366

Gas-fuelled power projects have an important role to play in Africa, according to African Energy Live Datas figures. The Africa-wide database lists 313 operating gas-fired plants, with 84,226MW of installed capacity; another 39 plants are under construction (with total 32,933MW capacity) and 156 are planned (66,921MW). The majority are utility-scale facilities supplying national grids; Live Data records 206 of these as operational (75,487MW), 33 under construction (28,754MW) and 119 planned (58,061MW). Such numbers give credence to arguments that gas, imported or monetised from domestic reserves that were previously often flared, is the ‘transition fuel’ to balance the energy mix as oil- and coal-driven economies are replaced by renewable energy.

Unsurprisingly, the major gas-producing regions of North and West Africa lead the way, though Nigeria’s problems meeting domestic demand for gas continue to undermine its ability to boost grid power supply (AE 365/1, 365/3).

In Southern Africa – where Live Data records 11 plants as operating (958MW), three under construction (960MW) and 16 planned (4,166MW) – Cyril Ramaphosa’s presidency is expected to fast-track South Africa’s stalled gas independent power project, which ran contrary to former president Jacob Zuma’s favoured nuclear power plans.

The region will receive a boost from decisions on huge gas developments offshore Mozambique (and, perhaps eventually, Tanzania). Ministry of Energy national director of energy Pascoal Bacela told a conference in Johannesburg in February that “by 2022, the southern part of Mozambique will have installed capacity of more than 800MW all run by gas”.

Gas can fuel generation away from national grids. Live Data records 49 operating off-grid plants fuelled by gas (1,388MW installed capacity); one 48MW plant is under construction and at least eight more are planned (221MW). Also growing is ‘embedded power’, by which generators sell electricity to a third party which is also connected to a national or regional grid. Live Data records 29 embedded schemes as operating (1,945MW), one under construction (140MW) and 12 planned (3,168MW).

Hydrocarbons majors such as BP, Engie, Eni (AE 362/14) and Royal Dutch Shell are piling into renewable projects, persuaded by the ever more favourable economics of solar, wind and (eventually) storage. But while their traditional crude oil and products businesses are under pressure, they are all focused on developing gas. BP’s head of international gas, David Knipe, told a Natural Resources Forum event in London on 13 March that gas would represent 60% of BP’s portfolio by 2025; six of the seven major projects BP completed last year were gas-related.

Timetables may have slipped, but Morocco’s ambitious plans to import 5bcm-10bcm/yr of liquefied natural gas – to supply new combined-cycle gas turbine (CCGT) units and industrial users, while also balancing a grid slated to receive ever larger amounts of renewable energy – highlight the transition fuel’s appeal. In many countries, progress on new gas-fired units is slow. Outside North Africa – where Algeria’s Sonelgaz is building new CCGT units with GE and Siemens – Live Data records 18 gas-fired projects coming online in 2016 (with total 6,069MW capacity).

Other issues can upset plans. According to Oxford Institute of Energy Studies research fellow Jonathan Stern, viewed from Europe, most opinion outside the industry fails to see gas as the ‘transition’ or ‘destination’ fuel. Rather, “gas is still a fossil fuel and [carbon capture and storage] CCS is not making much progress… Methane emissions are a serious problem,” he said. Imported gas was linked to energy insecurity and most projects’ “lack of an employment connection”.

Stern also noted that obtaining cooperation along the value chain could be “very difficult, if not impossible, given differing commercial interests”. Stern raises undoubted concerns for developed economies and emerging markets. But such issues need not derail well-crafted projects – provided the economics and strategic planners’ ies are properly aligned.