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City and USTDA sign ZAR12,7m agreement for gas distribution network study
15 July 2018
Statement by the City’s Executive Mayor, Patricia de Lille
On Thursday, 14 June 2018, the City of Cape Town marked an exciting occasion with the signing of a grant agreement with the US Trade and Development Agency (USTDA) for a feasibility study to assess the viability of a natural gas distribution network and usage options for the City.
The Consul General of the United States, Virginia Blaser, and I signed an agreement which holds very exciting possibilities for the city and its residents.
This grant of US$963 684 (just over R12,7 million) from USTDA for the feasibility study regarding the use of natural gas in our city will strengthen our efforts to reach our goal for providing a greater mix of energy sources to offset the use of fossil fuels in producing electricity.
‘The United States Government is pleased to continue our long-standing partnership in economic growth and development with the Western Cape Province and Cape Town. As the US Consul General to the Cape Provinces, I’m proud Americans are working with South Africans to find innovations, resources, and opportunities toward creative solutions in the region. I also commend one of our smallest and most dynamic US Government agencies, USTDA, for heading this key collaboration for the American people,’ said Consul General Virginia Blaser.
Our Mayoral Committee has also expressed its appreciation for the support from the United States Government as the funding would make it possible for the City to broaden its energy usage options.
This grant is in line with our resource efficiency goals as outlined in the Organisational Development and Transformation Plan where we are looking at various ways to diversify our energy mix and reduce our over reliance on coal.
I am very excited about this work as the City is looking to pioneer a new approach with regard to energy and the role of cities, particularly in South Africa.
It is our intention to play a greater role in fostering a dynamic energy market and this study will help us understand the role that gas can play in supporting such a market.
It is clear that gas can play a complementary role to renewables in helping us balance the load and reduce our carbon emissions.
This grant will allow us to undertake a study to assess the technical, economic and financial viability of a natural gas distribution network, along with usage options for gas such as the repowering of existing power plants in Cape Town.
The estimated completion date for the study is early 2019 and I look forward to the results with great anticipation.
This study is indeed aligned to the City’s Action Plan for Energy and Climate Change and Cape Town Energy2040 Vision that set out plans toward a low carbon emissions City for the future.
It is in this regard that alternative options for cleaner energy supply within the City should be sought. The target of at least 300 MW from natural gas or cleaner supply options for electricity generation has been set for 2020 as part of our goal to have at least 20% of our energy mix from renewables.
Last year the City also decided to divest from fossil fuel assets and companies in favour of greener and cleaner investments which are in line with our vision of a sustainable future.
We have also taken the Minister of Energy and NERSA to court to fight for our right to procure clean energy directly from independent power producers.
Apart from the City and USTDA, other role-players for the study include GreenCape in an advisory role; the Western Cape Government, who are participating in a similar study also funded by USTDA and the aim is to coordinate efforts with the view for the two studies to complement each other; and finally, Featherwood Capital LLC as the contractor as approved by the USTDA to conduct the study with the City.
Featherwood Capital LLC has extensive knowledge of the North American and international liquefied natural gas (LNG) and liquefied petroleum gas (LPG) industries as well as the natural gas transportation and distribution markets.
The firm has also successfully permitted onshore and offshore North American LNG facilities and has extensive knowledge of the regulatory and commercial challenges facing prospective facilities.
Once again, I express our thanks to the USTDA for this grant and we are very hopeful that it will assist us in giving residents a greater choice over the types of energy they use and how much they pay for it.
