South Africa is facing an energy crisis on a very large scale. It's not for nothing that President Cyril Ramaphosa took the unprecedented step of declaring a "national disaster" in February.

The country's fuel and energy sector is truly in trouble, with power shortages and blackouts worse than ever before.

There are some hopes for relief, including efforts to find new sources of fuel for thermal power plants (TPPs).

On the one hand, South Africa possesses large offshore natural gas reserves in the Outeniqua basin and may be able to find more in its section of the Orange basin and elsewhere.

On the other hand, it shares borders with other two future gas producers – Namibia and Mozambique, both of which have sizeable reserves and smaller populations than South Africa – that may be willing to export some of their bounty under the right conditions.

Nevertheless, these solutions are still some distance away, given that it will take years to bring gas from these large-scale projects to market.

In the meantime, South Africa should not lose sight of the fact that it has other solutions at hand.

It is true that the solutions I'm talking about are considerably smaller in scale and humbler in nature than the massive projects I've already mentioned.

They don't target new deepwater frontier basins, and they won't require multi-billion-dollar investments. But they do have the potential to offer crucial support to Africa's second-largest economy at a time of severe crisis.

I'd like to talk about two companies that are in a position to offer this kind of support.

Kinetiko Energy: Onshore Gas Supplies to Local Power Stations

One of them is Kinetiko Energy, an Australian company that is working to develop conventional gas reserves in southern Africa. Its primary focus is the Amersfoort-to-Volksrustregion, which focuses on a large gas deposit in the Mpumalanga province, southeast of Johannesburg.

Kinetiko is still working to determine exactly how much gas its licenses contain, but it is optimistic in light of the fact that the area has long been known to hold very high-quality methane in shallow sediments and coal-beds, and it has estimated its 2C resource at 4.9 trillion cubic feet (138.8bn cubic meters).

On January 30, 2023, the company issued a statement extolling the "record breaking" results achieved from a new core well, 271-23C, during logging and core-sample testing after the completion of a three-well drilling program.

The statement included some insights into the well's geology, but it also quoted Kinetiko CEO Nick de Blocq as saying that 271-23C was in a favorable geographic location.

Specifically, he drew attention to the well's position in Block ER271, close enough to the Majuba TPP to represent a field which could supply it with gas in addition to coal, its usual fuel.

Meanwhile, de Blocq also drew attention to 270-03C and 270-06C, the other wells drilled during the three-well drilling campaign.

He pointed out that the Lily Pipeline runs through all of Kinetiko's current blocks, including Block ER270.

This is South Africa's largest gas conduit, which transports gas from Sasol's Secunda plant to coastal cities and to industrial consumers in the KwaZulu Natal region.

 "The proximate location of our southernmost boreholes in ER270 to the steel-smelting and manufacturing centre of Newcastle could mean a simplified logistical solution to get the gas to an increasingly hungry thermal industry market," he stated.

Of course, it is true that Kinetiko is still working to finalize its plans. It has yet to determine exactly when it can begin commercial production, having started the activities required to evolve their Exploration Right into a Production Right, and it is busy negotiating with midstream players who bring downstream offtakers and financing.

But it is optimistic about its ability to launch small-scale development quickly — and about its ability to make a local power-generating entity one of its very first clients.

This is the sort of initiative and drive that has the potential to benefit South Africans greatly on a local level while larger-scale solutions come together, and I hope to see more of it.

Creative Ideas and Environmental Considerations

Indeed, if South Africa was willing to take steps to open up more of the onshore basins that might hold gas — such as the Karoo basin— it would be giving investors a signal that it was ready to entertain new solutions to a problem that has persisted for far too long.

Of course, when I call for new solutions, I don't mean it's time to give free rein to polluters and forget about environmental concerns entirely.

If South Africa is going to develop an onshore gas industry, the government ought to be making plans to develop the regulatory regime accordingly, and investors ought to be keeping environmental concerns front and center as well.

But there's good news: Some of them are already doing so.

Renergen: Demand for Gas Beyond Power Generation

And that brings me to my second example: Renergen, the native South African company that is carrying out the Virginia gas project.

Renergen has been working to develop three conventional gas fields in Free State – Theunissen, Virginia, and Welkom, which are collectively estimated to hold nearly 407 billion cubic feet (11.53 million cubic meters) of conventional natural gas in proved and probable (2P) reserves.

