What South Africa’s gas-to-power setback means for you [video]

South Africa’s gas-to-power programme has hit a major setback.

The government wanted to buy 2,000 megawatts of gas-fired electricity.

Four companies offered more than that.

But not a single project was approved.

The Department of Electricity and Energy and the Independent Power Producer (IPP) Office announced on Wednesday, 28 October, that Bid Window 1 of the Gas Independent Power Producer Procurement Programme (GASIPPPP)had ended without any award of generation capacity.

WHY NO PROJECTS WERE APPROVED

The programme aimed to buy 2,000MW of gas-fired electricity.

By the closing date of 29 May 2026, it had received four bids, offering a combined 2,830MW.

But according to the department, the bidders couldn’t provide assurances of gas supply at the level the programme required.

South Africa imports most of its natural gas from Mozambique, and doesn’t have an operational liquefied natural gas (LNG) import terminal.

‘SOUTH AFRICA IS NOT RETREATING’

Minister of Electricity and Energy Kgosientsho Ramokgopa said the government still plans to pursue gas-to-power.

“South Africa is not retreating from our gas to power objectives.

As the first in Africa to take on this ambition, we are further enabled by this first procurement process to strengthen the conditions necessary to achieve them,” he said.

The department says the process provided practical lessons that will shape how future rounds are structured.

It plans to announce more information before the end of 2026.

The minister had been due to brief the media on the programme at 09:00 on 28 October, but the briefing was postponed.

WHY GAS-TO-POWER MATTERS

Gas power stations can be switched on when they’re needed, unlike solar and wind, which depend on the weather.

That makes gas useful for providing electricity when renewable output falls, or when demand rises, such as during evening peaks.

Earlier in October, Ramokgopa announced plans to procure 5,000MW of gas-to-power and 4,600MW of battery energy storage between 2026 and 2037.

WHAT IT MEANS FOR ELECTRICITY PRICES

For now, the setback won’t directly change your electricity bill.

Electricity tariffs are set by the National Energy Regulator of South Africa, and no gas-to-power plants were ready to supply electricity yet.

However, the cost of future gas-fired electricity will depend heavily on gas prices.

When announcing the new procurement plans in October, Ramokgopa said future bids would be assessed on “fuel availability, delivered gas prices, supporting port and pipeline infrastructure, grid connections and commissioning schedules” together.

WHAT IT MEANS FOR ELECTRICITY SUPPLY

The delay means South Africa will have to wait longer for new gas-fired power.

In the meantime, the government is also procuring battery storage, which can store surplus solar and wind power for use when it’s needed.

DO YOU THINK GAS-TO-POWER IS THE RIGHT WAY TO SECURE SOUTH AFRICA’S ELECTRICITY SUPPLY?