ENERGY: Oil, Gas Must Be Developed
Recent Western Cape Business News
THE recent increase in the price of electricity makes it imperative that South Africa develops its off-shore and on-shore gas resources as rapidly as possible, says the Cape Chamber of Commerce.
Jeremy Wiley, President of the Chamber, said a major cost for Eskom was the imported diesel fuel used to generate peaking power in the open-cycle gas turbines at Atlantis and Mossel Bay. Recent problems with the National Grid and the Koeberg Nuclear Power station had meant that these gas turbines, which were planned to run for just an hour or two a day, were running for extended periods at great cost.
He pointed out that energy expert, Prof Philip Lloyd, had calculated that electricity from these gas turbine plants could cost as much as R2 kWh, depending on the price of oil. This is about four times the present unit cost of electricity to commercial users in Cape Town and about 12 times the cost of power from the big base-load coal-fired power stations.
Wiley said South Africa had proven supplies of natural gas off the West coast which the discoverer, Forest Oil, was eager to exploit. In addition the country had big reserves of methane gas in its coal fields but, as far as he was aware, there were no plans to exploit this source at present.
“I have no doubt that using our own gas reserves will bring down the cost of producing electricity at periods of peak demand and that will give us some relief from the kind of tariffs Eskom is now charging.”
He said it was important to be flexible and to act quickly. He pointed out that one of the big advantages of gas power stations was that they could be built and commissioned in very much less time than it took to build the big coal power stations.
He said that both the Atlantis and the Mossel Bay plants could easily be converted to run on natural or methane gas.
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