natural gas rights

South African financial services group, Standard Bank, has said that it will continue to invest in the country’s diverse and innovative energy procurement programme.

The financial institution has already invested in 14 renewable energy projects including nine solar photovoltaic (PV) and five onshore wind projects across the country, which all supply the national electricity grid with power.

Speaking to Engineering News, the Bank has confirmed its interest in supporting the financial round of the gas-to-power (GTP) programme, adding that it is anticipating the much awaited project information memorandum, where government’s procurement strategy will be outlined.

Standard Bank supports gas to power

Standard Bank head of power, Rentia van Tonder, told Engineering News that she anticipates the GTP programme to generate a lot of funding prospective especially with government’s Independent Power Producer (IPP) Office driving a ‘bundled’ offer that integrates the infrastructure required to import gas, including a floating storage regasification unit, and the power generation projects.

Van Tonder said: “Obviously much will depend on the project information memorandum, but as a bank we’ve done a lot of work to identify the potential power and gas participants and we are excited about the prospect of participating.”

Due to the size and nature of the programme, van Tonder believes that all competing financial institutions in the country will show their interest.

According to the IPP Office, under the Minister’s new determinations, 3,126MW of baseload and/or mid-merit energy generation capacity will be procured from both local and imported gas-to-power projects.

As a single buyer of power generation, Eskom will be the sole buyer of electrical capacity and energy generated under the GTP Programme, the IPP Office said in a statement.

Competitive pricing

Media reported that the associated REIPPPP costs have seen a significant drop since the first bid window and van Tonder said that “the pricing has become very competitive.”

Van Tonder added: “Alternative off-grid solutions could complement conventional grid systems in getting power to the largest number of people quickly. We are developing a strategy that will seek to unlock that opportunity.”

Revision of the Gas Utilisation Master Plan (GUMP)

Speaking at a conference last year, energy minister Tina Joemat-Pettersson said that the Department of Energy’s IRP 2013 policy did not take all fuel sources, such as gas, into consideration. The minister stated that she will amend and produce an “IRP by the second quarter of 2016, where gas plays a huge and significant role.”

Joemat-Pettersson added that: “The efficiency of gas been discussed with Angola, Mozambique in particular, Namibia and South Africa.”

The minister listed the work that the DoE is doing with the gas industry to develop and grow the market as follows:

  • Facilitating investment in the gas industry
  • Ensuring the safe, efficient, economic and environmentally responsible transmission, distribution, storage, liquefaction and re-gasification of gas
  • Promoting companies in the gas industry that are owned or controlled by historically disadvantaged South Africans by means of license conditions so as to enable them to become competitive
  • Promoting skills development among employees in the gas industry
  • Promoting the development of competitive markets for gas and gas services
  • Promoting access to gas in an affordable and safe manner