This article is featured in NGW Magazine Volume 2, Issue 18

By Thulani Mpofu

Coal accounted for 62% of the SAPP region’s installed generation capacity in 2016 – due to its dominance of the South African economy –  followed by hydro 21%, diesel-fuelled units 4.4%, wind turbines 4%, solar 3.9% and nuclear 3% -- the latter again thanks to South Africa’s Koeberg reactor.

The SAPP region had combined generation capacity of 61.85 gigawatts, dominated by coal and hydro at 38.4 GW and 13 GW respectively with distillate third at 2.7 GW. Natural gas capacity was a distant sixth at 936MW (1.5% of the total), according to data published by SAPP in June, but highlighted at a recent summit.

South Africa is the dominant economy in SAPP which includes 11 others: Angola, Botswana, Congo (Zaire), Lesotho, Malawi, Mozambique, Namibia, Swaziland, Tanzania, Zambia and Zimbabwe. 

Gas’s minor contribution is despite the fact that the region has 600 trillion ft³ of natural gas reserves, according to South African producer Sasol – which produces gas in Mozambique and exports some by pipe to South Africa. Angola already exports LNG, while Mozambique and Tanzania’s vast offshore gas reserves put both in the running to develop LNG projects in the 2020s – once firms like Eni, ExxonMobil, Shell, Statoil and Ophir Energy judge the currently over-supplied world LNG market is ready. The Eni-led Coral floating LNG project is under development and due to start up 2022. Smaller gas resources exist in Botswana, Namibia, also in and offshore South Africa – technical onshore shale gas resources range between 20 and 400 trillion ft³, mostly in the Karoo.

“The future for southern African economies is in natural gas," said Lloyd Hove, chairman of Discovery Investments, a Zimbabwe-based explorer exploring for coalbed methane in the west of that country: "We have a lot of untapped natural gas which only needs the right investment climate.”

Gas is higher up the rankings of new power plants: of the 1,864 MW commissioned in the SAPP region during the 2015/16 period, 39% was coal-fired, 26% gas-fired and 11% hydro.  In Angola, the first phase of a planned 750MW combined cycle facility at Soyo started producing in August, but only at 22MW.  Mozambique’s gas-fired 40 MW Kuvaninga Energia was commissioned in July. Botswana’s CBM-powered plants may start up in the coming years, although CBM developer Tlou Energy this June generated some power from its gas for its own upstream operations. 

South African President Jacob Zuma in mid-August, after a summit of the Southern African Development Community (SADC), declared the latter would set up the SADC regional natural gas committee, noting: "One of the potential game-changers for the region is the discovery of globally significant natural gas resources both onshore and offshore in a number of our member states.”

“The inclusion and promotion of gas into the regional energy mix will facilitate an increase in universal access to energy, as well as industrial development in SADC," said Zuma. But Discovery's chairman Hove said investment is needed for SADC to benefit from its hydrocarbon potential.

"It's difficult to raise investment locally so much of it has to be from the international market. We have investors keen to invest but the challenge has been the investment climate."

Sasol’s vice president for regulatory affairs Johan Thyse concurs, telling a recent energy conference in South Africa: "We need a regional gas master plan to see how the region can benefit. For this to happen we need a clear roadmap. Our policies must be clear and reasonable.”

Over-reliance on coal and hydro present security of supply and environmental risks, highlighting a need to diversify the energy mix towards more gas. A drought in 2015 forced Zimbabwe and Zambia to cut electricity generation by 30% at their jointly owned Kariba Dam.

African governments need to mobilise more investment into power projects, Johnstone Chikwanda, chairperson of consultancy Energy Forum Zambia told NGW, noting that 30% (190 million) of the continent’s 640 million people lacking access to electricity live in southern Africa.