Green independence

1st April 2022 By: Terence Creamer - Creamer Media Editor

Green independence

Policymakers should not misread the admittedly confusing energy market signals that have arisen since Russia’s invasion of Ukraine.

The confusion has been driven largely by the scramble under way within Europe to wean itself off Russian energy faster than initially planned, which has led to discussions about more immediate reliance on coal and nuclear and has emboldened those keen to revive the exploration and development of conventional and shale gas.

There are already indications that some South African officials are interpreting these crisis-induced reactions as a signal that investments in new domestic coal and gas exploration and development, as well as crude oil refineries, should be given priority over renewables.

It should be recognised, however, that Europe is making immediate energy decisions amid intense political pressure for an immediate halt to Russian coal, gas and oil imports; calls that at the time of writing had been largely rebuffed on the basis that it made little sense to act in a way that would hurt European citizens more than Russian President Vladimir Putin.

It should also be recognised that the European Commission’s official response plan underlines the need for an accelerated renewables roll-out to bolster long-term energy independence, while seeking to immediately diversify gas supplies, speed up the roll-out of renewable gases and replace gas in heating and power generation.

The ‘REPowerEU’ plan, the commission argues, will result in the gradual removal of about 155-billion cubic metres of fossil gas use, which is equivalent to the volume imported from Russia in 2021. Full implementation of the plan will reduce European Union demand for Russian gas by two-thirds before the end of the year and eliminate the bloc’s dependence on Russian gas before 2030.

What should South Africa take away from these developments?

Firstly, the country should also be ramping up the pace of its renewables deployment as the first and main pillar of its own energy independence strategy. True, coal has played this role quite effectively in the past, but there is no longer finance available for new coal power and definitely not for coal-to-liquids projects.

Secondly, the accelerated renewables roll-out should be coupled with a massive investment in the electricity grid so that any surplus power produced at times of low consumption can be used easily to replenish pumped-storage schemes and recharge utility- scale batteries to help stabilise the electricity system during low- production periods and to reduce diesel generation.

Thirdly, South Africa should be planning for an oversized renewables roll-out to support the electrification of other energy services, including mobility. This additional electricity can be used directly by electric vehicles, or indirectly through the production of green hydrogen.

Besides the energy independence this would deliver, South Africa could also begin the process of building a new export industry based on green hydrogen, the demand for which is set to grow faster than initially anticipated as European countries seek renewable gases to replace Russian gas.