South Africa in ‘dash for gas’ to boost struggling power sector

Tina Joemat-Pettersson told South Africa’s National Assembly (17-page / 300 KB PDF) that the “lack of timely coordination of our planning, alignment and implementation of our country’s energy programmes has created serious challenges for us”.

Joemat-Pettersson said issues surrounding the country’s power sector “compel us to add a significant amount of electricity generation to the grid in a very short time”.

Moves towards tendering for new gas-fired plants, with a combined electricity generating capacity of 3,126 megawatts (MW), began on 19 May when a formal ‘request for information’ was released to the market as part of the government’s ‘gas-to-power procurement programme’, Joemat-Pettersson said.

Private sector involvement in South Africa’s energy sector through the independent power producer (IPP) programme will also continue apace, with a further 17,000 MW of electricity generating capacity set to come on stream from renewables, coal, gas and co-generation “towards the end of 2022,” the minister said.

In addition, the procurement process for a new generation of nuclear power plants will begin in the second quarter of this financial year. The cabinet has already approved plans which provide for 9,600 MW of electricity to be generated through nuclear power, with the first of the new reactors to be commissioned by 2023.

Joemat-Pettersson said the contribution from the country’s growing fleet of renewables energy sources, such as wind and solar, “should grow to approximately 7,000 gigawatt hours per annum, with the first 47 renewable energy IPPs fully operational and producing at full capacity by mid-2016.”

“This programme has secured a commitment of about 170 billion rand (ZAR) ($14.4bn) in capital investment to the South African economy,” Joemat-Pettersson said. South Africans own an average of 48% in all IPPs, with black South Africans owning 28% of these projects.”

The Department of Energy has also recently amended its ‘small projects request for proposals’ (RfP) procedure “to provide for a simpler, less costly and less complex bidding process”, Joemat-Pettersson said. “Additionally, this will include stringent economic development criteria that will focus on the target bidders, being local black economic development compliant small and medium enterprise entities.”

Up to 95% of South Africa’s electricity is currently generated by coal-fired power stations and the country is among the world’s top 25 producers of greenhouse gases, according to government figures.

A study published earlier this year by the South African government-owned Council for Scientific and Industrial Research said renewable energy from South Africa’s first wind and solar plants generated a “net financial benefit” of around $702,000 for the country in 2014.

In March, the state-run utility Eskom said a three-month inquiry would be held into the running of the business after severe power shortages that had hit the country for more than a year continued. Eskom said the inquiry would consider the “poor performance” of electricity generating facilities, “delays in bringing new generating plants plant on-stream, high costs of primary energy (and) cash flow challenges”.