Amidst soaring gas and oil prices and global shifts in energy markets, many decision makers in the private and public sectors in South Africa seem intent on investing in gas. But if we really want long-term energy security – and a just transition to a low carbon economy – we must look to renewable energy.
The Russian-Ukraine war is now in its fifth month. Beyond the human suffering and the displacement of millions of refugees, the conflict has also caused sharp increases in the price of gas and oil. In Europe, which until recently relied on Russia for 40% of its gas, prices have reached highs of €227 megawatt per hour in recent months.
Unsurprisingly, Europe is now looking to reduce its dependence on Russian gas. Recently, the EU has agreed to suspend seaborne deliveries of Russian gas within a few months, a move that would impact two thirds of Russian gas imports. This move may be the start of more sweeping and extensive sanctions. Many countries around the world, and in particular those in Africa, will look to fill this role as a major supplier of gas on the international stage.
In South Africa, many decision makers are also heralding gas as a means to mitigate the economic harm of rising global fuel prices. Tseliso Maqubela, the Deputy Director-General of the Department of Mineral Resources and Energy, said recently that South Africa must do everything possible to not only ramp up the exploration for gas, but also its production, in order to reduce the country’s dependence on oil and gas imports.
While striving for energy independence might be a noble aim, doing so by relying on creating a new gas industry in South Africa – a fossil fuel which is both economically and environmentally risky – is dangerous and short-sighted.
The myth of clean gas
Right now, gas is being pushed as a viable alternative to coal and a necessary part of South Africa's future energy mix. We are told that gas is cleaner than coal and that we cannot do without it on our way to a greener future. The science, however, says otherwise.
For one thing, natural gas is not as environmentally benign as it may sound. It is a fossil fuel. And despite the lower amount of the potent greenhouse gas CO₂ (carbon dioxide) from gas power when compared to coal, the amount of methane associated with gas is significant.
The myth of clean gas fails to take into account the fact that methane, the main component of gas, is also a greenhouse gas and accounts for 25% of the global warming greenhouse gas (GHG) composition. Methane has an 84 times higher global warming potential than carbon dioxide over a 20-year timeframe. In other words, it will wreak more havoc on the climate over a shorter period of time. The high rate of fugitive methane leakages during the gas life-cycle means that gas is a highly polluting fossil fuel that will render it impossible for South Africa to meet its commitment to reduce its GHG emissions. Moreover, given its global warming potential, expanding reliance on gas undermines the critical and rapid reduction of greenhouse gases required to avoid catastrophic climate change.
Gas is financially risky
While the view that gas is a necessary part of a just transition may have had its place in the past, progressively plummeting renewable energy costs and battery storage costs should have uprooted this way of thinking. Additionally, we now understand the risks of gas – financial and environmental - far better. It can safely be said that locking into large-scale and long-term gas production would be to the country’s detriment.
The long lead times for gas production coupled with the long payback period (the amount of time required to recover the life time energy, cost, and associated pollution generation, amongst other things, that went into making the energy product) means that gas infrastructure faces a real risk of becoming stranded assets in the near future. The International Institute for Sustainable Development, in their report Gas Pressure: Exploring the case for gas-fired power in South Africa, advise that fossil gas is not necessary in South Africa until at least 2035, if at all. This is more than enough of a window to leap-frog fossil gas and establish a power system of the future fully entrenched in renewable energy.
Renewables are the future
South Africa as a country is blessed with an abundance of renewable resources. Such resources come in the form of wind and solar photovoltaic, two of the prime sources of renewable energy.
A July 2020 report by Meridian Economics, A Vital Ambition, shows that renewable energy costs have declined significantly over the last couple of years, placing them as the most cost-effective energy generation source. The increasing efficiencies and decreasing costs of renewables make them the cheapest source of power today. According to the International Renewable Energy Agency, the cost of electricity from utility-scale solar PV fell by 85 per cent since the end of 2009 to present, that of CSP (concentrated solar power) by 68 per cent, onshore wind by 56 per cent and 48 per cent for offshore wind since the end of 2010. These numbers are remarkable, even more so when you consider that these costs are likely to continue decreasing in the future, even if not at the same rapid rate.
The time to act is now
Scaling up investments in renewable energy would not only provide energy security and create jobs, it would also better equip South Africa to compete in a global economy of the future in which products with the lowest possible carbon footprint take precedence for importers of goods and services. A cursory glance in the direction of clean energy funding by international banks and the anti-fossil fuel policies being enacted by them and many governments around the world, such as proposed carbon border adjustment mechanism tariffs in the EU, underscore this.
If South African leaders and investors are serious about addressing the social and economic injustice that millions of people in this country face, they would double down on an accelerated push towards making renewable energy the core of our energy mix. They should ensure that the country invests in renewable energy that incorporates a diverse ownership model - one that includes publicly and socially-owned renewable energy.
Imagine a future in which the South African energy landscape is filled with renewable resources of power that do not harm the environment, the economy or human health. A future in which Eskom and arguably other players, through regulatory adjustments and financing, are enabled to build large as well as small-scale publicly-owned renewable energy infrastructure and thereby secure a vested interest in the green economy. An economy in which jobs are created and sufficient and affordable energy is provided for, and owned by, the populace. This future need not only dwell in our imagination – specific and direct action can and should be taken now to fulfil this vision, for the sake of our lives, our children’s lives and the future of the planet.
From climate crisis, to pandemic, to war, the last couple of years have served as a reminder of the frailty of human life and of our planet. This frailty should be at the forefront of the minds of decision makers and corporate stakeholders, who should be acting with a greater understanding of the brink that humanity is on. For many vested fossil fuel interests, however, humanity and care for fellow humans seems to end where their bank account begins.
Paul Lado is an attorney at the Centre for Environmental Rights.