JURIE SWART: Gas-fired power is a no-brainer

I recently stumbled on Vaclav Smil’s, Numbers Don’t Lie. Early in the book he comes to the well-researched conclusion that 75% of all births during the 50 years between 2020 and 2070 will be in Africa. This perhaps explains why it has become relatively easy to emigrate to developed economies — they are desperately opening the gates to avoid population decline.

Conversely, it makes Africa the place to be. This does, however, come with a catch. To capitalise on this demographic dividend we have to create jobs, and plenty of them. But not just any jobs. These must be manufacturing jobs that lead to real growth, to ensure we get our economies moving and improve people’s quality of life.

Let’s not just till the soil; let’s process the produce, build the machinery that processes the produce, build the ship that exports the processed produce, and so on. This is why the EU, with less than 7% of the global population, generates nearly 24% of the world’s economic output.

However, to create manufacturing jobs we require reliable, affordable and consistent supplies of energy, especially power. We need to be clear that every time a productive resource turns on the switch and nothing is forthcoming, it is an opportunity lost to steal a march on fierce global competitors.  Every time we squabble and dither about the best model for the way forward, we are falling by the wayside and failing our desperate youth.

Absolute control comes at an unquantifiably huge cost. We need to think big, unselfishly and liberally. It is abundantly clear, given the content of his weekly letters, that President Cyril Ramaphosa he is doing everything in his power to establish an electricity industry environment that is an accelerator rather than a handbrake.

Much has been made of the renewable energy revolution as a panacea for our power needs. In SA we have implemented a relatively successful programme of building such plants. Of course, we all love renewable energy. What better way to leave the planet in a better state for our children?

However, renewable energy alone cannot sustain the type of consistent supply that is required. It is a variable energy source that is effective only if it is fed into a large, stable grid. It cannot be 100% of our energy supply, for the medium term probably 20% at best. And in our haste to chastise Eskom we forget that to feed 3,000MW of solar photovoltaic-produced power into the grid it must have 1,000-1,500MW of “spinning reserve” and serve as “the grid’s battery”, the cost of which is seldom considered when we spew forth the virtues of renewable energy.

In short, we need large-scale, dispatchable power at a reasonable cost. Over and above our current power supply woes as the ageing Eskom fleet heads closer and closer to inevitable decommissioning, we need to find large quantities of power, fast. And, much as we feel deeply for the communities that have built their livelihoods on coal, the carbon footprint left by coal-fired power technology is simply unacceptable.

Enter natural gas. The combined cycle gas turbine (CCGT) was first developed in the late 1960s and the best efficiencies of CCGTs now top 60% across all the major manufacturers. Gas turbines are the ideal suppliers of peak power and the best backup for intermittent wind and solar generation. Even as a baseload generator, gas turbines are in a league of their own. Implemented with a long-term, well-considered design and geographic location in mind rather than on an emergency basis, it is estimated that not only do they generate electricity at cost multiples below newly built “acceptable” coal-fired power stations, but also below that of solar PV and onshore wind generation projects when factoring in the cost of maintaining “spinning reserve”.

Gas turbines are compact, easy to transport and install, relatively silent, affordable and very efficient, offering almost instant output and, importantly in our water-scarce country, they are able to operate without water cooling. The carbon footprint of 1 kWh of gas-generated electricity is 40% of the same amount of conventional coal-generated electricity. Gas is an abundant global resource and easily sourced.

Just across the border

In neighbouring Mozambique, within the Southern African Development Community and well located on the Southern African transmission grid, there are already more than 450MW of gas-fuelled power plants in operation, all completed since 2014. They were all built in less than two years, using the best available technology in support of long-term power purchase agreements, and clearly demonstrate the environmental and flexibility benefits of gas power.

They are all currently fed by the Mozambique-SA natural gas pipeline, known as Rompco, which has operated without any major interruption since 2004. It was thus surprising that SA, despite long being the beneficiary of the Cahora Bassa hydroelectric scheme in Mozambique, explicitly excluded any cross-border power generators from participating in the recently awarded emergency power programme, even though some of the most logical options are situated there. However, the latest announcements and efforts of the energy ministry are very encouraging and point to an increasing realisation that every source, and particularly the most viable sources, need to be tapped in short order.

New gas projects in Mozambique can generate electricity at a tariff well below the numbers that are estimated in the various models bandied about at present. They are also well below the tariffs that are being produced by the competitive processes that are reported on, and extremely competitive to the Eskom mega flex rates. And it is a permanent solution, to be built with local resources, to serve our citizens for the long run — but perhaps more importantly, ready to go.

To this end, a 450MW gas-to-power plant is about to kick off in Temane and a 2,000MW gas-to-power generation facility situated within the Beluluane Industrial park in Matola is at an advanced stage of development. The Temane power station is located right on the gas fields and the Beluluane plant is conveniently situated next to significant transmission infrastructure into the SA grid; it is next to a 1,000MW intensive Eskom power user; it is a mere 16km from the liquefied natural gas (LNG) import terminal, negating gas transport costs and storage requirements; and the LNG will be sourced on the international markets as with any other proposed project outside Temane.

Both generate power at sea level, where gas turbines are most efficient. All of this results in a very competitive tariff. At the close of the recent Sadc business forum, Mozambican mineral resources & energy minister Max Tonela was emphatic in his commitment to create an enabling environment for the role of Mozambican gas in power generation for the greater Sadc region, and particularly its role in reducing carbon emissions.

All that is required is that we get out of our silos, that we recognise the opportunity cost we are suffering, and that we put the kick-starting of our economy above all else. It appears we are heading in the right direction. The real economic opportunity is not in the power stations, it is in what the power unlocks downstream.

• Swart is CEO of industrial gas supplier Gigajoule