South Africa is taking a huge bet on a new fuel source for electricity — liquefied natural gas (LNG). Electricity minister Kgosientsho Ramokgopa has said we will target using LNG for 600MW of power by 2030, but there is almost no infrastructure to import it and no plant to make electricity from it. The government will gazette its 2025 Integrated Resource Plan in a matter of days.
In this edition of Podcasts from the Edge, Peter Bruce talks to Jaco Human, CEO of the Industrial Gas Users Association of South Africa, whose members currently use gas for industrial heating but face a critical deadline — June 2030 — when the current monopoly supplier, Sasol, will cut off supplies, the so-called gas cliff.
The industrial gas users employ close to 100,000 people. Can they and the state build import terminals and pipelines and land long-term gas supply contracts in time? Only the state is big enough to serve as an anchor importer for long-term contracts.
”What has to happen to mitigate the gas cliff? That is priority No 1,” says Human. “What we’re saying to the state is [that] we have now run out of time. We have to talk about demand stacking [orders into the future], and that means the sequencing and addition of gas demand through Eskom, through industry and through private power generation.
“If we don’t get that right, we will sit with a market failure. Right now we see that the government is about to issue or get moving on a gas master plan … or at least publish something. We’re not sure … that the gas cliff is sufficiently addressed in that.”
