H.E Gwede Mantashe, South Africa’s Minister of Mineral Resources and Energy, has proposed a plan to establish a new utility company which will focus on gas power generation to alleviate the country’s growing electricity shortages.
The new company will be known as Generation 2 and will take ownership of three of Eskom’s coal power plants in Hendrina, Grootvlei and Camden with a total generation capacity of 4.8 GW, that are set for decommissioning, and convert them into gas power systems.
H.E Gwede Mantashe stated that “If we re-purpose them into gas power stations, we will save a lot of life in South Africa in terms of energy.”
The operations of the proposed gas utility will be funded by a combination of investment from the state, the market and investors, according to the minister.
With load shedding across South Africa continuing to increase due to the inability by Eskom’s existing generation capacity to meet growing energy demand, the Minister plans to fast-forward partnerships with engineering firms to study the feasibility of the projects.
While South Africa has introduced a number of solutions including the REIPPP initiative to increase generation capacity, expanding the country’s energy mix with gas is expected to help address the energy crisis while ensuring energy sustainability and economic growth in a cost-effective manner. With South Africa having vast gas resources that remain untapped including in the Brulpadda discovery made by TotalEnergies, diversifying the energy mix with gas will enable the country to reduce reliance on electricity imports.
Partly owned by the South African government through its investment arm, Central Energy Fund, which has invested $58 million for a 10% stake, the LNG plant is anticipated to further open up the southern African country’s utility-scale gas market.