Gas will help get right balance in energy mix, says government

The Department of Energy (DoE) says it is committed to finding the right balance between different sources of energy with liquefied natural gas (LNG)-to-power a vital part of the mix.  

DoE director-general Thabane Zulu told the South Africa: Gas Options conference that while gas and renewables would compete for a share of energy supply, they would not be in direct competition with each other.

“We need to create space for different forms of energy.”

The government envisages introducing a variety of sources of natural gas which could be economically viable within a 25-year planning horizon to 2040. Sources could include extensive expansion in natural gas from shale gas, production from deep-water offshore fields and the development of a regional natural gas pipeline network.

Zulu told delegates that the independent power producer (IPP) procurement programme had been a boon for South Africa and recently helped the country avoid a ratings downgrade through attracting investment.

“The gas-to-power programme is based on similar principles to the IPP Renewables Programme, with transparency, competitive bidding processes and localisation requirements.”

Zulu said the gas-to-power programme was designed to provide imported LNG to trigger upstream development and reinvigorate the economy. It is expected to build demand in the South African economy in the short to medium term.

The DoE this week issued its preliminary information memorandum for the gas-to-power initiative, prompting interest from various potential investors.

Excelerate Energy senior development director Gonzalo Ramirez spoke of the benefits of floating, storage and regasification units (FSRUs), explaining that these would work very effectively in the Coega and Richard’s Bay ports with the vessel docked at the port and having direct access to the land.

“The FSRU will not only supply the energy on board, but inject gas into the pipeline. It will also have the capability of offloading LNG as liquid.”

A customised vessel could be specially built or converted for South African use.

Monetizing Gas chief strategy officer Ebrahim Takolia said there were good prospects for gas.

“The opportunities will also come from the value chain. In South Africa, because we had very cheap electricity from coal, industrial processes that would have been done by gas were converted to electricity. We might see some of that switching back.”

He said the prospect of carbon taxes in South Africa could also influence investors to go for gas, as it produced less carbon than some other forms of energy.

Matola Gas CEO Bruno Morgado said regional cooperation in Africa was needed to try to make the most of untapped reserves, such as in the Rovuma basin off the east coast of Africa.

“We have one of the biggest reservoirs of gas in the world, but it’s in the deep sea. It’s like trying to explore 5 000 ha for agriculture in the Sahara desert. If we don’t have enough capacity in our leaders to work together, I don’t think we will succeed in exploiting our natural resources to our benefit.”