THE recently released report “The role of gas in South Africa’s path to net-zero“ – was researched by the National Business Initiative (NBI), Business Unity South Africa (BUSA) and the Boston Consulting Group (BCG) as part of a comprehensive and consultative process to show that it is possible to decarbonise key sectors of the South African economy.
A central finding of the report is that as South Africa decarbonises its economy, gas can, if affordably supplied, play a role as a transition fuel to replace more emissions-intensive fossil fuels such as coal and diesel. Importantly, it can complement battery storage to provide flexible capacity thereby enabling a rapid scale-up of renewables, until alternative long-duration energy storage solutions and greener fuels become affordable. An LNG pathway is assessed as the optimal gas supply option to meet South Africa’s gas demand and address the supply constraints from the diminishing Pande-Temane reserves, South Africa’s only major gas supply source today. The LNG pathway requires limited infrastructure with Floating Storage and Regasification Units (FSRUs) and potentially one inland pipeline and therefore provides the flexibility to ramp down supply post-2040 and minimise the risk of stranded assets and gas infrastructure lock-in.
The report finds that new investments in gas infrastructure should consider the future repurposing of these assets for the usage of green gases (e.g. green hydrogen blends and green hydrogen). For South Africa to achieve a net-zero 2050 target, gas will need to be phased out by 2050 and substituted with greener alternatives.
South Africa will need to establish the enabling policy and commercial framework to:
- Procure gas on an aggregated basis and achieve economies of scale;
- Enable supply infrastructure within the time and to the scale of the gas demand required and
- Manage the risk of unconstrained demand and stranded supply infrastructure.
The gas report is available and can be downloaded from the NBI’s website. Reports for the power sector, mining sector AFOLU and petrochemical and chemical sectors are also available on this website. Reports for other sectors will be released as they are completed.
