http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 18.14Change: -0.01
R/$ = 16.06Change: -0.04
Au 1191.41 $/ozChange: -4.04
Pt 929.00 $/ozChange: -7.50
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters About Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Aug 15, 2012

Development plan calls for more gas, warns on coal export restrictions

Back
Cape Town|Maputo|Port|Africa|Botswana|CoAL|Eskom|Exploration|Export|Gas|Industrial|Mining|Namibia|Nuclear|Petroleum|Power|rail|Renewable Energy|Renewable-Energy|Resources|SECURITY|Sustainable|System|Technology|transport|Turbines|Africa|South Africa|Coal-bed Methane Gas Opportunities|Contracting|Cycle Gas Turbines|Electricity|Electricity Generation|Electricity Needs|Electricity Production|Electricity Transmission Lines|Energy|Energy Industry|Energy Mix|Energy Services|Energy Sources|Large-scale Shale Gas Resources|Liquefied Natural Gas Infrastructure|Natural Gas|Natural Gas Resources|Products|Service|Services|Shale Gas|Shale Gas Resources|Underground Coal Gasification Technology|Kalahari|Walvis Bay|Environmental|Infrastructure|Jacob Zuma|Turbines|Underground Coal Gasification Technology
Port|Africa|Botswana|CoAL|Eskom|Exploration|Export|Gas|Industrial|Mining|Namibia|Nuclear|Petroleum|Power|rail|Renewable Energy|Renewable-Energy|Resources|SECURITY|Sustainable|System|Technology|transport|Turbines|Africa||Contracting|Energy|Products|Service|Services|||Environmental|Infrastructure|Turbines|
cape-town|maputo|port|africa-company|botswana|coal|eskom|exploration|export|gas|industrial|mining|namibia|nuclear|petroleum|power|rail|renewable-energy|renewable-energy-company|resources|security|sustainable|system|technology|transport|turbines-company|africa|south-africa|coal-bed-methane-gas-opportunities|contracting|cycle-gas-turbines|electricity|electricity-generation|electricity-needs|electricity-production|electricity-transmission-lines|energy|energy-industry|energy-mix|energy-services|energy-sources|large-scale-shale-gas-resources|liquefied-natural-gas-infrastructure|natural-gas|natural-gas-resources|products|service|services|shale-gas|shale-gas-resources|underground-coal-gasification-technology|kalahari|walvis-bay|environmental|infrastructure|jacob-zuma|turbines-person|underground-coal-gasification-technology-technology
Download PDF
National Development Pan 2030 executive summary (16.78 MB)
 
© Reuse this



South Africa’s National Development Plan 2030 calls for efforts to be made to substitute coal with gas in the country’s energy mix, including developing shale gas resources “provided the overall economic and environmental costs and benefits outweigh those associated with South Africa’s dependence on coal, or with the alternative of nuclear power”.

The plan also calls for the proposed growth in coal exports to be “balanced” with the need for domestic coal-supply security. But it warned against a ban on the export of low-grade coal, saying that it could disincentivise investments into multiproduct coal mines.

The 484-page document, which sets the elimination of poverty and the reduction of inequality by 2030 as its overarching goal, was delivered to President Jacob Zuma in Cape Town by Minister in The Presidency Responsible for the National Planning Commission Trevor Manuel.

It was drafted by 26 commissioners, who were drawn mostly from outside government and provides a broad strategic framework to guide future policy choices and actions.

Energy formed a major component of a chapter on ‘Economic Infrastructure’, which itself was one of the 15 chapters in the plan.

Economic growth and development, the plan noted, would require adequate investment in electricity and fuels infrastructure, which provided “reliable and efficient energy services at competitive rates”.

South Africa’s overreliance on coal for more than 90% of its electricity generation and one-third of its liquid fuels was flagged as a concern environmentally, and with regards to ensuring security of supply.

South Africa, therefore, needed to devise policies and plans that secured domestic coal supply; encouraged the exploration for gas as an alternative to coal; promoted a greater mix of energy sources, as well as a greater diversity of independent power producers (IPPs) in the energy industry; improved the municipal electricity-distribution service; accommodated the needs of the poor; and gave consideration to both the timing and/or desirability of nuclear power and a new liquid fuel refinery.

