Siseko Njobeni
12 August 2008
Johannesburg — THE National Energy Regulator of SA (Nersa) has invited proposals for a study on use of natural gas as the primary energy source in power generation.
The proposed study comes as power supplier Eskom grapples with insufficient electricity capacity while its R343bn build programme to double capacity by 2026 is under way.
In the terms of reference for the proposed study, Nersa leaned heavily on the provisions of the 1998 energy policy white paper which called for the diversification of energy sources.
"Given the increased opportunities for energy trade, particularly in the southern African region, the government will pursue energy security by encouraging a diversity of supply sources and primary energy carriers," the white paper said.
Nersa said demand for electricity was likely to continue to outstrip supply "in the coming years" because of the failure to build sufficient generation capacity. As part of its multibillion-rand capital expenditure programme, Eskom is building base load power stations.
According to Eskom's forecasts, however, these stations will only make a significant contribution to the national grid in 2013. The proposed nuclear power station is expected to come on stream in 2015.
Eskom is still in talks with two potential vendors, Areva and Westinghouse, for the proposed nuclear power station.
"Clearly a gap in electricity generation is developing between the present and the time that new major coal-fired or nuclear power stations can be brought on stream. The question is -- can gas-fired power stations fill that gap?
"Given the potential cost to the economy of electricity outages or shortages, it is worth considering an alternative to least-cost generation screening curves, such as reassessment of the value of lost load compared to the cost of short-term supply solution," Nersa said.
Gas power stations could be built more rapidly than nuclear and coal-fired power stations, Nersa said. Coal-fired power stations normally take about eight years to build, says Eskom.
Construction on Medupi, Limpopo and Kusile, Mpumalanga -- Eskom's new coal-fired power stations -- has started.
To meet the short-term to medium-term growth in demand, Eskom is also bringing back to service three moth-balled power stations -- Camden, Komati and Grootvlei -- and work on these is expected to be completed in October 2011, adding a combined 3650MW to the national electricity grid.
Nersa said the outcome of the study should include a "cost-benefit" assessment of the potential for electricity from gas-fired power stations "taking into account the shortfall in electricity generation and potential locational advantages of gas-fired power stations, including distributed generation".
The deadline for submissions on the use of natural gas as the primary energy source in power generation was Friday next week, Nersa said.
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