The Central Energy Fund (CEF) is eager to partner with Eskom on gas-to-power projects, says its chair, Ayanda Noah.
These projects include converting three coal-powered stations in Mpumalanga into gas power plants, but the utility must respond decisively, Noah said.
“If you look at the Mpumalanga area, we have a gas pipeline from Mozambique that goes down to Secunda. That gas pipeline runs very close to three Eskom power stations, I believe Tutuka, Majuba and Komati.”
Noah spoke to Business Times this week on the sidelines of the Africa Oil Week conference in Cape Town. She said that while the CEF was keen to help Eskom improve capacity through gas, it was struggling to make progress on these proposals.
“Whether they will catch [the ball we throw at them] is another thing. On the PetroSA side, we do have an opportunity right now to give them about 180MW in the southern Cape. My understanding is that there are engagements with Eskom.
“They [Eskom] have looked at doing some technical studies just to make sure what the capacity for them to receive the 180MW is. That is ongoing. They [Eskom] haven’t completed that and there are still EIAs [environmental impact assessments] that need to be done. I think at some level there is some engagement with Eskom to say we can inject some energy for them in the southern Cape.”
The CEF has a template for the conversion of existing power stations to gas thanks to a recent high-level visit to China where power plants in the world’s second-largest economy were studied, Noah said.
“The Chinese put on the ground 1,800MW in 24 months, so we have an MOU [memorandum of understanding] with the Chinese. I think getting a design, for example, would not be an issue. Of course, it would be subject to engagements, but the point is, there is already a template.
There is no doubt that oil and gas have an integral role in shaping the growth and development of our continent, and this platform provides an opportunity for us to strengthen collaborations and intra-[Africa] trade further for our economies to grow.
— Deputy president Paul Mashatile
“If you go onto a piece of land that is owned by Eskom, you don’t have issues of EIAs. You’ve got a transmission substation there where you can immediately evacuate the power. It’s really just plug and play.”
Noah told delegates at Africa Oil Week that the CEF was making progress in securing a strategic partner to refurbish its Mossel Bay refinery to have it up and running again within 24 months and expand it in the long term.
Eskom said in an email to Business Times that while it is looking at repowering its older coal power stations to clean energy generation when they reach end-of-life, it is still assessing options to extend their operations until power supply recovers.
“The cost of gas supply, inclusive of transport and infrastructure-related cost, is the key determining factor. Also, the efficiency of the technology – using gas to fuel current infrastructure or creating new infrastructure – and capital outlay are important considerations,” Eskom said.
Eskom said if a viable business case exists with no significant adverse impact on the electricity price, these options will be considered. Eskom said it discussed the Mossel Bay refinery with CEF and that it remained an option.
The CEF chair is not the only official concerned about the pace of Eskom’s preparation for shifts in the energy sector.
Minister of mineral resources & energy Gwede Mantashe urged the power utility to prepare for the uptake of energy technologies allowed for in the Integrated Resource Plan (IRP), which he said would be tabled in cabinet by the end of October.
“The most important thing is that Eskom must give us assurance that they have uptake agreements ... They must ensure we have transmission capacity. If we don’t get that from Eskom we are in trouble, all of us,” Mantashe said. Africa had oil and gas deposits, and the discovery of gas in South Africa increased demand for the continent’s renewed investment in refining capacity, he added.
“We are convinced the development of Africa’s oil and gas sector will be the game-changer for Africa, as was the case for developed nations,” the minister said.
Deputy president Paul Mashatile told Africa Oil Week that while South Africa appreciated the need for just efforts in responding to climate change, the continent should prioritise development.
“There is no doubt that oil and gas have an integral role in shaping the growth and development of our continent, and this platform provides an opportunity for us to strengthen collaborations and intra-[Africa] trade further for our economies to grow,” Mashatile said.Komati power station was closed last year to repurpose it for renewable power, in line with agreements at the 2022 COP27 summit in Egypt.
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