GOING FOR GAS, BUT COOL ON NUCLEAR

Offshore natural gas resources should be explored and developed and investment should begin in the development of liquefied natural gas infrastructure. In addition, regionally available natural gas could also be piped to South Africa, or used in regional power plants with electricity transmission lines to South Africa. South Africa should continue to progress coal-bed methane gas opportunities and develop underground coal gasification technology.

More controversially, the plan argues that South Africa should seek to confirm the existence of what are estimated to be large-scale shale gas resources. “Even if economically recoverable resources are much lower than currently estimated, shale gas as a transitional fuel has the potential to contribute a very large proportion of South Africa's electricity needs, the report noted.

“For example, exploitation of a 24-trillion-cubic-feet resource will power about 20 GW of combined cycle gas turbines, generating about 130 000 GWh of electricity per year over a 20-year period. This is more than half of current electricity production.”

Renewable energy and imports were also highlighted as key to the diversification of South Africa electricity mix, but the plan is cool on the introduction of nuclear noting that a potential nuclear fleet would involve a level of investment unprecedented in South Africa. “An in-depth investigation into the financial viability of nuclear energy is thus vital.”

COAL POLICY URGENT

But the document also reaffirmed that, coal would continue to be the dominant fuel in South Africa for the next 20 years and that a national coal policy was, thus, urgently needed to ensure a sustainable supply of domestic coal for power, synthetic fuels and industrial chemicals, while still expanding the growing coal export market.

“The coal industry's development has been constrained in recent years due to regulatory uncertainty in the mining sector, too little investment in new infrastructure and a failure to maintain existing infrastructure.”

It argued that the new policy should focus on changing the coal-mining landscape, foster greater collaboration, ensure security of domestic coal supply and promote exports and technologies that may provide for cleaner coal use.

The plan anticipated a migration of coal mining to the Waterberg, in Limpopo, from Mpumalanga and acknowledged the need for a new heavy-haul rail corridor to those coalfields in Limpopo. “Transport infrastructure for the central coal basin and the coal line to Richard's Bay also needs strengthening to match port export capacity of at least 91-million tons per year by 2020. Other possibilities include a link with Botswana coal deposits and a trans-Kalahari rail connection, linked to expanded port capacity at Walvis Bay in Namibia and/or a further rail loop around to Maputo.”

PRIVATE PARTICIPATION

Private-sector participation would be essential to relieve the rail infrastructure investment burden, encourage IPPs and incentivise the industry to optimise domestic coal use while maximising coal exports.

Government should also be cautious in applying policy measures which might have unintended consequences. “For example, banning exports of coal lower than, say 5 500 kcal/kg, could disincentivise investments in new multiproduct mines necessary for supplying future Eskom demand, but which also depend on export earnings for their financial viability. Most of the higher-grade coals in the central basin have been mined out and new mines have to deal with lower-quality resources,” the document noted.


It also called for an improvement in the quality of market competition and regulation in the energy sector, which it described as being “far from optimal”. The economy required increased competition in electricity generation; better regulation of price, supply and quality of electricity and petroleum products; an end to crippling transport constraints. There was also a need to raise electricity prices to cost-reflective levels.

“South Africa needs a clear policy that makes explicit the electricity market structure and how it will evolve over time. New build opportunities need to be clearly divided between Eskom and IPPs. It is also important to employ effective procurement processes that initiate timely, internationally competitive bidding for new capacity and negotiate robust contracts.”

Government and Eskom needed to quicken plans to establish an independent system and market operator, which would be tasked with procuring and contracting IPPs and, “preferably, managing transmission assets”.

“Remaining regulatory uncertainties that need to be resolved include the question of IPPs selling to customers other than Eskom, access to Eskom’s grid and rights to trade electricity,” the plan said.

DISTRIBUTION DILEMMA

Also highlighted was the fact that reliable electricity supply depended on a sufficient and reliable distribution grid. But little progress had been made to ensure that municipalities, which distribute about half of South Africa's electricity, were equipped to deal with a backlog which was currently estimated to be R35-billion.

The plan, therefore, proposed a material investment in human and physical capital in the 12 largest municipal distributors, which accounted for 80% of the electricity distributed by local government.

