DAVE COLLINSThe availability of gas remains a problem for South Africa, which has been depending on indigenous coal reserves for energy security
Increasing the role of gas may be one answer to a low-carbon economy, but it could also undermine support for renewable energy, Mac Consulting principal consultant Dave Collins has argued.
He explains that, for the last decade, the gradual rise of renewable energy had relied on the widespread belief that the fossil fuel price would rise considerably with diminishing coal reserves. This assumption used to bode well for the uptake of renewable energy, despite it being an expensive resource.
However, Mac Consulting associate director Tjaart Coetzee says, in the US, gas is starting to compete with coal as the country’s leading source of electrical energy.
This year, coal and gas contributed equally to the US electricity mix, a shift that had been caused by the abundance of shale gas, which is changing the landscape for the global gas market.
“The US is already importing less gas and could soon become an exporter,” Coetzee notes, adding that the displacement of coal by cheap gas in the US power-generation market had resulted in lower-priced coal exports to Europe.
“This has also had implications for the renewable-energy industry, which has relied on predictions of ever-rising fossil fuel prices,” he added.
Leakage Concerns
Gas has been identified as a potential ‘game changer’ for the South African energy market because of its lower carbon emissions when compared with those of oil and coal.
WWF South Africa climate change programme manager Richard Worthington warns, however, that it might not be as carbon friendly when one considers the commodity’s entire supply chain.
“Gas is particularly vulnerable in terms of fugitive emissions during extraction and transport,” he said, attending the business breakfast in his individual capacity.
Citing the International Energy Agency’s (IEA’s) special report, titled ‘Are we entering the golden age of gas?’, which was published in 2011, Worthington highlighted the IEA’s warning that an industrial shift from coal to natural gas would, in fact, do almost nothing to ensure a safer climate, owing to the global gas leakage rate.
Based on the Intergovernmental Panel on Climate Change’s latest assessment report, the global average methane leakage rate is estimated to be 2.8% a year, while statistics from the US Environmental Protection Agency indicate that it could be as high as 3.2% a year.
Worthington explained that a methane rate of 2.8% already cancelled out the benefits of gas when compared with coal, which meant that the claims made in favour of gas as being carbon friendly were based on the premises that the gas industry would run itself impeccably and that no leakages would occur.
“However, the leakage estimates in certain parts of the market are actually above that rate. Therefore, the assumption of gas being a low-carbon energy option rests on several assumptions, including tight operational procedures. Without these assumptions, gas has no advantage,” he said.
Worthington concedes that other coal alternatives, namely nuclear and renewable energy, also produce significant carbon footprints when the entire value chain was taken into account and that more research should be done to determine which technology has the least impact, from cradle to grave.
Hybrid energy is also an option, since gas is more flexible than coal and could be used to complement the variability of renewable energy.
“You’re basically getting a more reliable electricity supply from a plant running primarily on solar energy, which taps into gas reserves that could meet an evening peak, for which a company might earn a premium.”
Worthington concludes in favour of increasing the role of gas in South Africa’s energy mix, as long as it directed investment away from coal and did not inhibit renew- able-energy growth.
He argues that gas would be “particularly appropriate” for heating and cooking, especially in terms of addressing electricity accessibility issues in the short term.
Development Constraints
The availability of gas, however, remains a problem for South Africa, which has been depending on indigenous coal reserves for energy security.
Collins lists globally traded liquefied natural gas, proven reserves in neighbouring countries, offshore gas finds and coal-bed methane reserves, in South Africa and Botswana, as potential sources of gas, but highlighted the need for infrastructure development in the form of import and regasification terminals, pipelines and electricity grids.
He further explains that South Africa has a choice between developing one type of gas infrastructure for power generation and developing another more complex form of infrastructure for electricity generation, industrial use and transport, as well as for domestic heating and cooking requirements.
The former would require less infra- structure, but would yield a 60% recovery of the gas used, while the latter would yield a 100% gas recovery, but would require more complex infrastructure.
“There needs to be an integrated, countrywide approach on gas infrastructure. We need to make a choice to determine which level of infrastructure we want to pursue,” Collins concludes.