X

This is not a paywall.

Register for free to continue reading.

We made a promise to you that we’ll never erect a paywall and we intend to keep that promise. We also want to continually improve your reading experience and you can help us do that by registering with us. It’s quick, easy and will cost you nothing.



Nearly there! Create a password to finish up registering with us:


Please enter your password or get a login link if you’ve forgotten


Open Sesame! Thanks for registering.

‘Gas is going to be a game changer in the economy,’...

Our Burning Planet

BUDGET VOTE DEBATE

Mantashe: ‘Gas is going to be a game-changer’ – opposition disagrees

Mineral Resources and Energy Minister Gwede Mantashe. (Photo: Gallo Images / Netwerk24 / Felix Dlangamandla)

During his Budget Vote speech on Thursday, Minister Gwede Mantashe outlined key initiatives and programmes of the Department of Mineral Resources and Energy for the 2022/23 financial year.

‘The outcry that we are not addressing the shortfall of 4,000 to 6,000 [megawatts] of Eskom is not backed by facts,” said Minister of Mineral Resources and Energy Gwede Mantashe during the Budget Vote speech for his department in a mini-plenary of the National Assembly on Thursday. 

“We’re giving you the fact that these projects are in the pipeline,” said Mantashe, citing how the Department of Mineral Resources and Energy (DMRE) was finalising requests for proposals for the procurement of an additional 13,000 megawatts (MW) of energy in this financial year.  

Mantashe addressed South Africa’s energy crisis, which was constantly brought up by opposition parties during the mini-plenary. 

He acknowledged that despite his department’s “various intervention measures, load shedding is commonplace, adversely impacting mining production and the economy broadly.” It was, he said, “a negative sector in the economy”. 

He was quick to remind the National Assembly that Eskom “remains the primary generator of electricity”.  

And therefore, every project that we’re putting in place is supplementing what should be the performance of Eskom, which has a connected capacity of 45,000MW, but hardly works and operate[s] optimally, even at 30,000MW.” 

Mantashe also outlined key initiatives and programmes for the 2022/23 financial year. 

The Crisis: Water Armageddon loading as Day Zero looms for Nelson Mandela Bay

Oil and gas

The minister strongly supports gas as a driver for the economy, stating: “If we are going to develop fully, we cannot write off and kill prospects of gas and oil development before it even starts.”  

He said the Council for Geoscience had confirmed the verification of the Karoo shale gas samples that had been tested internationally, which meant that: “Shale gas deposits in the central Karoo are a reality and they are economical. Gas is going to be a game changer in the economy. And we appreciate the fact that even the EU now is labelling gas and nuclear as part of the green transition.” 

Mantashe noted that the Upstream Petroleum Resources Development Bill had been tabled to Parliament and that iGas, a subsidiary of the Central Energy Fund, had acquired an additional 40% ownership of the Rompco pipeline, which transports gas from Mozambique to South Africa.  

A gas master plan was at an advanced stage of development, he said.  

Gas opposition

Mantashe acknowledged that there were people opposed to gas projects, saying opponents were “well-funded lobby groups, which also misinform unsuspecting communities”.

In response to this opposition, Mantashe said, the DMRE had been engaging with communities to inform them of its plans for gas exploration.  

“We, since February, therefore consulted some traditional councils in the Eastern Cape to help them understand the possible benefits of the upstream petroleum industry on their communities and our economy in general.” 

He added that the department intends to engage more with traditional leaders and communities. 

Nuclear

Mantashe said the DMRE was addressing the suspensive conditions from the energy regulator, Nersa, on a section 34 determination, which will ensure that the procurement of 2,500MW of nuclear energy is completed by 2024.  

“The department will continue to exercise oversight on the Eskom implementation of [the] Koeberg Nuclear Power Station Long-Term Operation to ensure the security of the energy supply for an additional 20 years. 

“That project is important to us. But there are some noises that are trying to resist it. But we have a responsibility to drive it through. That problem of nuclear waste remains a global problem, and we must resolve it.” 

The budget

“We are running a tight ship,” said Mantashe, laying out where the DMRE’s budget of R10.4-billion for the 2022/23 financial year will go. 

Nearly 80% of it, or R8.3-billion, is earmarked for public entities, municipalities and other implementing institutions – R5.7-billion will go to Eskom and municipalities for the implementation of the Integrated National Electrification Programme. 

This year’s budget is 1.4% higher than the budget for the previous financial year, which Mantashe said was necessitated by information and communication technology costs to help backlogs in the processing of mining licence applications as well as funding for independent power producers’ offices.

