Although South Africa has, historically, relied quite heavily on coal generated power, Malan believes that, at the rate at which technology is progressing, coal will be replaced globally by cleaner forms of generation in a much shorter time span than most people predict – perhaps even within the next 30 years.
He warns that South Africa should begin to prepare for this by supplementing or supplanting future coal build with the development of gas-based infrastructure while continuing to encourage independent power producer (IPP) projects.
“The ideal situation would be for IPPs to focus on power generation – using whatever competitive technology is at their disposal – while State-owned power utility Eskom focuses on transmission. The utility could consider borrowing from concepts used in the US natural gas industry, where a fixed fee is charged for transmission, which might be based on distance to offtake. Municipalities and/or private entities could then be responsible for distribution.