Gas Master Plan and the future

Gas has an important role to play in South Africa’s energy transition journey, says Prashaen Reddy, a partner at Kearney. Reddy is an expert on energy matters and his comments come amid the calls for public comments on a draft Gas Master Plan. The plan was released for comment at the end of April.

Prashaen Reddy, a partner at Kearney. Supplied by Kearney

Reddy says the southern Africa region has recently been fortunate with several gas finds (Mozambique, South Africa and Namibia) that allow for the development of indigenous resources to drive industrialisation, social development and economic growth.

Today, the industry employs at least 70 000 people and contributes between R300-billion and R500-billion a year to South Africa’s GDP based on the existing indigenous gas supply.

“Additionally, to maintain and grow the industrial base there are few substitutes readily and economically available for gas in the energy-intensive industries, and hence industrialisation may further decline should no gas solution be found in the years ahead,” says Reddy.

Gas to power is another critical enabler to stabilising the power sector as we balance our energy mix from being primarily driven by coal to other technologies as outlined in the recent IRP.

“Our research on balancing energy security with sustainability explores how natural gas is playing a pivotal role in the global energy transition. To support the transition to a cleaner energy mix, there is a need for intermittent reliance on cleaner hydrocarbons (such as natural gas) for energy security, until such time that renewable/nuclear capacity (or other baseload technologies) can be built up and installed,” he says.

Notably, natural gas is the cleanest and most emission-friendly fossil fuel, also suitable for peak generation shaving and baseload provision. Additionally, it is a good enabling partner for more variable renewable energy sources due to higher operational flexibility and lower capital costs.

Conversely, natural gas still produces GHG emissions and is limited by inadequate gas infrastructure.

This highlights the need to abate GHG emissions from natural gas production and usage which can be done through carbon capture, utilisation, and storage (CCUS). To address the lack of critical gas infrastructure, significant international and regional financial investments are required.

Financiers will find it difficult to be clear cut on defunding hydrocarbon projects due to the commercial viability, markets and returns the sector still generates in the medium term. The world will be unable to simply switch off hydrocarbons which still make up over 80% of the world’s energy mix.

“Gas will play an important role as a transitionary hydrocarbon, offering security and a reduced environmental impact until renewable and nuclear capacity can be added,” says Reddy.

Source: Supplied by Kearney