South African mining and energy minister Gwede Mantashe has encouraged power developers to invest in South African energy projects, from renewables to nuclear to transmission.
Speaking to a packed conference hall at the Enlit Africa power and energy conference and expo in Cape Town on Wednesday afternoon, he told delegates that he “prefers engaging with entrepreneurs, that’s why I decided to come here.”
The minister delivered his ministerial budget for 2023–2024 to Parliament on Tuesday.
We need nuclear
Minister Mantashe said adding more renewable energy to the grid was hampered by grid capacity, calling it “one of the major challenges facing us today.” He said that during bid window 5, they were unable to connect a 3,200 MW windpower project in the Northern Cape due to the weak grid in the province.
He advised interested bidders to, during the upcoming bid windows 7 and 8, bid for areas where the grid is strong, such as in Mpumalanga, Gauteng and Limpopo.
“We are going to ask for 5,000 MW each. Watch this space, get in there, compete,” the minister added. The minister also mentioned that “as Eskom needs to accelerate transmission capacity, we will welcome investors in transmission.”
Other upcoming bids will include projects for battery storage, gas-to-power and nuclear power generation. “We need nuclear, it’s reliable,” said Minister Mantashe.
He said the Koeberg nuclear power station in the Western Cape had been running for almost 40 years, and “we never had a disaster at Koeberg, it is the same reliable energy generator. It is costly at commissioning, very efficient when generating energy and very costly in decommissioning.”
“The lowest cost energy in South Africa is from nuclear at 40 cents per unit and nobody else can afford that. Renewables have tried to give us 47 cents, but the majority of them could not meet financial close.”
Minister Mantashe also said the government was going to continue with the process of the exploration of shale gas despite having been challenged before in court.
“Our shale gas in the Karoo has been tested and experimented and it has been proven to be economical. So, we are going to remove the moratorium on shale gas. If you want to explore shale gas, be prepared to have patience to endure court challenges, but we are going to open it.”
Just energy transition
Referring to the Integrated Resource Plan (IRP) 2019, the country’s blueprint policy for electricity generation, which is currently under review, he said that it speaks to the “just energy transition in detail.” According to the minister, “the distinction between ‘IRP and general speak’ is the movement from high carbon to low carbon emission, not coal to renewables. And when we say that, we understand that that transition is a journey; it is not an event. Therefore, it will take time to move from high carbon emissions to low carbon emissions.”
“And we are also giving it a character, it will be a combination of technologies that will help us transition from high carbon emission to low carbon emission. What does that entail? It means if we convert a coal power station and repurpose it to a gas power station, it will still be emitting, but it will be emitting half of the carbon emissions of the coal power station. So, it will entail a step in the journey.”
Africa’s just energy transition in the face of the 2030 net-zero targets is a major theme of this year’s Enlit Africa event which ends on Thursday, 18 May.
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