CNBC Africa

Coal to gas shift – a major step toward energy stability in SA

In the step towards energy stability in South Africa – government is presented with a world of opportunities but, how they use them will determine the futures of thousands of South Africans.

In the shift from coal to gas – keeping the existing infrastructure is crucial to avoid unnecessary investments, says Maximilian Niederehe, Business and Solutions Development Manager at Siemens Energy.

There are two steps in the shift from coal to gas, explains Niederehe. “We need to look at the whole energy system a bit differently – and try to use the geographical advantages that some of the locations might have and, bring the power via storages to those points where it’s really required.”

The market exists and, so does the technology – the general question is, who is capable of operating the storage?

Typically, Africa is very good at extracting minerals and then exporting those minerals. Is there an opportunity on this continent for extraction, exploitation and, development, asks The Money Show’s Bruce Whitfield.

“This is something that African governments should be looking at,” says Bhavtik Vallabhjee, Head of Power, Utilities and Infrastructure at Absa Corporate and Investment Banking. “We are blessed with an abundance of resources and, as you quite rightly point out, this is actually beneficiated – manufactured products are actually produced elsewhere.”

Bearing in mind South Africa’s gradual shift away from being a mining economy – to address the country’s high unemployment rate, “we’ve got to look at other ways of actually stimulating our economy,” says Vallabhjee. He believes that government should look at providing incentives to entice foreign investors to set up local factories to create opportunities for South Africans.

On the political perspective – Ted Blom, Power and Mining Expert and Partner at Mining and Energy Advisors, believes that the Mining Charter is an impediment to the hundred years of growth in the mining industry. He says, “with this new mining charter demanding 51% BEE requirements, no organisation can put shareholders’ money into a project where… you’re supplying all the capital but you’re not part of the decision-making process.”

To take a major step toward energy stability in South Africa – Blom encourages the government to restore the playing field and, to give mining companies reasons to reinvest in the country.