Page 18 - SA Chamber UK - September Newsletter- eBook

Role of Gas

Olver, one of the country’s most senior and respected civil servants, arrived in London for
meetings with Shell, to discuss the role of gas in the transition from fossil fuels to green energy.
Olver said that the main constraints on a smooth transition were the capacity of the national
grid and the management of the social and economic consequences of decarbonisation.

On access to the national grid there had been a breakthrough by government in lifting
unconditionally the cap on generation by independent power-producers, previously subject

to a 100MW limit and a rafter of conditions.

Liquid Natural Gas (LNG) is seen increasingly by energy experts as a necessary part of the

energy mix to ease the transition for carbon dependent economies en route to solar, wind
and hydro sources of renewable energy supplemented by nuclear where there are gaps as
in South Africa and the UK, analysts say.

“The question with LNG is where will it come from?” said Olver. Fracking in the South African
interior has been put on hold, offshore gas in Mozambique has a limited lifespan and offshore
oil on the south coast of South Africa is a long way from coming online. There is an interest in

offshore gas in Namibia and when that might be in production. In the shorter term, the gas
is likely to come from the Gulf countries.

Transition was Inevitable
The transition was inevitable for the country’s survival because without it, South Africa’s
coal reserves and coal-related industry and exports would be worthless. If all went well with

the transition gas could solve some of the country’s other most pressing problems such
as unemployment. While thousands of jobs would be lost in the coal-mining and related
industries many more could be created in other mining sectors, which had been neglected
because of the dependence on coal. These included platinum, manganese, nickel, copper,

lead, zinc, iron and steel and rare earth minerals.

Of the major risks facing the country over the next ten years, five were climate and

environment related. “There is a poly crisis which will stress profoundly all our systems
going forward,” Olver said.

The strongest factor working in favour of a relatively smooth transition was the unswerving

commitment of Ramaphosa to the transition away from coal. The President’s eye is set on the
systemic reforms, and he has spent much political capital on getting that done. One can say
many things about the President but when it comes to climate change and the just energy
transition his commitment is total and he cannot be faulted.

Investing in Renewables

Olver said the JETP was not a “vote-catcher” and had not been politically popular from the

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SA CHAMBER UK NEWSLETTER SEPTEMBER 2023