Will Mozambique gas be SA’s saviour?

natural gas flame

This source of electricity is cheaper and cleaner than coal, it would complement the use of renewable energy, such as solar, and would draw investors to South Africa’s shores

It has emerged that gas could be a possible game-changer for investors as it holds great potential for the future of the economy in South Africa.

Globally, 20% of electricity is generated by gas, but in South Africa its use is minuscule.

However, investors, such as Siemens, believe that with gas from Mozambique easily accessible, the form of energy could provide the base load answers South Africa is looking for, especially to complement its successful Independent Power Producer Procurement Programme.

In recent months, government and Eskom have been quite vocal about the shortcomings regarding renewable energy when it comes to providing base load power.

Eskom’s group executive head of transmission, Thava Govender, said solar photovoltaics faded at 5pm, just as South Africa needed peak power for the evening.

“We need more flexible power generation,” he said at the Power-Gen and DistribuTech Africa conference in Johannesburg last week.

Siemens’ head of gas for Africa, Andreas Pistauer, believed that this was where gas might be able to step in and complement renewables.

He told City Press that gas and renewables made the perfect couple.

“Gas can be a huge benefit to South Africa,” he said. “Renewable power generation works well during the day, but not at night. You need some flexible power, and gas can be the answer.”

He believed that South Africa was on the right track with its gas-to-power programme, which is expected to launch next year.

While a coal-fired power plant required several hours and copious amounts of energy to start up, a gas power plant could take only 25 minutes to move to full load capacity, Pistauer said.

“It complements renewables, there is something available fast,” he said. “It fills the empty power valleys at night, when renewables are not producing.”

Pistauer said South Africa’s renewable power procurement programme had shown what could be achieved in South Africa, and had given gas investors the confidence to flock to South Africa’s shores. But the ball was in South Africa’s court to make that investment happen.

Government has also undertaken to procure 3 126 megawatts of gas-fired power generation capacity, eyeing the abundant natural gas field in neighbouring Mozambique as the supplier.

In addition, the energy department announced a new 600MW gas-fired power generation project, which will be developed as a public-private partnership. The additional capacity is broadly viewed as an incubator to get local companies involved in the power procurement programme.

Energy department spokesperson Maropeng Ramokgobathi told City Press the gas-to-power project was on track. He said the preliminary information memorandum would be released soon. The request for qualification would go out in September, and a request for proposals would go out in March.

Silas Zimu, special energy adviser to President Jacob Zuma, said there was a process that needed to be followed for the gas programme to go ahead.

“The expression of interest only closed last month,” he said. “We requested prices, so that we could learn what the market can give us.”

Pistauer said new coal power stations, such as Medupi and Kusile, cost about $2 500 (R35 600) per kilowatt and gas power stations cost only $750 per kilowatt.

“That is relatively cheap,” he said.

Estimates by the energy department show that private sector investment in the gas-to-power programme could be as high as R64 billion over the next four to five years.

Natural gas is a far more environmentally friendly fuel than coal, and also much cheaper than oil. New combined cycle gas turbine power stations produce less than half the carbon emissions of new coal plants and 30% less CO2 emissions than the diesel or petrol equivalent, helping South Africa bring down its emissions.

Pistauer said a new power station built in Düsseldorf, Germany, recently broke three world records as the most efficient and environmentally friendly gas-fired power plant in the world.

The state-of-the-art facility, which began operating this year, burns natural gas with an overall efficiency rate of 85%.

Alap Shah, vice-president and technology manager at global engineering firm Black & Veatch, said it took between three and five years to get a plant up and running. Like Siemens, Black & Veatch also has its eye on South Africa’s gas-to-power independent producer projects.

But the programme does not have a clear road ahead. There are concerns about whether Eskom would be able to buy the power generated from the new independent producer projects, as well as whether transmission infrastructure can keep up with the new players.

Source: City Press