The importance of gas as an energy source

November 14th, 2019, Published in Articles: Energize, Featured: Energize

South Africans seem to be convinced that the best form of energy is electricity. But this is not always true. Natural gas is a clean-burning source of energy which is ideal for many industrial processes. In the latest iteration of the country’s energy plan, the Integrated Resource Plan (IRP2019), gas is predicted to provide 8% of South Africa’s primary energy. It is time for gas to take its rightful place in the energy mix.

Ken Gafner

Gas is a clean and flexible fuel. It is ideally suited to replacing coal, liquid fuel and electricity in heating applications ranging from industrial heating and boilers to residential heating and cooking. A large number of industrial plants are well suited for own gas-powered generation to provide both heat and power.

Gas powered combined heat and power (CHP) applications become really attractive when the exhaust and engine waste heat is used to displace other energy sources such as electrical heating, steam, hot water and direct heating. Utility power generation worldwide is typically 30% efficient. For the best CHP applications such as electricity and steam from a plant operating at full load, nearly 90% of the input energy is effectively utilised.

The carbon footprint of CHP is less than half of Eskom’s utility electricity. CHP may be combined with solar photo‑voltaic (PV) generation to lower carbon footprint even further. Gas-fired CHP also eliminates the 1,3 l of water required per kWh and particulates associated with coal fired utility generation.  A gas economy will contribute substantially to meeting South Africa’s carbon reduction commitments.

Gas and the IRP

The IRP2019 defines the generation capacity against which generation licences can be granted. This allocation is per year for each technology. A 500 MW allocation is included per year for private generation, which includes solar, wind and power generation. This removes a key barrier to private generation allowing clean, efficient generation to take its place in South Africa; all at no cost to the taxpayer.

The IRP2019 includes two gas fuelled power plants with 1000 MW coming on grid in 2024 and 2000 MW in 2027. This generation is typically aero-derivative gas turbines, utilising the same turbines which are used on aircraft. These turbines can be started and be on load within 10 minutes; the ideal technology to provide top-up power for morning and evening peaks and compliment wind and solar.

Kickstarting gas

The Mozambique pipeline delivers 180-million GJ of natural gas to South Africa each year from the Taemane gas field in southern Mozambique. The majority of this gas is used for Sasol’s Gas to Liquids process with 37-million GJ distributed to industrial, commercial and residential customers by Sasol Gas, Springs Light and Egoli Gas. In addition, a further 25-million GJ of methane rich gas is distributed to industrial customers by Sasol Gas. The existing gas supplies to South Africa are fully utilised and the Taemane gas field is tapering off. Additional gas supplies are required if the IPR2019 generation allocations are to be realised.

Liquified natural gas (LNG) provides the solution for transporting natural gas to areas where pipeline gas is not available. Natural gas is cooled to -160°C where it becomes liquid, enabling it to be transported by LNG carrier. LNG currently accounts for approximately 10% of world energy demand. Significant regional LNG supplies are being developed in northern Mozambique with first shipments scheduled for 2023/2024. The IRP2019 gas demand is easily supported by LNG if the infrastructure on the South African side is in place.

A floating storage and regasification unit (FSRU) allows the local infrastructure to be implemented within the IRP2019 time frame. The FSRU comprises a liquefied natural gas (LNG) carrier with on-board regasification. A single FSRU is capable of delivering gas volumes comparable to the existing Mozambique gas pipeline.

Fig. 1: Typical FSRU application. FSRU permanently moored adjacent quay. LNG tanker moors alongside and transfers LNG cargo to the FSRU. Land based storage added later as required (Photo courtesy of Excellerate).

In a South African scenario, the FSRU would be permanently moored and linked to the shore-based gas distribution network. The on-board LNG storage facility would be replenished by conventional LNG carriers as required. The key advantage of a FSRU is the rapid deployment and conversion of capital cost to a tolling cost. LNG is a flexible fuel as it can be regasified (RLNG) and delivered to the pipeline network to suit demand or distributed as LNG by road or rail. The FSRU allows consumers to be added to the existing gas distribution network and will promote gas network expansion as it is driven by demand.

This is most easily implemented in Richards Bay where there is existing port infrastructure.  RLNG delivered to existing gas distribution will support local demand, freeing capacity in the Lily gas line and allowing the gas flow in the Lily gas line to be reversed to deliver RLNG to the highveld. As gas demand increases it becomes financially feasible to replace the FSRU with permanent shore-based storage and regasification.

Coega and Saldanha are also favoured for LNG import but require more significant marine works to accommodate delivery from a standard LNG tanker. The opportunity exists to serve these sites with smaller shuttle tankers operating from Richards Bay. The technical solutions exist to supply the gas required to implement the IRP2019 gas generation allocations within a relatively short time frame.

In the meantime, as the demand for gas increases and as Eskom seeks to decommission some of its older, dirty, coal-fired power stations, these could be sold to private, independent power producers which would convert them into gas-fired power stations. This proposal is not new but is sensible given the fact that so much of the infrastructure and equipment is already in place at such power stations. If one generating set were to be converted to gas at a time, a steady gas ramp up would be achieved while gradually reducing the labour requirement and coal demand of the existing power plant. This would address concerns of the labour unions and coal producers.

The long game

Increased gas availability would stimulate demand until a point is reached where shale gas development and linking to existing distribution is bankable. Competition in shale gas development has the potential for gas prices to move toward international benchmarks such as Henry Hub, which are significantly lower than South African gas prices.

The ultimate vision is a South Africa with a substantially lower carbon footprint utilising the locally available shale gas. This gas would be distributed from the Karoo gas fields to Cape Town and Gauteng. The existing Lily gas pipeline would link to Richards Bay with a coastal pipeline to Cape Town closing the loop. This would make cost effective, clean gas available to most consumers. The positive cycle is enabled by the key first steps of IRP2019 approval and FSRU deployment.

I believe that gas has a great future and that the next ten years will be hugely exciting.

Contact Ken Gafner, SDE, Tel 011 997-2340, keng@sde.co.za

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