A stable, predictable policy and regulatory framework
must be created that will lead to investment and growth in South Africa’s
energy sector, says the country’s Mineral Resources and Energy Minister, Gwede
Mantashe.
Minister Mantashe was delivering his first energy budget speech in Parliament
since the merging of his mineral resources portfolio with that of energy
following South Africa’s general election in May this year.
Announcing a budget of R7.44 billion for energy, the Minister noted, according
to a statement made available to OpenLife through Apo Group channel on July 12,
that the sector had contributed
negatively to overall economic growth in the first quarter of 2019, declining
by 6.9% and making a 0.1% contribution to an overall GDP decline of 3.2%.
“Despite the present economic climate and stringent allocations, we must
ascertain a secure and sustainable provision of energy,” he said.
“In this context, (we must) utilise diverse energy resources in sustainable
quantities at affordable prices, and mindful of environmental requirements, to
support economic growth and development.”
Legislation
The Minister re-iterated his announcement in recent weeks that work is under
way to develop the Petroleum Resources Development Bill “to ensure we provide
policy certainty for the upstream petroleum sector that is relatively new to
our economy yet with great potential to grow GDP, contribute and create much
needed jobs”.
The Gas Amendment Bill, he said, intends to leverage available gas resources
such as those in the Karoo and the recent discoveries in the Brulpadda field,
assisting in the implementation of gas-to-power projects.
Integrated Resource Plan
(IRP)
The IRP, which considers a diversified energy mix that includes all forms of
energy technology such as cleaner coal, gas, hydro, renewables and battery
storage, is in the process of being finalised at the National Economic
Development and Labour Council (NEDLAC) and will be tabled before Cabinet for
approval in September, the Minister said.
“As a country, we must avoid the currently polarised debate on energy, pitted
as coal against renewables. The debate should be about the effective use of all
of the energy sources at our disposal, to achieve security of supply.”
Development of a gas industry
To mitigate the impact of rising electricity prices on the cost of doing
business in South Africa, greater use of natural gas is being explored, the
Minister said.
While most of the country’s current supply of natural gas is from imports via
the pipeline of the Mozambique Pipeline Investment Company (ROMPCO), more
economical options need to be explored, including acceleration of South
Africa’s own natural gas exploration activities.
Meantime, Mozambique will be engaged on the possibility of increasing and extending
the supply of gas beyond 2023 and the importation of liquified natural gas
(LNG) via the Coega Industrial Development Zone will be implemented.
Charting a successful way forward for South Africa’s oil and gas sector,
building on the excitement of the Brulpadda Discovery, local content and
increased gas to power potential will be at the forefront of discussions at the
South Africa Showcase, a new feature for Africa Oil Week 2019.
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