It is keen to monetize these fields because they contain relatively high levels of helium — a commodity that is both valuable and rare — as well as gas.

As such, it has worked to transform its initial compressed natural gas (CNG) initiative into a larger-scale and considerably more ambitious liquefied natural gas (LNG) project.

In September of last year, Renergen started up its onshore gas liquefaction plant, becoming South Africa's very first producer of LNG.

The company touted its environmental credentials in a Twitter post announcing the launch, noting that the plant's output would help reduce the country's carbon footprint by making a new type of fuel with lower emissions intensity than diesel available for trucking and other commercial uses.

It was referring to a deal signed in the summer of 2020 with Total South Africa, a subsidiary of the French major TotalEnergies, on joint marketing and distribution of LNG.

Under that deal, Renergen agreed to deliver some of the LNG from the first phase of its plant to Total-branded filling stations along the N3 road, a major highway connecting Durban and Johannesburg, for sale as a long-haul trucking fuel.

It also pledged to make more LNG available for distribution and sale via Total stations along other key highways once the second phase of its plant came online, saying that expanding the use of LNG in the road freight sector would help curb the rise in carbon emissions.

But Renergen has not confined its efforts to transport. It has also targeted industrial customers, and in August 2021 it signed a five-year supply agreement with Ardagh Glass Packing (previously known as Consol Glass), a supplier of glass packaging materials based in Johannesburg.

Then in February 2022, it followed that with another five-year deal — this time, with Ceramic Industries Group, based in Vereeniging.

Both Ardagh and Ceramic Industries are subsidiaries of Italtile, based in Cape Town; Ardagh has said it intends to use the LNG to replace liquid petroleum gas (LPG) at its Belville operation in the Western Cape area, while Ceramic Industries will use LNG to supplement the gas supplies it receives via pipeline.

Renergen made its very first shipment of LNG to Ardagh's Belville site in December 2022 after setting up turn-key delivery facilities per the terms of its contract.

At that time, the company said it had received expressions of interest in its LNG from multiple South African businesses, including independent power producers (IPPs), large-scale industrial manufacturers, and heavy logistics operators.

It did not name any potential new clients, and since then, its efforts to drum up new business may have been overshadowed by the escalating energy crisis.

Nevertheless, Renergen's efforts to establish a foothold in the industrial and transport sectors are important. They demonstrate that there is ample room for natural gas in South Africa – that there are opportunities for gasification in the country that are not confined to the power-generating sector.

Yes, South Africa urgently needs gas to help resolve its energy emergency. Gas will help South Africa find ways to produce the additional electricity it needs to provide all of its citizens with reliable and secure power — both in the longer run as new offshore fields come online and in the shorter term as companies such as Kinetiko and Renergen develop onshore resources.

But South Africa could also use gas for other purposes. It could use gas as a substitute for diesel in long-haul trucking — and thereby reduce emissions in the transport sector.

It could introduce LNG as a fuel for industrial customers — and thereby reduce emissions in that part of the economy, while also reducing the drain on the national transmission grid.

It could create markets that can be sustained and made profitable even beyond the time when (I hope) the current crisis will be nothing but a memory.

So let's give South Africa's smaller-scale gas producers a chance to grow.

By NJ Ayuk

Witnessing the far-reaching effects of South Africa's continuing power cuts has been tremendously disheartening.

The frequent and extended power outages taking place have left businesses in Africa's most industrialized country struggling to function. Manufacturing is suffering. The national economy is taking a hit.

The prolonged darkness is emboldening thieves and pushing crime rates up. And as state-owned utility Eskom spends increasingly more on what are ultimately unsuccessful efforts to fix the problem, its operational costs are surging.

Those costs are being passed along to consumers and businesses in the form of power price hikes, placing additional burdens on them.

I don't believe President Cyril Ramaphosa was overreacting last month when, in response to the outages — by then leaving people in the dark six to 10 hours a day — he declared a national state of disaster.

This freed emergency funding and gave the government additional powers, including streamlined procurement processes. I agree with the grave concerns he shared during his State of the Nation address in February.

"We are in the grip of a profound energy crisis," Ramaphosa said. "The crisis has progressively evolved to affect every part of society. We must act to lessen the impact of the crisis on farmers, on small businesses, on our water infrastructure and our transport network."

This crisis, explored in depth in our soon-to-be-released report, The State of South African Energy, is hardly a new problem.

