natural gas
Featured image: Stock

On Tuesday, South African energy minister, Mmamoloko Kubayi, addressed delegates at a gas-focused conference in Cape Town where she highlighted her next steps pertaining to the national gas programme.

The Minister explained that the National Development Plan (NDP) of 2011 sets out a vision for the energy sector of South Africa in 2030.  Under the heading of key policy issues and planning priorities, the issues relevant to gas include:

  • Explore gas as a viable alternative and complement to coal as well as renewable energy;
  • Diversify power sources and ownership in the electricity sector;
  • Balance supply security, affordability and climate change mitigation aspirations in the power sector; and
  • Leverage cross-sector synergies for integrated energy planning

We [the Department of Energy] are working towards a vision of an industrialised, globally competitive South African economy, characterised by inclusive growth and meaningful participation by previously disadvantaged members of our society, decent employment and equity, and built on the full potential of all citizens.

From a legislative perspective, the Energy Act of 2008 and sector specific legislation are well developed in relation to electricity, petroleum and gas. The Electricity Regulation Act of 2006 and the National Energy Regulator Act of 2004 provide the regulatory framework for electricity.

Insofar as petroleum, the Petroleum Pipelines Act and the Petroleum Products Act cover that sector. It is nonetheless the gas sector that is under focus this week at this conference.

Electricity intensive industry decline

The decline in production output for electricity intensive sectors such as the iron and steel, metals and machinery production sector has seen a major contraction of about 16% since 2008, while overall manufacturing output levels have declined by around 4% over this period. For context, this group is part of the 25% of Eskom-generated electricity consumed in the national economy.

The preliminary outcomes of updated planning scenarios point to South Africa requiring installed generation capacity with high load factor, or base load, provided by a mix of technologies such as coal, regional hydro, nuclear and gas of around 45 to 55GW for the next 30 to 40 years, while renewable power and gas-to-power could be applied to service the non-base load requirements.

Natural gas is capable of providing more than just electrical power, and in our assessment it can also provide direct heat and chemical feedstock for industrial processes, commercial and residential cooking and heating applications as well as an alternative fuel source for transportation purposes.

Depending on the economics, water desalination capability from natural gas-to-power projects at coastal locations is also possible.

Our gas strategy and vision must be viewed within the context of a wider government strategy to grow the economy and we have adopted the 9 Point Plan in that regard, which I don’t have enough time to outline today, save to mention that the resolution of our energy challenge is one of the points in the 9 Point Plan and that we have prioritized the following interventions:

  • Solar water heater rollout;
  • Municipal energy efficiency and demand side management
  • Energy efficiency in public buildings
  • Updating our energy planning through the IEP and IRP
  • Increase generation capacity through independent power producers
  • Gas infrastructure development

In order to meet our energy challenge, the availability of natural gas as reliable combustible fuel and as an enabling source of electricity power supply to the South African economy will produce direct and indirect benefits for the South African economy as a whole, thus contributing to macro-economic stability and economic growth. Read more…

Gas infrastructure development

Over the past few months we have indicated our indication to launch gas infrastructure development though the section 34 determination under the Electricity Regulation Act, in pursuit of an initial 3,700MW of power plants.

We also issued a preliminary information memorandum regarding the programme. As the Minister of Energy, I wish to reiterate my support for this programme and to assure you that we intend to proceed with the vision and policy objectives that we have outlined.

Kubayi concluded that on Friday 19 May 2017, the department will be deliberating over her budget – noting that with the budget vote debate in mind, more information would be revealed by Friday.

Energy month

The Minister highlighted that May has been designated as Energy Month – adding that her department intends to use this month and industry-related platforms to build heightened awareness about the energy sector.

Kubayi added that this month will be used to focus South Africans on matters related to energy, be it improving energy access, reducing energy costs, energy efficiency, security of supply, public discourse and engagement on topical energy issues, mainstreaming women and youth participation, investment opportunities in the energy sector, and so forth.

 

Featured image: Natural gas plant_University of Ontario