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With just 24 months until the gas cliff, there is little time left to develop the projects needed to avoid it, they write. Busisiwe Mavuso.
I have previously written about how we will face a “gas cliff” in 2026 when industrial gas supplies are cut off. This is a crisis for a company that collectively employs 70,000 people and generates an annual R500 billion economy.
This is a crisis that can only be averted through swift, coordinated planning between businesses and governments.
One might have therefore thought that last week's draft Gas Master Plan, gazetted by the Ministry of Mineral Resources and Energy, clearly addressed the impending crisis and set out a credible strategy to avert it.
But while it contains many laudable principles and goals, it does nothing to address the major problems facing the economy. The plan has security of supply as a central objective, modeling impending day zero in an analysis of existing gas sources, but does not set out a clear plan to address it.
The report notes that it is “very urgent” to work with regional gas producers to enable additional supply, but that there is not enough available in time to avoid day zero. We don't really address whether there is enough volume and how we can access it and bring it into the world. Sites that require it.
This is a huge opportunity loss.
A vision for gas supply and development in this country must start with the most urgent needs and plan how the system should evolve from there. Of course, you should not focus entirely on the short term, but develop an overarching vision. In some ways, the plan's long-term vision is sound, but it simply sidesteps the most urgent priorities.
Industrial gas users and governments are grappling with what can be done to avoid Day Zero, and the Master Plan was supposed to be a good opportunity to develop a clear plan to coordinate government and industry efforts. . The fact that it does not gives the impression that the DMRE is not taking the impending crisis seriously enough.
Although this is a draft and will likely be amended to address this weakness, we are only 24 months away from the gas cliff and developing the types of projects needed to avoid it. There is little time left to do so.
This comes after the draft Integrated Resource Plan, a key document for planning the energy system of the future, published earlier this year, also missed the mark. The plan failed to apply the principle of least cost and unfairly increased the price of renewable energy relative to fossil fuels. Companies provided extensive comments on the draft by the March deadline, and we wait to see how the DMRE responds in its next version.
It is very important that the DMRE takes seriously the public comments it receives.
Given how important both the Gas Master Plan and the IRP are to the economy, business voices matter. These two important draft documents appear to ignore the considerable input that has already been given, so naturally no one wonders whether the next version will fail to meet the needs of the economy as well. is concerned.
Unfortunately, as I wrote last month, this lack of responsiveness to views is increasingly noticeable in how the government fulfills its constitutional duty to consult in the policy-making process. It has become a feature.
DMREs must demonstrate that they are committed to getting policy right and are prepared to engage with those affected and take their views seriously. The Gas Master Plan is an opportunity to do that.
Busisiwe Mavuso is the Chief Executive Officer of Business Leadership South Africa. Her weekly newsletter is available on her website at BLSA. News24 encourages freedom of speech and the expression of diverse opinions. The views of columnists published on News24 are therefore their own and do not necessarily represent the views of News24.
