Separate Gas and Power Crises in South Africa: Energy Expert

South Africa's energy specialist Roland Tatnall has warned that conflating power and gas cliffs will lead to sub-optimal outcomes. He believes that policymakers should treat these two issues separately, as they have different solutions.

Tatnall argues that the current approach of using gas-to-power (GtP) plants at capacity factors above 50% to anchor liquefied natural gas (LNG) imports is flawed. The goal is to provide cheaper molecules to industrial users, but this will not deliver gas at prices that are commercially viable for most industrial consumers.

The power cliff will be heavily influenced by Eskom's review of its coal decommissioning schedule, with a likely delay announced in September. Tatnall believes that operating GtP plants at mid-merit or base-supply profiles would crowd-out cheaper electrons, increase curtailment, and raise electricity tariffs.

Tatnall questions whether imported LNG is a commercially viable solution for the majority of industrial gas users. He points out that Sasol has stated it will not be able to produce its fuels and chemicals competitively using imported LNG.