The recent decision by the South African government to double the load factor for future gas-fired power stations — from 25% to over 50% — could put increased pressure on natural gas exploration and supply in Mozambique, particularly in the Pande and Temane regions.
The announcement was made by South Africa’s Minister of Electricity and Energy, Kgosientsho Ramokgopa, during the presentation of Eskom’s winter energy forecast. On that occasion, the minister stressed that the policy adjustment aims not only to respond to an energy supply crisis but also to a structural economic challenge. ‘We are not solving an electricity problem, we are solving an energy and economic problem. We need to respond to pent-up demand for gas,’ he said.
The measure comes at a delicate time for the region, as the so-called gas cliff approaches — a scenario predicted for the end of this decade in which South Africa will face a sharp drop in natural gas supplies as resources from the Pande and Temane fields in Mozambique, currently explored by Sasol, are depleted.
Against this backdrop, negotiations have been underway on alternative supplies, including the construction of liquefied natural gas (LNG) import terminals and new gas pipelines. Two of the main projects under development are located in Maputo, the Mozambican capital, and Richards Bay, in the South African province of KwaZulu-Natal.
By raising the load factor of gas-fired power plants to over 50%, the new energy policy could act as a decisive stimulus for the creation of regional transport and regasification infrastructure. Analysts believe that this level of operation offers a stable demand base, capable of enabling the investments needed to replace Mozambican natural gas with imported LNG.
Ramokgopa stated that the initial proposal of 25% set by the electricity system operator would not be sufficient to boost the sector. ‘I am here to announce a government policy position on gas for electricity production. The load factor is not 25%, it is significantly higher,’ he stressed.
However, doubts remain about the immediate implementation of this guideline. The public tender for the Gas Independent Power Producer Procurement Programme (GASIPPPP), for which the deadline for submitting bids was postponed from March to 31 October this year, is still based on flexible generation rather than the new intensive operation model. This could lead to legal challenges from competitors who prepared their bids based on the conditions initially set.
On the other hand, the financial implications of this change, namely the costs for end consumers of electricity, have not been disclosed. These figures should be made public, as they will have to be recovered through Eskom’s tariffs as long as the current tariff model remains in place.
Ramokgopa also indicated that there will be changes to the electricity pricing policy, with a focus on affordability, although no specific timelines or mechanisms were specified.
For Mozambique, South Africa’s new energy policy represents both a threat and an opportunity. On the one hand, it could accelerate South Africa’s transition to imported LNG, reducing its direct dependence on the Pande and Temane fields. On the other hand, it could also position Mozambique as a regional logistics and energy hub through the development of infrastructure in Maputo to serve both the domestic market and neighbouring countries.
Source: Engineering News
