David Mabuza confirms SA and Mozambique in gas deal talks

31 March 2022 - 20:25
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Deputy President David Mabuza.
Deputy President David Mabuza.
Image: Freddy Mavunda

Deputy President David Mabuza on Thursday confirmed that an agreement had been reached to buy gas from Mozambique.  

“I can confirm that discussions between our minister of mineral resources [Gwede Mantashe] and Mozambique are quite advanced in terms of gas that we should transport from Mozambique to the country.”

Mabuza, who made the confirmation during a National Assembly sitting in Cape Town, said he was not aware of any gas or nuclear deals between SA and Russia.

Mabuza told MPs that the government had created a regulatory environment that is conducive to opening up the market for alternative power generation producers.

“Within the framework of the integrated resource plan [IRP], alternative energy generation measures are being explored and implemented to augment electricity supply and improve the stability of the grid.”

In addition, Mabuza said, President Cyril Ramaphosa had announced the amendment of schedule 2 of the Electricity Regulations Act 4 of 2006 by increasing the embedded generation threshold from 1MW to 100MW.

“In this regard, the department of mineral resources & energy and energy has amended the electricity regulations of new generation capacity and has put together processes to be followed to ensure requests by municipalities for own generation are speedily attended to.

“Now, 292 small-scale generators have registered with National Energy Regulator of SA [Nersa] and have generation capacity of 187MW. The Independent Power Producers Office is processing offers by independent power producers for approval by Eskom and the National Treasury,” said Mabuza.

He said Mantashe has issued a determinations on the required new generation capacity, in concurrence with Nersa.

“The determinations made resulted in the procurement of more than 7,309MW from renewable and non-renewable energy. Most of these power plants are already in operation, with less than 400MW still under construction,” said Mabuza.

Thus far, Mabuza said, preferred bidders for 2,600MW of renewable energy, known as Bid-Window 5, were announced in 2021 with financial close planned for April 2022.

“The request for proposals for 2,600MW of renewable energy under Bid-Window 6 is scheduled for release end-March 2022 and the request for proposal for 513MW of battery storage, is scheduled for release by end-April 2022.”

Request for proposals for 1,600MW of renewable energy under Bid-Window 7 will be issued by the end of August 2022, said Mabuza.

“We must make the point that Eskom’s load-shedding is not as a result of limited market roles for alternative power generation, but mainly a result of breakdowns encountered from the old and ageing power generation infrastructure,” he said.

He added that Eskom’s political task team continued to provide leadership support to ensure that the power utility meets its obligation of providing electricity.

On government’s just transition plans, Mabuza said, “Our energy generation is guided by the Integrated Resource Plan 2019, which provides for the use of all energy resources available in the country. This includes, among others, coal, gas and renewable energy sources.”

He said there are no plans for the discontinuation of the use of coal as 99% of SA’s electricity supply is derived from coal and 30% of liquid fuels are derived from the same commodity.

“Coal remains one of our largest natural endowments that will continue to form part of our energy mix in terms of the IRP 2019.”

He said the IRP 2019 proposes the use of high-efficiency, low-emissions coal technologies.

“Government is working on other measures such as the gas utilisation master plan and the renewable energy master plan.

“We are exploring the development of the nuclear procurement framework as proposed in the IRP 2019. All of these are part of the medium to long-term plans in ensuring security of energy supply.”

The government is working towards a planned optimised plant shutdown to balance capacity, environmental, social and economic considerations.

“This is inevitable because, in the main, these plants are approaching the end of their lifespan, and have become uneconomical, unpredictable and costly to run. Nine coal-fired power stations will be shut down by 2035, thereby affecting significantly on the reduction of generation capacity,” he said.

He conceded that the decommissioning of the existing coal-fired plants will drive the demand for new capacity.

“As coal-fired units and stations are shut down, it is essential that new capacity is added to the grid, to ensure energy security.”

The government is focusing on the implementation of the Just Energy Transition with Komati Power Station as the first coal-fired power station to be repurposed.

“It will be repowered in the next 12 to 18 months, using solar photovoltaic plant supported by 244MWh battery storage.”


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