Opposition parties wade in

After the minister’s Budget Vote speech, members of the National Assembly had their say. 

Regarding South Africa’s energy crisis, Kevin Mileham from the DA said: “They say that insanity is doing the same thing over and over and expecting different results. And yet, that is exactly what we keep doing.”  

Mileham argued that solutions lay in updating the Integrated Resource Plan (which last came out in 2019 and is meant to be updated every two years) and getting more energy on the grid (through incentivising investment in renewable energy and cutting red tape that slows the roll-out of sub-100MW generation.) 

“I’m not suggesting we shut down Eskom’s plants,” said Mileham. “I’m saying we need to supplement the supply we received from Eskom so that they don’t need to run those plants so hard and to have a chance to build up reserves.” 

Phiwaba Madokwe from the EFF said the party rejected the budget vote for the DMRE and that it had “failed miserably”.  

“We’re being asked today to approve a budget that is clearly aimed at giving this country false hope and encouraging more taxpayers’ money to be pumped into the department with little accountability and consequences,” said Madokwe. 

In response to this criticism, the ANC’s Valentia Thokozile Malinga, who serves on the portfolio committee for mineral resources and energy, said: “Opposition parties like the DA and the Freedom Front Plus will never accept that market fundamentalism diverts finance from investment in productive activities that could mitigate most of the challenges facing Eskom today.” 

The ANC’s Matthews Wolmarans said: “The DA is nothing but a lobbying vehicle used by the industries that prospered under apartheid to continue to hold sway in the democratic South Africa.” 

Wolmarans compared the DA’s confidence in renewable energy to the economist Ha-Joon Chang’s parable that the kung fu masters he looked up to as a child were actually suspended by piano wires. 

However, both Wolmarans and Mantashe were encouraged by and accepted DA member Mileham’s offer to discuss the energy crisis together. 

“As a starting point, Minister, let’s have lunch,” Mileham said, “a long lunch, where we set aside politics and ideology and map out a plan to fix our electricity crisis. I’ll even pick up the bill, but I do expect you to clear it in your members’ interests.” DM/OBP

 

 

Gallery
Absa OBP

Comments - share your knowledge and experience

Please note you must be a Maverick Insider to comment. Sign up here or sign in if you are already an Insider.

Everybody has an opinion but not everyone has the knowledge and the experience to contribute meaningfully to a discussion. That’s what we want from our members. Help us learn with your expertise and insights on articles that we publish. We encourage different, respectful viewpoints to further our understanding of the world. View our comments policy here.

All Comments 5

  • The ANCs usual and oh so predictable blaming everything on apartheid continues even in light of absolute proof that it was years of mismanagement, corruption and dismal foreplanning all thanks to the ANC that brought us to this place.

  • Dr Clyde Mallinson was interviewed by Stephen Grootes yesterday on SAFM and summed-up succinctly what is needed for additional elec capacity. If SA had started this two years ago the loadshedding would be on its way out. Listen to the experts Mr Mantashe – not the invested interests of your friends. More oil and gas will take years to get on stream. Besides which, ITS WHAT IS KILLING THE PLANET THAT YOU AND I AND FUTURE GENERATIONS LIVE ON.

    • 100%

      “Listen to the experts Mr Mantashe”, it is not a weakness.

      It is good leadership to acknowledge skills and empower them.

      Besides being the right thing to do, you will find it makes your life a lot easier.

  • “Procurement of 2,500MW of nuclear energy is completed by 2024”. If Mantashe had any idea about nuclear that means it’ll be up and running by 2034 IF we’re lucky. Considering what happened with Mudipi and Kusile, more like 2044.

    While solar doesn’t contribute as effectively towards baseload, it can be build a lot quicker and we could use it as our primary driver during the day. And I mean, it’s obvious: the sun is free. But you don’t get the kickbacks you do from tearing up the earth to get to gas and oil.

  • There is a story about a monkey that had a problem with his tail. It was determined that the only way to fix it was to cut his tail off. Someone took the monkey to the back to do this. There was a great wailing. This stopped, and then started again. The wailing was repeated a number of times. When the person returned from the back the others asked him why it took so long. His response was that he did not want to hut the monkey too much so he only cut off an inch at a time. Minister Mantashe is proposing the same progressive strategy with the gas intermediate steps instead of taking the pain once to get rid of fossil fuels.

  • Please peer review 3 community comments before your comment can be posted