Conflating Gas and Power Crises May Lead to Sub-Optimal Outcomes

Naimon Capital executive director Roland Tatnall warns that South Africa's response to the gas supply cliff and electricity supply crisis is flawed. He argues that conflating the two problems will lead to sub-optimal outcomes.

Tatnall, who has 25 years of experience in the energy value chain, believes that using gas-to-power plants at high capacity factors to anchor liquefied natural gas imports is a misguided approach. This strategy aims to provide cheaper molecules for industrial users while also fuelling proposed GtP plants to cover any electricity supply shortfall.

However, Tatnall questions whether imported LNG can meet the commercial viability requirements of most industrial gas users. He notes that Sasol, which consumes about 120 PJ of the 180 PJ imported yearly from Mozambique, will not be able to produce competitively using imported LNG due to its high cost.