Energy is essential to quality of life for billions of people. It lights, heats and cools homes and businesses. It transports and connects people, goods and services. It goes hand-in-hand with economic activity, enabling opportunities for a growing population seeking to improve its quality of life. It is central to economic development.
South Africa is experiencing an unprecedented electricity crisis. We need more reliability in our power supply, which must be cleaner. In order for our country to emerge from the current economic depression we need root and branch transformation of South Africa’s power systems, and a cleaner energy mix. All efforts need to focus on moving us forward to address climate change and lower our emissions in line with the Paris Agreement.
At Shell, we strongly support the goals of the Paris Agreement, to limit the rise in the average global temperature well below 2° Celsius. A key part of our strategy is to thrive during the “energy transition,” and we see natural gas playing an important role during the transition to a lower carbon world.
The advantages of including natural gas in South Africa’s energy mix
Gas has a unique advantage in that it can be used in all sectors of the economy — power, transport, industry and the built environment. It is a solution for our customers in difficult-to-decarbonise sectors such as construction, and the iron and steel industries. Switching to gas from coal in power generation can help to reduce greenhouse gas (GHG) emissions and improve air quality.
South Africa’s geographic location lends itself to a successful transition to an energy mix that favours renewables, such as sun and wind. By diversifying its energy mix and including natural gas as a reliable foundation partner with renewables, South Africans can enjoy significant benefits to the national economy. Reliable energy can be provided to customers along with the environmental advantages that gas offers over coal and fuel-powered energy generation.
Time to adjust South Africa’s energy mix
South Africa’s 2019 Integrated Resource Plan has laid out plans for a long-term diversification of the power mix by 2030, to reduce the energy sector’s carbon footprint while addressing current and future demand and ensuring a socio-economic just transition. Renewables’ contribution, in the form of wind and solar, has grown from 2.5% to 6.2% of the electricity mix over the past five years. This contribution, however, is still notably below the global average of 9.4% and must be increased.
The country has abundant potential for renewable energy, but these systems will likely only come online in the next few years, so there is an urgent need for an energy source that can answer South Africa’s immediate needs. This source also needs to be available and reliable over the longer-term, for use when conditions are not ideal for wind and solar power generation. Gas-to-power is a solution that can be more quickly implemented, and while not totally devoid of emissions, cuts the CO2 emissions produced by coal generation in half.
Decarbonising South Africa’s electricity grid is a massive challenge, but the risk we face in not moving away from coal and not diversifying our energy mix is greater. One of the big challenges will be in ensuring there is a “just transition” to a new, cleaner energy mix.
Shell has an unwavering commitment to social and economic development in South Africa, and will continue to contribute to the positive transformation of the country’s energy mix.