Gas to power: Can a transition to energy sovereignty in South Africa be achieved in our lifetime? Rob Hersov

By Robert Hersov

Recently discovered shale gas reserves in Southern Africa are being considered as a potential new energy source to provide clean, reliable, and more affordable energy while mitigating greenhouse gas emissions relative to the current dominant coal sector in South Africa. 

On-shore gas exploration using hydraulic fracturing technology has become controversial across the world as the environmental concerns clash with critical energy requirements. The discussions appear to become reconcilable currently with the context of global geopolitics and security issues (and hydraulic fracturing now being undertaken in a professional, cost-effective and environmentally-friendly manner in numerous countries). But in a country like South Africa which has critical energy constraints, it has become both necessary and expedient to find a comfortable middle ground that considers the environmental concerns but ensures a sustainable energy supply. 

Shale gas is thus proposed to be the most viable transitional fuel in the context of climate change mitigation pathways and has become South Africa’s most viable option to ensure our energy sovereignty. The need for a sustainable and reliable energy supply is becoming increasingly apparent, in both local and international contexts, with South Africa becoming an integral part of the global transition towards alternative sources of electricity generation. The urgency behind this evolution can be appreciated considering that South Africa is the largest emitter of greenhouse gases in Africa, accounting for as much as 42 % of the continent’s total emissions and is also estimated to rank amongst the top 20 largest emitters of greenhouse gases in the world. These emissions are largely a result of an energy-intensive economy and high dependence on coal-based electricity generation. The South African government is committed to supplementing the existing generation capacity of thermal and nuclear power plants with alternative lower carbon energy power generation, thus creating the framework that will lead to an increase in the supply of sustainable energy for the nation

Approximately 90% of South Africa’s energy comes from coal sources, which produces significant carbon emissions. It is speculated that by developing just one 10th of South Africa’s estimated shale resources the economy would be boosted by R200 billion a year and create over 700, 000 jobs.

Recent reports suggest the Central Karoo could be sitting on enough gas to fuel the country for as many as 400 years. South Africa’s estimated 392 trillion cubic feet of recoverable shale gas reserves are the eight largest in the world according to the US EIA.

The National Development Plan envisages that, by 2030, South Africa will have an energy sector that provides reliable and efficient energy service at competitive rates, is socially equitable through expanded access to energy at affordable tariffs and environmentally sustainable through reduced pollution.

  1. Strategic Context 

South Africa is considering utilizing its shale gas reserves to reduce its high greenhouse gas emissions and initiate a downward shift in emissions in line with its GHG mitigation pledge submitted to the United Nations Framework Convention on Climate Change.

South Africa’s economy is characterized as one of the most carbon-intensive in the world. National CO2 emissions per capita are approximately twice as high as the global average, and CO2 emissions per unit of GDP are close to three times as high. Abundant coal resources and a heavily subsidized mining sector used to attract and support energy-intensive industries and an electricity sector based on coal-fired power plants.

Today, carbon-intensive consumers are still the major drivers of economic development in South Africa. But despite plentiful domestic resources, the electricity sector has been experiencing shortages and blackouts due to sub-optimal management, government ineptitude, widespread corruption, and the reliance on old and inefficient coal power plants. This energy shortage peaked in 2008 during the so-called electricity crisis and has since been hampering economic development; security of supply dropped while electricity tariffs were increased high above the rate of inflation. This development has raised awareness about the urgent need to modernize, diversify and strengthen the South African power plant portfolio.

Why use gas at all when there is abundant cheap solar and wind energy? Because adding quick-to-respond gas turbines into the South African energy mix increases the ability of the power generation system to use intermittent renewable energy sources in a way which slow-to-respond power sources like coal and nuclear cannot.

This technical policy decision has already been taken, as reflected in the country’s Integrated Resources Plan (2019); the only question is where to source the gas. Relative to the use of imported gas, a viable Central Karoo shale gas find would save foreign exchange, accrue tax and employment benefits and improve national energy security. 