But the alarming frequency and length of South Africa's periods without power have created an untenable situation that, as the president said, is putting the country's well-being at risk.

Bleak Situation

At the root of South Africa's energy crisis are the country's coal-fired power plants, which are responsible for generating about 95% of the country's electricity. These facilities are old, over-used, and constantly breaking down.

To make sure the country's struggling plants aren't overwhelmed to the point that they trigger a total shutdown of the grid, it has become common practice at Eskom to implement deliberate power shutdowns, also known as rolling blackouts or load-shedding, several times a day.

South Africa's outages have set records for the past three years. In 2020, they reached a new high of 859 hours. That number rose to 1,169 hours in 2021. But 2022's record far exceeded anything seen up to then: 205 days of rolling blackouts.

Last October, the Pan South African Language Board (PanSALB) made "load-shedding" the 2022 South African Word of the Year.

"It should come as no surprise to many South Africans that load-shedding has been the most used word/term in South Africa as the dreaded rolling blackouts instituted by Eskom have largely defined our lived experience in 2022," PanSALB CEO Lance Schultz said at the time.

Failed Fixes

Also frustrating is the costly and unsuccessful saga of attempting to resolve this issue. About 15 years ago, South Africa began construction on two coal-fired plants, Medupi and Kusile, to increase the country's power-generation capacity.

That has not worked out according to plan. Today, the plants are only operating at half of their combined 9600 megawatts (MW) capacity because of breakdowns, technical defects, completion delays, and accidents. And despite the plants' inoperability, the project costs have been enormous, reaching a combined total of R300 billion by 2019.

Even with the hefty tariff increases imposed on customers, the company is struggling to keep up with its costs.

And last September, Ramaphosa announced that completing the two power stations will cost another R33 billion.

Distressing Repercussions

Then there are the costs of South Africa's continuing power struggles. I mentioned some of the negative repercussions on business, crime, and electricity tariffs. But that's only part of the story: Every outage has a devastating ripple effect that puts people at risk.

In South Africa, outages are causing food to rot, and they're increasing the risk of widespread food insecurity. Every day, load-shedding impedes farmers' ability to keep crops watered (pump stations that rely on electricity don't operate) and livestock alive (one farm, for example, lost 50,000 broiler chickens when the ventilation system failed).

The outages impact hospitals and healthcare for the disabled and elderly. People who rely on electricity for medical equipment, like oxygen machines, are being put in life-threatening situations.

Our report provides another troubling detail: the outages' cumulative effect on what South Africa could have achieved. Since 2007, load-shedding has cost South Africa a staggering R1.5 billion – R2.4 billion per day.

The result: Every year since 2007, 1-1.3% of the country's GDP has been shaved away. That means that without load shedding, South Africa's economy could have been about 17% larger than it is now.

I know there is little that can be done about what could have been, but I hope that confronting these painful truths galvanizes South Africa's leadership to put the country on a new path, one where the country begins realizing its full potential.

NJ Ayuk, the Executive Chairman of the African Energy Chamber 

South Africa's energy challenges will be front and center at African Energy Week scheduled to take place on 16-20 October in Cape Town.

By Ireen Twongirwe

Since independence, African countries have spent decades and billions of dollars investing in fossil-fuel-based energy systems that have failed to provide modern energy access to over 600 million people, about half of the continent’s population.

It’s important to note that Africa still faces major challenges including low generation capacity and efficiency, high costs, unreliable energy supplies, and low access rates. More than 600 million people lack access to electricity while more than 80% of people in Sub-Saharan Africa lack access to clean cooking technologies and this has increased on climate change impacts.

We need to understand that there is an urgent need to transition from fossil fuels to protect and conserve our environment from climate change catastrophes.

 What is energy transition? A shift from fossil fuels such as oil, natural gas and coal to cleaner, affordable, flexible and cheap energy (Renewable energy) like wind, solar and hydropower. More so, is energy in full development to fulfil our current desire to conserve the environment and deal with the non-renewable fuel crisis?

 Why transiting from Fossil fuels? The reason behind the push for an energy transition is the negative impacts fossil fuels have on the climate and environment. The transition towards renewable energies such as solar, wind and/or hydro, are important in order to meet the 2015 Paris Agreement and reduce the greenhouse gas (GHG) emissions that affect the environment.

