/ 3 July 2023

Calls for exploration of natural gas in revised integrated resource plan

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On the list: Gwede Mantashe

As the department of mineral resources and energy (DMRE) is racing against time to complete the much delayed update on the Integrated Resource Plan (IRP) and release it for public comment, there are calls for natural gas to be given a larger percentage of the country’s energy mix.

Craig Morkel, chairman of South Africa Oil and Gas Association said at a roundtable meeting that the government is working towards putting in place a gas master plan following increasing calls from energy leaders, the Russian ambassador and various government departments for more gas exploration projects.

He highlighted that the department of mineral resources and energy sees gas fitting into the broader IRP.

The Local Business Committee in Nelson Mandela Bay, Eastern Cape, also called for the department to maximise opportunities within the municipality’s oil and gas sector to boost the economy and address energy market challenges.

The department told the Mail & Guardian that after the new discovery of natural gas in the country, there has been a renewed interest for more natural gas to be included in the new IRP.

The discovery was made by TotalEnergies in the Outeniqua basin, also known as the Brulpadda and Luiperd in the Namibian Offshores in 2020. 

The department estimates that South Africa’s oil and gas resources are measured at 27 billion barrels and 60 trillion cubic feet respectively, and have the potential to unlock approximately $10-20 trillion in government revenue by 2050, while at the same time ensuring economic expansion and driving the country’s net-zero initiatives.

But there is opposition to gas from civil society groups and the Presidential Climate Commission (PCC). 

Delayed IRP

The IRP is an electricity infrastructure plan which shows the country’s long-term electricity demand, how this demand will be supplied, and what it will cost.

Responding to questions, the department said it intends to present the draft of the IRP to the cabinet in the second quarter, between July to September.

“Once the cabinet approves the revised IRP, the normal public policy development process entails consultations with the mining and energy sector, interested and affected parties and South Africans at large. It is anticipated that the final revised IRP will be approved and gazetted for implementation during the course of the 2023/24 financial year,” it said.

Last month, Mantashe told parliament that the updated IRP document was in the works and will soon be released for comment. This is after it was delayed for two months after its original due date in March.

“Regarding the IRP update, the rough IRP framework has been completed — it is going to be opened for discussion. We are late, we [initially] said the end of March. It is going to happen now. We’re pushing very hard on it,” he said.

When the first IRP was promulgated in 2011, it was intended to be a living plan that would be updated every two years to reflect the dynamic changes in the energy landscape. It has however been unchanged for the past four years.

Previous IRP

In the 2019 IRP, the plan was to install 1 000 megawatts  of new gas to power by 2023 and 2 000 megawatts will be installed by 2027.

Eskom has no gas-to-power projects. It is waiting for the approval of the three Karpowership South Africa bids, and imported gas from Mozambique. Last week, the M&G reported that the energy department is in the process of starting a 3 000 megawatts plant in Richards Bay, Kwa-Zulu Natal. This is despite the PCC recommending that the next edition of the IRP under review, cater for the building of between 50 gigawatts and 60 gigawatts of variable renewable energy by 2030.

In its report, the PCC recommended that only 3–5GW of gas-fired plants should be built and they should only be used at times of peak demand.

The PCC argued that South Africa is the world’s 14th-biggest emitter of climate-warming gases, a large proportion of which are generated from burning fossil fuels and that gas would contribute to those emissions building up.

“There should be no new coal and gas should be kept to the role of peaking support,” it said in its report. This means that gas should only be used in a supporting way when renewables go down. 

The report added that the IRP should also include details on how the national grid will be strengthened and where, it said. 

NJ Ayuk, chair of the African Energy Chamber at a roundtable event last month hosted by African Energy Chamber (AEC) and Russian-based global energy giant Gazprom, said load-shedding could be overcome with natural gas.

“It is unacceptable that Africa’s most industrialised nation, South Africa, is going eight to 10 hours a day without electricity when abundant natural gas exists around the country. We need to unleash potential and open up [gas resources],” he said.

He added that with this gas, struggling coal-fired power plants like the Gourikwa and Dedisa stations could be converted to run on baseload gas, meaning South Africans would have a clean, reliable source of electricity.

Echoing Ayuk’s sentiments, Russian ambassador Ilya Rogachev implored South Africa to take advantage of natural gas as a transitional fuel. He said South Africa’s electricity supply crisis, which has resulted in severe load-shedding, presents an opportunity for Russian energy companies like Gazprom to share technological and financial solutions.

He added that the country’s energy sector is a very promising one, especially [given] constraints with electricity supply that South Africa has been experiencing.

“Russian companies should look at it as an opportunity to offer to their South African counterparts their well-developed technological solutions under a variety of financial plans.”

He added that  Gazprom has also identified where demand will be located and how this can be serviced by liquefied natural gas as well as the gas-to-power demand.

Morkel urged Gazprom to address how the countries could work together.

“We can go to our government, we will take that message to them. Our members could work with you upstream, midstream and downstream — we are looking forward to working with Gazprom,” he said

Mandisa Nyathi is a climate reporting fellow, funded by the Open Society Foundation for South Africa.