OBG talks to Dipuo Peters, Minister of Energy

Interview: Dipuo Peters

What role will coal play in the country’s future energy mix? How will the mix change over time?

DIPUO PETERS: We acknowledge that our energy mix is at the moment quite fossil fuel-intensive, with more than 85% of our electricity coming from coal. But we are also very cognisant of the fact that we have one of the world’s largest reserves of coal, and that it would be wrong for us as a country to not explore and implement emerging green coal technologies to enable us to better exploit our coal with a reduction in associated greenhouse gas emissions. Our integrated resource plan looks to balance the triple challenges of cost, low carbon emissions and water security. We are targeting to achieve contributions of 42% from renewables and 23% from nuclear power. We are exploring new opportunities for importing cleaner resources from nearby countries with so far untapped production potential, such as hydro from the Democratic Republic of Congo and Zambia, and gas from Mozambique.

In considering renewable energy projects, what are the key criteria for development?

PETERS: Because renewables are for the most part being sought to address a climate change imperative, people sometimes do not realise that there is still a need for a thorough environmental impact analysis as there are many issues, such as the noise of turbines, the glare of solar panels and the impact on nearby bird life, that need to be accounted for. When we initially issued requests for information, we received interest from more than 300 companies for over 20,000 MW of installed capacity. But when we then called for interest for procurement, we only drew interest for 1415 MW of the 3725 MW being advertised. This can only mean that bidders found the technology specifications or the regulatory requirements towards local participation and job creation challenging. And this says to me that we were being properly diligent in our specifications, as if there were hundreds of bidders, it would have meant that we were being too lax in our demands. Most of the areas that have ideal wind and sun conditions for renewable developments are economically depressed, and we want to ensure maximum localisation of the production of components to create as many direct and indirect jobs as possible. Where climate change is concerned, associated damage such as drought is a matter of life and death. We have to ensure we receive the best and most reliable technology. We will continue to remain demanding in our criteria, as renewables are a new field and these projects are of huge importance for the country.

What measures are being taken to boost the country’s refining capacity?

PETERS: I am happy that the president announced in 2012’s State of the Nation address the need to invest further in our energy infrastructure. When we speak of energy infrastructure, we speak of the entire chain ranging from import and storage facilities to transport and the need to invest in the production side of things, as we will continue to import and refine crude, albeit with cleaner requirements. It is important to realise that the majority of our refineries are quite old. While we are asking companies to invest in refurbishing their plants, it is the responsibility of government to invest in the security of supply as we do not want to be found sitting like lame ducks if some of these refineries eventually give in from a lack of maintenance.

As a country, we cannot afford to be dependent on refineries that have only one particular technology in the event of an unforeseen socio-political challenge that makes this technology obsolete and forces the refinery to shut down. The need to diversify our sources of crude creates the opportunity to explore a multi-grade-type of refinery, which is something that we do not have at present. This decision should be seen as a net positive that is not intended to compete with but rather to complement the privately owned refineries. If the private sector indicates a desire to invest in a similar type of new refinery, we are more than willing to talk.