Photo by: Reuters
As South Africa looks to shale gas and nuclear, as well as expanded coal projects, as potential sources of energy for its constrained national grid, Energy Intensive User Group (EIUG) vice chairperson and Sasol GM for supply chain: strategic sourcing Piet van Staden indicated that the national energy mix should be weighted towards liquefied natural gas (LNG) as a practical alternative.
Speaking at the Gas Week conference, in Bryanston, on Tuesday, he explained that shale gas remained a “wild card” with many uncertainties, particularly that of the potential prices and economics, shading its future.
“There is a lot of uncertainty around shale gas and we [South Africa] should not bet the farm on it,” he stated.
Further, he raised concerns about the funding of the country’s nuclear programme, which comes with a “horrendous” upfront capital cost and might lead to a surplus in energy.
This comes as President Jacob Zuma outlined plans to fast-track the country’s 9 600 MW nuclear- and coal-powered energy ambitions to sustain energy security amid State-owned Eskom’s inability to meet demand.
“[Eskom] is standing very close to the wind and [it is likely that South Africa] will experience a system event in the future,” Van Staden stated, adding that there was a need to ensure short-term energy supply.
In his State of the Nation Address, delivered earlier this month, Zuma highlighted the country’s critical energy situation and pointed to the development of “Coal 3”, which Van Staden said caused further confusion, as it was expected that the next tranche of energy supply would emerge from the private sector and not a new Eskom build programme.
While LNG remained “on the table”, there were indications that it was not the number-one option, particularly against coal, owing to its high cost.
However, the imminent Gas Utilisation Master Plan (Gump) provided a framework for investment in gas-supporting infrastructure and outlined the role that gas could conceivably play in electricity output.
Engineering News previously quoted Department of Energy deputy director-general Ompi Aphane as saying government saw “massive upside potential” for gas, and not only in energy generation.
The Gump considered various supply options, including the importation of LNG from Mozambique, and would be aligned with the IRP and a Liquid Fuels Master Plan, which was still being drafted.
Meanwhile, Van Staden noted that, despite South Africa’s battle with short-term energy supply, there was a possibility of an oversupply in 15 years as the new-build plans and agreements came on line.