Page 29 - Energize April 2021

VIEWS AND OPINION

Chris Yelland: How does the leasing of 1220 MW of imported emissions. Insofar as the energy sector is concerned, South Africa
gas-to-power capacity from Karpowership, and the imported had adopted a peak-plateau-decline commitment.
LNG required to operate this at a capacity factor of about 60 Emissions will peak as we complete Medupi and Kusile,
to 70% for 20 years, align with a just energy transition towards plateau for a while, and then decline from about 2025 as we
a low carbon future, that contributes to local industrialisation, decommission some of the old coal-fired power plants and
manufacturing, localisation, jobs, skills development, reskilling replace them with cleaner energy forms. There will, of course,
and social development of workers, their families and their still be emissions, but we’re going to curb them, and cannot
communities in the depressed coal mining areas of Mpumalanga necessarily eliminate them.
and Kwa-Zulu Natal? Even as we include gas-to-power going forward, as well as
the much-criticised 1500 MW of new coal-fired power in terms
With the introduction of renewables and battery energy of the IRP, our projections show that emissions will remain well
storage, which are not necessarily the cheapest options, we below the peak-plateau-decline commitments South Africa has
still need to balance the system, and gas comes up as one of made in terms of the Paris Agreement.
the cheaper options. The gas-to-power we are now procuring in terms of the
Once we have FSRUs at the ports, we will have the RMIPPP programme will displace coal-fired power that is not
opportunity to bring in LNG, and we can then start an engagement necessarily being decommissioned right now. So, emissions
on how we can utilise these facilities, and the gas, in other sectors will reduce as less coal is burned, because the burning of gas is
of the economy. So, I think this is a good start, with infrastructure cleaner and has lower emissions than that of coal.
that can be used as a stepping-stone for the country. So, it’s not correct that this is tying the hands of the Minister
There is talk of running out of gas through the existing pipeline of Environment, Forestry and Fisheries. In the longer term, it is
from Mozambique. Perhaps this new infrastructure could be used facilitating higher penetration of renewables into the grid, and the
to feed gas into the pipeline. This was not part of the bid, but it’s replacement of the coal-fired power that is creating much of the
something that can be looked at, should the need arise. problems in respect of emissions.
The new gas supply infrastructure also opens discussions on
the possibility of repurposing old Eskom coal-fired power stations Chris Yelland: Why are preferred bidders, using solar PV
to operate on gas, in the areas where there are concerns about technologies, required to buy locally-made solar PV panels,
the decommissioning of the old coal-fired power plants. which may not available from local manufacturers in the
From a maintenance perspective, there is also a commitment quantities required by the market, and may come at a substantial
from Karpowership that all the maintenance will be done in South price premium, while for the Karpowership projects, the ships,
Africa, meaning that there will be local job opportunities created gas engines, floating fuel storage and regasification units
during operation. (FSRUs) and the liquified natural gas (LNG) fuel (which in itself
We also need to compare apples with apples. If we move accounts for about 60% to 70% of the total cost) is allowed to be
back a few years, when we started with renewables, there was no fully imported?
local manufacturing industry to speak of.
If we are about to start a gas industry in South Africa, we must Remember that there are designated components, and there are
appreciate that we’re not going to manufacture everything locally components that are not designated. The DTIC looks at what is
from day one. We’re going to have to start from scratch, and available from the local market and what South Africa is capable
initially obviously rely on international suppliers. of manufacturing locally, and then designates certain products
Similarly, on the fuel side: yes, we currently don’t have gas in and components for local manufacture. Both solar PV panels and
South Africa. But there are explorations that are happening, and ships are designated for local manufacture.
there are findings. It is likely that, in the future, the gas for these However, the powerships and FSRUs have subsequently been
powerships will come from local fields. granted exemption from such designation for local manufacture
When local gas becomes available, I can see a situation where by the DTIC, which has since concluded that these ships cannot
this local gas will become the cheapest option, because it will be manufactured here. However, when it comes to solar PV
be sourced closest to where it will be required and used. So, we panels, the DTIC has looked at the South African industry and
should not look at this with a static frame, but in a broader sense. decided that it is possible to manufacture these locally.
Now, you are suggesting that the local solar PV panel
Chris Yelland: How does the procurement of energy from 1220 manufacturing industry may not have sufficient capacity to deliver
MW of gas-to-power from Karpowership, operating at a capacity the required volumes. However, based on the bids received, we
factor of about 60 to 70% for 20 years, align with South Africa’s do not believe this to be the case. Everyone who submitted a
climate change commitments in terms of the Paris Agreement, bid confirmed that they would be able to source solar PV panels
and South Africa’s nationally determined contribution in respect of locally, and remember, not everyone who submitted a bid was
carbon emissions? Is the DMRE tying the hands of the Minister of selected as a preferred bidder.
Environment, Forestry and Fisheries at COP 26, and prejudicing Obviously, if successful bidders are not able to source certain
other carbon emitting industries in South Africa? designated products or components locally, they can, of course,
approach the DTIC and the IPP Office, and we can then deal with
South Africa is a signatory to the Paris Agreement, and has this together. But we believe there is sufficient local manufacturing
submitted its national contributions to the reduction of carbon capacity for solar PV panels.

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