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New nuclear is not a viable option for SA - Siemens CEO

May 17 2017 21:37
Matthew le Cordeur

Cape Town – Renewable energy, coal power stations and the addition of gas-to-power is all South Africa needs to ensure an affordable and sufficient power generation mix, according to Siemens CEO Sabine Dall’Omo for Southern and Eastern Africa.

Dall’Omo spoke to Fin24 on Wednesday on the sidelines of the Gas to Power World Congress at the African Utility Week in Cape Town.

“Nuclear has a very long build and approval time,” she said. “The longer it takes to build, the higher your costs and the less control you have.

READ: Necsa’s next step towards realising nuclear dream

“Gas has the opportunity to reduce CO2, with a stronger reliance on renewable energy,” she said. “In our context, we do not see that nuclear is viable for South Africa.”

Siemens is a key player in the South African energy space, providing wind turbine manufacturing, gas-to-power plants and smart metering solutions to various stakeholders. It is also involved in the new build project at Medupi and Kusile coal power stations.

Now, Siemens is preparing to bid for the country’s 3 126 MW gas-to-power Independent Power Producer (IPP) Procurement Programme, which was recently postponed until the Integrated Resource Plan is updated.

While Siemens has in the past been a supplier of wind turbines for other IPPs, it is aiming to take on a “stronger role” in the gas programme, said Dall’Omo.

Pointing to the National Development Plan (NDP), which says South Africa must “explore gas as a viable alternative and complement to coal as well as renewable energy”, Dall’Omo said it is an agenda of government to make gas-to-power a reality.

“The change will happen because the gas to power programme is part of the NDP,” she said. “They are aware that certain portions of legislation need to be adapted to make it a better value proposition for suppliers.”

Dall’Omo said South Africa’s aim is to supply energy as cheap as possible. She said coal power stations will still be important in the country for about another 30 years, as they create a lot of jobs.

Following that, she believes the right energy mix should focus more on renewable energy, with gas-to-power boosting the peak demand gaps.

“To make renewable energy work, you would require gas to generate electricity at a relevantly cost-effective peak load,” she said. “Then you would feed baseload at night through gas.”

To ensure gas-to-power generation can occur, South Africa needs to address its port infrastructure and possibly form a partnership with Mozambique, which has huge gas reserves.

“To get gas to South Africa, you need ports that accept LNG and regasification, and can send the gas into a pipeline or storage,” said Dall’Omo. “LNG is a commodity, meaning that you can buy it anywhere. From there, you need a short pipeline to power stations.”

Government has proposed plans to expand ports for this to occur, but Dall’Omo said more details of these plans are required.

She said the partnership with Mozambique was very speculative, but said it would be good to grow the economies of two African countries in this way.

“That would be a regional integration project; it would take your neighbouring country into growth,” she said. “Africa has a drive to help each other.”

READ: New energy minister to follow in predecessor's footsteps

With all these issues at stake, Dall’Omo was disappointed when new Energy Minister Mmamoloko Kubayi didn’t give investors and stakeholders at the conference any new information regarding South Africa’s energy future on Tuesday.

“It’s a pity that they did not announce anything, as the participants were expecting information,” she said. “However, people will give her the benefit of her new appointment.”

Kubayi apologised during her speech on Tuesday, saying more information would be revealed during her budget speech in Parliament on Friday.

The relatively young minister was given the new role after President Jacob Zuma’s cabinet reshuffle in March saw Tina Joemat-Pettersson removed from the position.

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