It is clear that Clean energy access in the country still remains low with grid and off-grid access standing at 19% and 38% respectively as of June 2020. The low clean energy access levels cannot support electric mobility, halt deforestation and reduce the socio-economic burdens faced by especially women and youth due to lack of access to clean energy.

Furthermore, clean energy production allows us to generate the energy we need without the greenhouse gas emissions and negative environmental effects that come with fossil fuels, in turn helping to reduce climate change.  Noteworthy, there are many benefits of clean energy, but the top two are environmental and financial. From an environmental standpoint, the process of producing clean energy emits fewer pollutants than the process of generating fossil fuel-based energy. Reducing these harmful emissions is a vital step in combating climate change. From a financial perspective, as the clean energy industry continues to grow, it can help create new job opportunities and stimulate the economy.

Last week, the floods were at the centre of Kampala city, and a lot of destruction (Loss and Damage) took place such as crops, infrastructures, houses, and cars among others. This is an indication that there is an urgency to transit from fossil fuels to clean energy to increase climate adaptation and mitigation. Since Uganda is among the countries that are most vulnerable to climate change,   they continue to invest less in clean energy.  

According to the 2023/2024 budget proposals that were approved by parliament in February, you find that a lot of emphasis is being placed on grid electrification. The generation and transmission votes account for over 90% of the allocations made under the sustainable energy programme.  Despite trillions of shillings being invested in grid electrification, women’s energy needs remain unmet. Women continue to suffer while looking for firewood and buying expensive charcoal and this has increased energy poverty in Uganda.

Why clean energy is important? Clean energy will limit greenhouse gas emissions. This improves air quality and reduces environmental harm. More so, clean energy will create new jobs hence reducing the level of unemployment. As production plants are built, it could bring an increase in jobs and benefit the economy. In addition, it reduces dependence on other types of energy sources. There is an abundance of clean energy resources such as wind and solar. Utilizing these may help reduce reliance on other types of fuel sources, such as coal. Lastly, clean energy will provide universal energy access which is necessary to end poverty, empower women and generate opportunities across Africa.

What needs to be done?  There is a need to increase budget allocations to the renewable energy vote under the sustainable energy programme. The budget allocations should go towards funding women’s access to off-grid solar energy and clean cooking solutions among others. More so, there is a need to provide funding to the Ministry of Energy and Mineral Development to ensure that the ministry undertakes stakeholder consultations including consultations with women to put in place Renewable Energy and Energy policies that meet the needs of women.

In addition, the government should support public awareness programmes on Renewable energy to rural poor communities. More so, the government should deliberately undertake gender and equity policies in solar energy access and stop any activities that are driving deforestation and loss of biodiversity.

Least but not least, there is a need to promote fair pricing for solar energy technology so that even people in rural communities can be able to purchase it since hydroelectricity is too expensive for them.

In a nutshell, as Ugandans, there is an urgent need for us to transition from fossil fuels to clean energy to reduce carbon gas emissions. We, therefore, call upon our Government leaders and financial institutions to invest in green economic alternatives that are sustainable and stop financing fossil fuels, especially Oil and gas that have led to violations of human and environmental rights hence causing climate catastrophes. 

Twongirwe Ireen is the Executive Director, of Women for Green Economy Movement Uganda. (WoGEM Uganda)

The East African Community (EAC), a regional bloc, has said preparations were in the final stages as Uganda readied to host the 10th East African Petroleum Conference and Exhibition 2023.

The 2023 edition of the conference, under the theme “East Africa as a hub for Investment in Exploration and Exploitation of Petroleum Resources for Sustainable Energy and Socioeconomic Development,” aims at showcasing the EAC as a destination of choice for oil and gas investment opportunities to enhance socioeconomic transformation, according to an EAC statement.

The conference and exhibition slated for May 9-11 will take place at a time when the EAC embarks on a journey to implement the EAC Vision 2050, said the statement recently issued by the EAC headquarters in Tanzania’s northern city of Arusha.

According to the statement, the objective of the energy sector development under the EAC Vision 2050 is to ensure a sustainable, adequate, affordable, competitive, secure and reliable supply of energy to meet regional needs at the least cost.

The statement said by 2050, the region’s target is to transform the energy landscape to be characterized by an efficient distribution of petroleum products with sufficient strategic reserves.

Held biennially since 2003, the East African Petroleum Conference has provided increased awareness of the potential for the production of petroleum in the region and other important issues in the petroleum sector, including technological advancements in exploration, development and production, said the statement.