  1. Problem statement

Power supply in South Africa is now critical and affecting every South African. It is the understanding that a number of programmes have been put in place by the South African government to close the gap between consumption and production. It is assumed that some of the demand-side management programmes may have been relatively successful, and others have their limitations but additional power generation capacity is urgently required to provide security of supply and to stimulate much needed economic growth.

Government interventions of introducing additional power stations, generators and even tariff increases have proved to be inefficient in terms of addressing the country’s electricity shortages. The Integrated Resource Plan (IRP) 2019 stressed a short-term gap in supply to be anticipated between 2019 and 2022 due to the time expected for the new power stations (Medupi and Kusile) and the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) to come online. This may further be delayed by the poor design and planning of the Medupi and Kusile plants and their delayed correction. The IRP specified the need for new energy efficient technology and the diversification of both the supply and nature of energy production to reduce pollution and minimize impacts related to climate change.

The CSIR (Setting up for the 2020s: Addressing South Africa’s electricity crisis and getting ready for the next decade, 2020) further predicts that load shedding can be expected for the next 3 – 5 years and that an urgent response is required to ensure reliable short-term energy supply. Recent announcements by Eskom in November 2022 have extended this period for several more years. The energy supply situation has become totally unreliable and unpredictable.

According to the South African Petroleum Industry Association (Sapia), the fuel sector contributes about 8,5% to the country’s gross domestic product (GDP) while supplying some 18% of South Africa’s primary energy needs through annual sales in excess of 31 billion litres of liquid fuels. Supplementing supply and investment in South Africa’s aging and now closed oil refineries (Sapref and Engen) is necessary to avoid widening the trade deficit for liquid fuels. The liquid fuels sector is dominated by private petroleum companies, as well as the state-owned Petroleum, Oil and Gas Corporation of South Africa (PetroSA). 

A BusinessTech report of 1 July 2021 stated that Eskom Stage 6 loadshedding costs South Africa as much as R4 billion per day of unserved electricity. Other economists have previously estimated that the country’s economy has shrunk between 8%-10% due to Eskom inefficiencies, corruption and related ongoing loadshedding. 

  1. Opportunity 

The South African government is clear that solar and wind generation is limited and has intermittency and dispatchability challenges and cannot provide the much-needed baseload.  Government understands that we need to have the power available when South Africa needs it (energy availability factor) which is not the case with the current electricity build programme that constrains the grid and reduces the reserve margin to well below globally acceptable levels. 

Intermittencies of wind and solar also cause challenges for this new energy to become mature. With 12GW of Coal power that will be decommissioned by 2025 and 34GW by 2050 the SA government is looking for a solution that will assist them not only to grow solar and wind, but to ensure that the economy will have the power available when needed.

One potential structural measure for ending South Africa’s energy crisis is currently under governmental review and the subject of heated public debates: industrial-scale hydraulic shale gas fracturing, or fracking, a technique enabling natural gas production from previously uneconomic shale gas resources. Reserves in South Africa are in abundance (up to 392 EJ) across the Karoo Basin in central and southern South Africa. With its lower direct CO2 emissions compared to coal, natural gas from shale formations is considered as a possible remedy for South Africa’s energy challenge. It may satisfy the growing energy demand while emitting less direct GHG and other pollutants than the current coal-based power plant fleet. On the one hand, promoters point out the benefits of large-scale domestic shale gas development: economic growth, reduced local air pollution (e.g., sulphur, black carbon), and decreasing dependence on imports. On the other hand, opponents of fracking voice concerns about the potential negative social and environmental impacts resulting from shale gas extraction, such as increased threats of earthquakes, water pollution, ground water table lowering, and methane leakage (much of which has been mitigated by professional gas-to-power operations in other countries).

  1. Conclusion

On-shore shale gas exploration is a viable opportunity in South Africa with a promising production capacity, especially in the Karoo shale formation in the vicinity of Beaufort West. There is more than enough political will in the region as well as adequate resources to enable the transition to energy sovereignty and solving the energy crisis in South Africa in a very short time period with the energy being easily dispatchable, affordable and accessible to our people. This energy transition will significantly reduce the current and future economic impact. 

South Africa needs to urgently accelerate the gas-to-power onshore activity and allow the private sector to activate this opportunity. 

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