Fuel is not a superb different to coal. South Africa ought to concentrate on photo voltaic, wind and inexperienced hydrogen – TechnoNews

South Africa is immersed in a “just energy transition” from a fossil fuel-based vitality system to a cleaner, low-carbon vitality system. This new system will likely be based mostly totally on renewable vitality, equivalent to photo voltaic, wind and inexperienced hydrogen.

Such a transition is deeply contested. These with direct and oblique industrial pursuits within the coal trade will defend their stake. However, those that may acquire from a transition will purpose to entrench their new pursuits within the renewable vitality sector.

Then there are those that argue that gasoline is an inexpensive compromise between the necessity to decarbonize and the necessity to keep vitality safety.

Lobbyists for gasoline embody the Industrial Fuel Customers Affiliation, the South African Oil and Fuel Alliance and state-owned vitality firm Eskom. Sasol is a South African vitality and chemical compounds firm that has been closely concerned in lobbying for gasoline. It already operates gas-to-liquid vegetation. It additionally has a vested curiosity in increasing the gasoline market to assist its industrial processes.

The case for gasoline hinges on it being ostensibly “cleaner” and more economical. Fuel can be stated to assist grid reliability when there may be peak demand for vitality. (That is at instances when inclement climate circumstances imply solar energy can’t be generated.)

A current Cambridge College foresight paper authored by Sikho Luthango concludes that gasoline carbon emissions are decrease than coal. However gasoline will not be as clear as different renewable vitality sources.

I head the Africa Programme on the Cambridge Institute for Sustainability Management. I’ve researched regulation, politics and sustainability—and the hyperlinks among the many three disciplines—for 30 years.

I argue that pursuing large-scale gasoline growth may lead to stranded belongings (the place traders are unable to recoup the cash they’ve spent creating the gasoline trade). This might occur due to a worldwide shift in direction of renewables and inexperienced hydrogen.

South Africa has a aggressive benefit in inexperienced hydrogen and renewable vitality applied sciences because of its location and pure assets. (Inexperienced hydrogen is made by utilizing renewable vitality to separate water into hydrogen and oxygen.)

If inexperienced hydrogen had been prioritized, it may entice important world funding. South Africa may grow to be a market chief. Inexperienced hydrogen, mixed with lithium manufacturing, may create as much as 94,000 jobs, far surpassing potential employment within the gasoline sector.

South Africa’s gasoline provide

On 20 September 2024, Eskom and Sasol signed a memorandum of understanding to discover and analysis potential future liquefied pure gasoline necessities.

Nevertheless, South Africa’s gasoline provide is below query. In July 2024, French multinational vitality big TotalEnergies pulled out of drilling for gasoline within the Brulpadda-Luiperd gasoline condensate fields on the south coast of South Africa. Advanced circumstances, together with deep water and quick ocean currents, made the challenge financially unviable for the South African market. The minister of petroleum and vitality assets, Gwede Mantashe, is keen to analyze whether or not the inland Karoo Basin has commercially viable oil and gasoline reserves.

Regardless, South Africa would seemingly have to import gasoline from Mozambique. But, with violent extremism close to the Pande-Temane gasoline area in southern Mozambique, gasoline might be used as a geopolitical weapon. South Africa could be unwise to depend upon one other nation for provide.

Fuel is a fossil gas

Fuel is neither a clear vitality nor a wiser different to coal. Methane leaks alongside the complete provide chain of the gasoline trade are underplayed.

South Africa has additionally dedicated to satisfy the Paris Settlement objectives and section out all greenhouse gasoline emissions by 2050. Fuel initiatives already in operation (or these in development or exploration) will nonetheless be pumping out greenhouse gases by 2050. That is inconsistent with the Paris Settlement.

In addition to, the European Union’s carbon border changes and local weather neutrality targets will punish carbon emissions. This will likely be felt throughout the entire provide chain of South Africa’s export industries. It’ll have an effect on sectors from agriculture to automobile manufacturing to minerals and metals manufacturing.

South Africa additionally lacks demand for gasoline. A brand new market must be created, requiring giant infrastructure funding.

There are different dangers. With out sturdy governance and institutional capability, oil and gasoline initiatives don’t at all times profit the individuals of a gas-rich nation. Regardless of its potential gasoline revenues, price US $100 million to US $120 million as much as 2040, Mozambican poverty charges have remained the identical. Excessive poverty charges in Mozambique stood at 62% in 2023.

What must occur subsequent

South Africa’s Presidential Local weather Fee was arrange in 2020 to facilitate a “just” transition away from fossil fuels. It has urged that quickly constructing renewable vitality with giant storage programs is the easiest way ahead.

The Presidential Local weather Fee says gasoline might play a task within the brief to medium time period to assist renewable vitality at instances of peak demand. However it has additionally warned that utilizing gasoline for peaking energy (electrical energy technology to satisfy peak calls for) can have important value implications.

Regardless of this, the federal government’s nationwide vitality plan, the 2023 Built-in Useful resource Plan, envisages a far greater function for gasoline in South Africa’s future vitality combine.

Nevertheless, renewable vitality applied sciences paired with storage options, like batteries, may function a cheaper and sustainable different to gasoline for peaking energy. The identical analysis discovered that the Built-in Useful resource Plan might have underestimated the long run prices of gasoline (together with infrastructure and risky gas costs) and advocates for renewable vitality over gasoline because of these uncertainties.

South Africa should heed the Presidential Local weather Fee’s recommendation and concentrate on organising giant scale renewable vitality initiatives.

If South Africa’s authorities insists on “going gas,” it ought to be part of over 100 international locations which have signed the International Methane Pledge. Below the pledge, international locations promise to cut back their methane gasoline emissions by 30% by 2030.

If the federal government does proceed to spend money on gasoline infrastructure, it ought to be sure that phase-in targets are used for inexperienced hydrogen in order that the infrastructure is in-built such a means that it can be used for inexperienced hydrogen. That means, stranded belongings and wasted funding will be prevented.

Lastly, South Africa ought to be part of the Extractive Industries Transparency Initiative, which promotes open and accountable administration of oil, gasoline and minerals, in addition to the infrastructure transparency initiative CoST, which promotes transparency round enormous infrastructure that usually results in corruption.

This will likely be vital in organising a sensible mixture of voluntary and binding mechanisms for transparency and accountability.

(Insights for this text had been gathered from key trade and authorities stakeholders via deliberations hosted by the Company Affairs Management Discussion board).

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