Publications
Partners
There is an appetite among financiers to invest in South Africa's energy sector, with a couple of caveats: they want to be sure the scale of the project makes commercial sense, and the price point must be viable.
These were some of the issues raised during a panel discussion on the first day of the Africa Energy Indaba in Cape Town this week.
The panel discussion centred around SA's Integrated Resource Plan (IRP) 2019, the energy blueprint which was gazetted in October last year and updates the country's energy forecast up to 2030.
Panel members agreed that some groundwork must still be done on how the strategy will work in practice. And this is one of the snags for potential investors: they would like to hear how long it will take to execute, especially in which sequence the various steps will be implemented.
Investors also noted that for any project, the price point was a key factor in determining viability.
There was a call for government to create an enabling environment, so that projects undertaken in terms of the IRP can be competitive and bankable.
Timelines
Jacob Mbele, deputy director-general of the Department of Mineral Resources and Energy (DMRE), said during the panel discussion that it could take between three to six months for the energy regulator (Nersa) to get back to the department on IRP 2019. In terms of the Electricity Regulation Act, Nersa is required to issue rules designed to implement the IRP.
"This is just an informal number. We are still waiting for the regulator to get back once it has considered the IRP 2019," said Mbele.
"We believe there is space for all technologies in IRP 2019 and we will try to balance the energy requirements for the least cost."
One example he gave relates to South Africa's gas programme.
"There are engagements with the various players in terms of the gas programme with the understanding that, if we have to meet the goals in the IRP, we have to move with speed," said Mbele.
"We have to realise what we want to do with the gas. The Coega Development Corporation is also making sure other customers using gas are coming on board so we can have volumes to make the case for gas."
He acknowledged that the DMRE might have started slowly with regards to the implementation of the IRP, but said now it is moving and "we want everyone to move with us and support us".
"We welcome proposals and engagement that will move everything into place so we can deal with the energy security issues SA has," he said.
Demand matters
Maduna Ngobeni of the Independent Power Producer (IPP) Office, another member of the panel, told the audience that, at the moment, they are "not married to any particular approach" in terms of moving forward with SA's IPP programme.
"We have to look at the demand to see how we pay back the infrastructure we invested in and on top of that, the market is continuously evolving," he said.
Creating the 'perfect cocktail'
During an earlier panel discussion on day one of the indaba, economist Kandeh Yumkela, a former United Nations Under-Secretary-General, called for more global efforts to manage a fair energy transition in Africa. In his view, the use of renewable energy as well as gas should form part of the process.
Dr Angela Wilkinson, secretary general and CEO of the World Energy Council, added that, regarding the use of gas in Africa, it cannot just be any form of gas. It must be "responsible gas". While she sees gas as "a cleaner bridge" for the time being, for its long-term future on the continent, it must also improve its clean performance. According to Pier Carlo Sandei of the Africa Centre for Climate and Sustainable Development, there is still a lot of fragmentation in the energy sector in Africa.
"Therefore, we are trying to bring together different role players. We are like a cocktail bar where we bring together the different ingredients and then create the perfect cocktail for your clients," he said during the panel discussion.
