Time running out for a gas economy

Time is fast running out for SA to achieve its long-held aspiration to build a viable gas economy, the Independent Power Producers office warns.

Time is fast running out for SA to achieve its long-held aspiration to build a viable gas economy, the Independent Power Producers (IPP) Office warns.

The objective of the 2012 National Development Plan (NDP) “to build a game-changing gas economy is still current. It is still government policy,” said Sandra Coetzee, its acting head. “There is a huge opportunity, but time is of the essence. We have to get our ducks in a row.”

Coetzee’s comments at a seminar hosted by Nedbank and EE Publishers last week come ahead of the promulgation of SA’s new energy map, the Integrated Resource Plan (IRP).

The IPP Office assists in the implementation of the government’s independent power programmes, which are aligned with the IRP and range from green power to gas and coal.

In the draft document, gas to power is projected to contribute 16% of SA’s energy mix in 2030. Even if this is what is ultimately promulgated, the planning and policy environment is not fully in place. For one, the gas master utilisation plan is critical to outline where the gas will come from, and at what cost, but has yet to be completed.

Andy Calitz, former CEO of LNG Canada, said despite a decade of talk, no liquefied natural gas cargo has ever landed in SA. “Central planning of electricity is slow and leads to shortages,” he said.

Globeleq’s John Smelcer said SA faces a challenge when it comes to energy planning, not just because of a fundamental global transition away from fossil fuels but also due to a restructuring of the domestic market as Eskom struggles to stay afloat.

A co-ordinated effort is needed to build a viable gas economy in SA, Coetzee said. The potential for demand for gas goes beyond electricity and it is important that alternative uses for gas — as in businesses and homes — is better understood.

As the world shifts to renewable power it is a “no-brainer” that gas should play a transitional role in lieu of technological advancements that deal with the intermittency of wind and solar power, said Coetzee.

Smelcer said the transition from fossil fuels to a zero-carbon economy, especially in the African context, will take long.

Gas can also mitigate risk and it needs to be recognised for the role it can play in the case of supply shortages, Coetzee noted. She highlighted Eskom’s energy availability factor, at 65% in the year to date. Only at 71% is it considered to be adequate.

“There is huge opportunity in gas. It is critical we establish a gas economy. There are scenarios and routes, but the time is now,” said Smelcer.

16%

The contribution to SA’s energy mix that gas to power is projected to make in 2030.