South Africa looks to shale and renewables to aid ‘energy independence’

Out-Law News | 15 Apr 2014 | 2:28 pm | 2 min. read

South Africa’s energy minister has said the government is preparing to introduce several new infrastructure projects aimed at “strengthening” the country’s energy sector and increasing the use of new generation technologies.

Ben Martins said he will make a “definite announcement on South Africa's nuclear build future” within the next two months, while a ‘gas utilisation master plan’ will be released for public consultation next month.

The gas plan will outline detailed development options, such as shale gas exploitation, to make South Africa “energy independent”. The Department of Energy said in a statement published on 14 April: “The master plan features infrastructure development options, including pipelines and liquefied natural gas terminals, the creation of an enabling environment for the interconnection with neighbouring countries and the institutional arrangements for managing our gas resources in an environmentally responsible manner.”

Further development of renewable energy sources will also figure strongly in infrastructure development, South Africa’s deputy energy minister Barbara Thomson told renewable independent power producers earlier this month.

“Apart from the obvious benefits of clean power production and the ability to construct renewable energy projects much faster than traditional thermal power stations, we recognise the potential impact that the renewable energy industry will have on job creation, skills transfer, infrastructure development and economic development which are much needed in our country," she said.

Thomson said South Africa’s renewables programme to date had attracted more than 150 billion rand (ZAR) ($14bn) in foreign direct investment and led to the creation of about 7,500 jobs.

A 2003 White Paper on Renewable Energy set a target of 10,000 gigawatt hours (GWh) of power to be produced by 2013 from renewable, mainly from biomass, wind, solar and small-scale hydropower. This is equivalent to about 5% of current overall domestic electricity generation, which is also equivalent to replacing two 660-megawatt generating units at Eskom’s combined coal-fired power stations. Eskom generates about 95% of electricity used in South Africa and some 45% of the electricity used in Africa.

The energy department said achieving the renewable target could have a net impact on gross domestic product of as much as ZAR 1.071bn [$95m] a year and create additional revenue for the state of nearly ZAR 300m [$28m].

Another element of the nation’s energy infrastructure strategy is solar water heating (SWH). Later this month, the energy department is set to announce a list of compliant manufacturers as potential suppliers for the government’s SWH programme. The move follows a government decision to stop the subsidisation of imported SWH systems in favour of local manufacturing, to “increase job creation, industrialisation and the socio-economic impact of the programme”.

The SWH programme was unveiled in June 2009 with a commitment to ensure that one million heaters would be installed in homes and commercial buildings over a period of five years.

Eskom has subsidised purchases of registered solar water heaters since 2008 and had received 156,000 claims for systems as of the end of September 2011. “More than 38,000 high pressure and 84,000 low pressure systems have been rolled out nationally resulting in energy savings of approximately 60 GWh per annum,” Eskom said.

In turn, South Africa’s SWH market has expanded from just 20 suppliers in 1997 to more than 400 suppliers in 2011.

The blending of biofuels into petrol and diesel will also play a role. The government approved South Africa’s National Biofuels Industrial Strategy in 2007. The strategy called for a 2% biofuels penetration to the current fuel pool by 2013. The 2% would “slightly contribute to energy security”, create 25,000 jobs in rural farming, and achieve a balance of payments saving of ZAR 1.7 billion [$180m], the strategy said.

According to the energy department, “the inclusion of sugar cane is expected to contribute towards the growth and development of the sugar cane industry, thus increasing its contribution to job creation and poverty eradication”. A final government position paper is to be published next month and the “effective date” for the rollout of mandatory blending will be October 2015.