.
“For example, demand is not captive to the national grid; costs are declining as a result of technology advancements and our national utility, Eskom, is being restructured into its regulated functions of generation, transmission and distribution.”
Coal will continue to play a significant role in electricity generation for South Africa, but renewable energy is growing in importance.
“We have a more than thirty-thousand-megawatt portfolio of existing coal power plants, and the abundance of the resource,” he explained.
“New investments will be directed towards more efficient coal technologies, including underground coal gasification, and carbon capture and storage, to enable us to continue using our coal resources in an environmentally responsible way.
“The IRP 2019 continues to make provision for significant rollout of renewable energy and storage. Combined with storage, renewables offer an opportunity to produce distributed power closer to where demand is; and to provide off-grid electricity to far-flung areas of the country.”