“This is a high-priority programme that needs to be driven at national level in collaboration with these municipalities. In addition, Eskom, or larger cities or towns, could take over electricity distribution functions on a voluntary basis from smaller, poorly performing municipalities. Medium-sized municipalities, performing reasonably, could continue with delivery.”
 

Edited by: Creamer Media Reporter
© Reuse this

To subscribe email subscriptions@creamermedia.co.za or click here
To advertise email advertising@creamermedia.co.za or click here
 
Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Electricity News
Trade and Industry Minister Dr Rob Davies
An extensive feasibility study of fuel cells has been launched in South Africa in a bid to make the most of South Africa’s vast platinum resources. If successful, Isondo Precious Metals (IPM) believes the manufacturing of fuel cell components could be up and running...
Telecommunications provider Vumatel has temporarily halted digging activity in Blairgowrie to secure cable locators that will assist the contractors in pinpointing the exact location of power utility City Power’s electricity cables. The area had been experiencing...
The Department of Cooperative Governance and Traditional Affairs (Cogta) in the Free State is confident there will be no electricity cuts in the province, despite municipalities owing Eskom R842-million. This after Eskom said if Free State municipalities did not...
Article contains comments
More
 
 
Latest News
While international companies are keen to invest in South Africa, they are unable to meet the conditions of employment that have been extended to non-parties, forming part of a myriad of reasons why the the Free Market Foundation (FMF) is challenging the current...
South Africa- and Botswana-based research institutions have teamed up to research dynamic spectrum access and the sharing of television (TV) band frequencies using a TV white space (TVWS) experimental network. South Africa’s Council for Scientific and Industrial...
Randgold CEO Mark Bristow
Mining companies owed it to their host countries and their shareholders to invest in the troughs so that they could reap the benefits in the peaks, Randgold Resources CEO Dr Mark Bristow said on Tuesday. Speaking during a panel discussion at the 2016 Investing in...
More
 
 
Recent Research Reports
Construction 2016: A review of South Africa's construction industry (PDF Report)
Creamer Media’s Construction 2016 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; key participants; local demand; geographic diversification; corporate activity; black economic...
Energy Roundup – February 2016 (PDF Report)
The February 2016 roundup covers activities across South Africa for December 2015 and January 2016 and includes details of a Government Gazette notice that confirms Cabinet’s decision to move ahead with the 9 600 MW nuclear procurement programme; State-owned power...
Energy Roundup - December 2015 (PDF Report)
The December 2015 roundup includes details of State-owned utility Eskom’s application to claw back R22.8-billion; South Africa’s ranking as an investment destination for renewable energy; and a nuclear expert’s thoughts on reactor designs for South Africa’s nuclear...
Water 2015: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2015 Report considers the aforementioned issues, not only in the South African context but also in the African and global context in terms of supply and demand, water stress and insecurity, and access to water and sanitation, besides others.
Input Sector Review: Pumps 2015 (PDF Report)
Creamer Media’s 2015 Input Sector Review on Pumps provides an overview of South Africa’s pumps industry with particular focus on pump manufacture and supply, aftermarket services, marketing strategies, local and export demand, imports, sector support, investment...
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
 
 
 
 
 
This Week's Magazine
Power and automation company ABB is in the launch phase of its highest payload, multipurpose industrial robot, the IRB 8700. The robot has a reach of 3.5 m and can handle a payload of up to 800 kg. “When designing the IRB 8700, we emphasised reach and payload, as...
Identity and Access Management (IAM) is a critical facet of a connected security ecosystem, as controlling the confidentiality, integrity and authorisation of data access and use is key to securing new digital business channels. However, companies face several...
RORY YOUNG Managed security services provide companies with a means to actively monitor their environment and ward against threats
Data underpins digital business models, the digital economy, the Internet of Things and the fundamental changes in the ways people interact and protecting data is crucial to securing new ways of doing business, says T-Systems South Africa information and...
The City of Cape Town will issue a tender for the procurement of electric buses for its MyCiTi service, in line with the council’s commitment to lower its carbon footprint, says executive mayor Patricia de Lille. The tender, to be advertised early in February, will...
The iSimangaliso Wetland Park Authority signed a R10-million contract last month with local tailings storage facility specialists Cyclone Engineering Projects to remove about 100 000 m3 of dredge spoil obstructing the natural course of the uMfolozi river, in...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $149 Close
Subscribe Now for $149