- South Africa will require gas in the medium term as renewables are added to the grid, says Crispian Olver.
- There are concerns about the costs and corruption associated with 20-year contracts.
- A lack of coherence on the just energy transition could also limit the country’s ability to secure future climate finance, warns Olver.
- For climate change news and analysis, go to News24 Climate Future.
While the country could potentially use power ships to provide electricity to address the energy crisis urgently, there are concerns about the costs and potential for corruption associated with 20-year contracts, said Crispian Olver.
Olver, who is executive director of the Presidential Climate Commission (PCC), made his remark in a personal capacity at Daily Maverick’s all-day conference on climate change and environmental issues, on Friday.
Olver was responding to a question about government’s push for floating gas power ships as a means to reduce load shedding, which has had a crippling effect on the economy.
President Cyril Ramaphosa recently told Parliament that the country needs emergency power, like that from power ships, to which other African countries have turned.
Electricity Minister Kgosientsho Ramokgopa has similarly said the government is open to power ships but on a short-term basis – roughly between three to five years. He also told an energy conference that power ships would be “inevitable” for South Africa.
Mineral Resources and Energy Minister Gwede Mantashe has also publicly backed power ships and said there have been “recent noises” of Turkish company Karpowership being accepted as a source to deal with load shedding.
Karpowership in 2020 was named a preferred bidder for the country’s emergency procurement programme but faced criticisms because of the cost (estimated north of R200 billion) it would place on the country over a 20-year contract.
Olver similarly highlighted these concerns on Friday.
“The idea of entering into 10-20 year programme … I think is ill-conceived,” Olver said, adding:
What we are all obviously worried about is that this deal is priced beyond what it should be priced, and we are worried about corruption.
Olver said he is not opposed to power ships as a technology, and they may have a role to play in addressing the energy crisis as an emergency measure for a “couple” of years.
Olver said his personal view is that South Africa does need gas in the medium term as the country scales up renewables. Ideally, battery storage can complement renewables, but until we deploy these, we may have to rely on peaking plants like gas-fired power to meet the energy demand in the interim.
The PCC plans to recommend that the country include between 50GW and 60GW of renewables to be added in the country’s energy mix by 2030, as well as 3GW to 5GW of gas to balance the system.
The big question is where the gas would come from.
“Power ships will be more expensive than fixed land-based assets where can amortise (spread) the cost of the asset (gas plant) over its full lifespan,” he said.
READ | Ramaphosa’s climate advisors to push for massive rollout of renewables in energy plan
Farai Chireshe, energy analyst and project officer at WWF South Africa, also commented on the use of gas power to address the energy crisis. He noted that it is important to consider how long it would take to deploy the power ships – depending on who you ask, it could be three months or one to two years.
Chireshe said that modelling by the University of Cape Town and the National Business Initiative suggests that the amount of gas we need does not warrant domestic exploration. This means we would have to buy the gas- but considering it would be pegged at dollar-based prices, it also has economic implications.
Dog show
Olver was also asked about whether government’s position on fossil fuels and geopolitical relations with Russia would risk the Just Energy Transition- Investment Plan (JET-IP).
The JET-IP stems from the $8.5 billion pledge by rich nations – the US, UK, Germany, France and EU at COP26 in 2021. The climate finance is meant to assist South Africa’s efforts to decarbonise the economy. A big part of this is the accelerated decommissioning of coal-fired power plants in the energy sector.
Olver said it is doubtful the pledge would be at risk, but there is incoherence from government which is confusing international partners.
It’s not helpful where we have different ministers and actors sending out different messages. The problem we have at the moment is one of coherence. Government is not coming across in a consistent way on the JET-IP. And it is now a dog show, anyone can stand up tomorrow and express their view and say, ‘We are holding back this transition. Coal is lovely and we going to stay here forever.’
– Crispian Olver
Mantashe, in particular, has pushed for the continued use of South Africa’s coal reserves, combined with unproven carbon capture and storage technology to limit emissions. He has also pushed for oil and gas exploration for energy sovereignty.
Government is also considering the delayed decommissioning of coal-fired power plants to address energy security. But Ramaphosa has said this would not compromise climate commitments to reduce emissions. Olver has also previously said delaying the decommissioning by one or two years not fundamentally alter South Africa’s ability to meet climate commitments.
Olver said he does not think the international partners would hold back funding the initial pledge, but South Africa is competing with other developing countries for climate finance, and this could reduce our competitiveness.
“We are fooling ourselves if we think we are going to stay the darlings of the world… other countries are moving and taking up the space,” he said.
Recently Indonesia and Vietnam clinched similar just energy transition deals with developed nations, scooping much bigger pledges than South Africa did.
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