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So, what does industry really think of renewables?

Dec 12 2018 18:54
Khulekani Magubane, Fin24

Captains of industry attending the Energy Week Summit on Wednesday expressed appreciation for the latest version of the Integrated Resource Plan and its pragmatic approach to transforming the energy sector of South Africa.

The summit took place in Cape Town on Tuesday and Wednesday.

Policymakers, industry and regulators gathered to discuss the prospects of the energy sector going into the future.

'Not trying to be a lead actor'

Business leaders said the IRP provided a framework around which they could plan production and consumption of energy sustainably and cost-effectively.

Transnet Chief Business Development Officer Gert De Beer said the freight rail parastatal was assessing opportunities in the transportation, storage and wholesale of oil and gas renewables as a commodity.

"We are one of the largest consumers of energy in the country. As we look at the renewables and gas which affect our business, it is important that we understand how it affects our business. We are not trying to be the lead actor in this movie, but we are careful to put in adequate mid-stream infrastructure for the future," said De Beer.

De Beer said Transnet was aware of the impact of putting limits to the procurement and use of certain sources of energy, such as jobs and localised economic development. He said this would be kept in mind with new technologies that Transnet created or adopted.

"We have capacitated a team to put together a case for a move to mid-stream infrastructure as an attempt to put the building blocks in place to reduce risks while fulfilling our developmental mandate," De Beer said.

Extensive research

Western Cape provincial government deputy director general for energy security Hildegarde Fast said her department conducted extensive research into liquefied natural gas energy’s potential for risk and regulatory consistency.

"We recognised that gas to power is a factor. We have numerous studies by consulting firms and we are at the point of completing another to look at positing a business case for LNG coming into Saldanha Bay," said Fast.

Wärtsilä South Africa’s business development manager Wayne Glossop said the IRP had sufficient measures to ensure that South Africa was competitive in its drive for renewable energy.

"We are excited about what the IRP looks like at the moment. It is a well-considered, well balanced view of what is happening with energy in the world today.

"The objective is to maximise cheap renewable energy," said Glossop.

The appeal of SA

CEO of Engie Southern Africa Mohamed Hoosen said the company had expertise and lessons from similar energy policies around the world that would assist South Africa in avoiding risks and utilising local advantages.

"We are the largest energy developer globally and the largest Independent Power Producer. We are the largest importer of energy into Europe.

"We are in South Africa because the country has transitioned from predominantly coal to a renewable IRP space and we are transitioning into a gas policy state," said Hoosen.

Hoosen said it was a "fallacy" that gas, as a dollar-based commodity, would be un-competitive in South Africa’s energy system.

Reality check

Nedbank Corporate Investment Banking senior representative Sakkie Leimecke said South Africa could not afford another delay in taking care of the local economy’s requirements.

"We have had a reality check in terms of our generation capacity in this country recently. We need to procure new generation capacity. The private sector will have to assist government. The private sector is ready to take the development and construction risk, for their part," said Leimecke.

Leimecke said the current status quo signified a fair allocation of risk among stakeholder for the potential returns.

south africa  |  oil and gas  |  irp  |  energy
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