Gas has an important role to play in South Africa’s energy transition journey, Kearney partner Prashaen Reddy says amid calls for public comments on a draft Gas Master Plan, which was released for comment at the end of April.
He notes that the Southern Africa region has had several recent gas finds across Mozambique, South Africa and Namibia, that allow for the development of indigenous resources to drive industrialisation, social development and economic growth.
Currently, 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; hence, industrialisation may further decline should no gas solution be found in the years ahead,” Reddy warns.
He says gas to power is another critical enabler to stabilising the power sector as South Africa endeavours to balance its energy mix from being primarily driven by coal to other technologies as outlined in the recent draft Integrated Resource Plan 2023.
“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.
Reddy posits that natural gas is the cleanest and most emission-friendly fossil fuel that is also suitable for peak generation shaving and baseload provision. He adds that it is also a good enabling partner for more variable renewable-energy sources owing to higher operational flexibility and lower capital costs.
However, natural gas still produces greenhouse-gas (GHG) emissions and is limited by inadequate gas infrastructure.
Reddy says this highlights the need to abate GHG emissions from natural gas production and use, which can be achieved through carbon capture, use and storage.
To address the lack of critical gas infrastructure, significant international and regional financial investments are required, he notes.
Reddy expects financiers to find it difficult to be clear cut on defunding hydrocarbon projects owing 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,” Reddy says.