Gas would form a key part of South Africa’s future power generation mix, with the focus to fall on liquefied natural gas (LNG) in the short term and on shale gas in the long term, Standard Bank power and infrastructure head in South Africa Ntlai Mosiah said Monday.

“The implications for South Africa is that our gas power, which is written into the National Development Plan, is a key way forward and is likely to come from LNG in the short term. Going forward, there will also be shale gas,” he told delegates at the Power and Electricity World Africa conference, in Sandton.

Mosiah further indicated that neighbouring Mozambique’s marked gas potential also held implications for South Africa, “We will potentially have a ‘number ten’ gas-reserve neighbour, which is something we, as South Africa, need to exploit.”

He added that achieving grid parity with regard to renewable-energy technologies was possible, as conventional electricity tariffs were rising at a staggering rate.

Mosiah indicated that South Africa would, in future, have to source gas for power from Mozambique, as the country’s electricity demand was already exceeding supply. Mosiah expected South Africa to endure a tight electricity system for the next four years.

He further stated that various challenges were hampering infrastructure development in South Africa, which impacted on renewable-energy development.

Such hindering factors included high capital costs, lack of alignment between stakeholders in policy formulation and execution, underdeveloped capital markets, increasing environmental oversight and labour shortages, besides others.

RENEWABLE-ENERGY POTENTIAL

Meanwhile, renewable-energy asset developer Sky Solar would look to Africa, with a special focus on South Africa, to grow its business on a larger scale, CEO Amy Zang told delegates at the conference.

“Africa, led by South Africa, [is] a market with a high probability in which we can sell renewable-energy power at a grid parity rate, independent from a subsidy and feed-in tariff,” she told delegates.

Zang noted that photovoltaic (PV) power as a renewable and sustainable energy source was the best choice for Africa, as the continent had an immeasurable solar power resource and large availability of land suitable for the construction of PV power plants; however, a notable gap in the market was evident.

Sky Solar was currently bidding for 130 MW in the Department of Energy’s Renewable Energy Independent Power Producer Procurement Programme second bid-window, which had been delayed to the fourth week of April from the initial deadline of end March.

“In 2013, we are going to do 700 MW to 800 MW in solar projects, with 60% in overseas markets and 40% in China,” Zang pointed out.

She further noted that Sky Solar had established strategic partners in the rest of Africa who had been tasked with identifying opportunities to develop solar projects, which could range in size from 20 MW to 200 MW.