Natural gas must play a major role in South Africa’s future energy mix, according to a new report from Econometrix.
“Gas is necessary for South Africa to meet its target growth rates and political, economic and social objectives,” said Econometrix MD Rob Jeffrey. “There should be a national plan to substantially increase the use of gas.”
The report comes a day before industry leaders receive clarity by the department of energy on its Independent Power Producer (IPP) programme to deliver 3,1GW of gas-fired power generation.
Stakeholders will meet in Cape Town this week at the SA Gas Options meeting, where they will engage with energy minister Tina Joemat-Pettersson and Eskom CEO Brian Molefe.
Jeffrey said creating a natural gas sector would unlock billions of rands of investment, while stimulating new industries and skilled job creation.
Combined with the right policies, an additional 8,6GW of electricity from gas could see gross domestic product grow by R645bn, with the creation of up to 1,7m jobs, the report showed.
Gas is the cheapest alternative to coal and nuclear, offering security of supply at competitive prices, Econometrix said. It would supply reliable power for peak demand periods or when renewables are not generating electricity, and adds to the essential reserve capacity.
It was technically and commercially feasible to rapidly start gas-fuelled power generation at Coega in the Eastern Cape, and Saldanha Bay or Mossel Bay in the Western Cape. Other potential locations are Richards Bay in KwaZulu-Natal, and Sishen in the Northern Cape. Mbombela in Mpumalanga has potential to be supplied by pipeline from Mozambique, the report showed.
“For each location, developing a natural gas industry with R15bn annual turnover could see downstream annual turnover up to R50bn, with R26bn total added economic value.
“Average upstream and downstream potential employment created could peak at 70 000 during the mature phase of the project’s life,” Econometrix said.
Other significant economic benefits include R2bn savings from diesel imports, increased tax revenue, and curtailment of future electricity price increases — all with a positive impact on the fiscus, it said.
“Gas must play an important role in the energy mix going forward if South Africa is to meet its economic, political and social objectives of reducing poverty, reducing inequality and raising the standard of living of all its citizens,” Jeffrey said. — Fin24