Gas could mitigate S.Africa's electricity crisis: report

Johannesburg (AFP) - Natural gas power generation should be prioritised to help tackle South Africa's dire energy crisis that has hobbled growth and led to rolling black-outs, said a report released Tuesday.

Africa's second biggest economy relies on coal for most of its electricity and has plans to expand its nuclear capacity.

But consultancy firm McKinsey & Company projected that South Africa will suffer continued power deficits for decades as old coal plants are decommissioned and as electricity demand grows.

It said that the regular power cuts endured by many factories, office and houses are likely to worsen in the long term.

"South Africa is facing an emerging energy supply gap after 2020," said the report. "Natural gas could play an important role in bridging this gap."

The report said the country's two largest coal stations, Medupi and Kusile, which have a combined capacity of 9.6 gigawatts, would be unable to cope.

Offshore gas discoveries in Mozambique were cited as a key import source, as well as unexplored shale deposits in South Africa's arid Karoo region in the Northen Cape province.

"We estimate that South Africa could install up to 20 gigawatts of gas-fired power plants to diversify base-load capacity by 2030," said the report.

"Gas can be provided through imports, local shale gas resources (if proven), or both."

South Africa's shale gas exploration has been dogged by environmental controversy and delays in granting licences.

South Africa imports 77 percent of its natural gas from Mozambique, and has one gas-fired power station owned by petroleum giant Sasol.

Half of its output is fed into the national grid, and the rest used by the company.

The report cautioned that shale was likely to be expensive in the early development phase.

Unreliable electricity supply has been one factor behind South Africa's poor GDP -- languishing at 1.3 percent in the second quarter of 2015.

The first of six Medupi power station units, under construction since 2007, officially opened on Sunday. The facility is expected to bring some much-need relief to constrained supply.