Eskom to Develop Its Own Gas-Fired Plants
By Anonymous
Hot on the heels of the decision to proceed with the construction of an 800MW gas fired plant in Namibia, South African power giant Eskom has announced that it intends to build its own gas fired plants. While the Namibian plant, which is to be developed by Irish firm Tullow oil and Gas as part of the Kudu project (see African Business October 2005 issue) is to employ combined cycle gas turbines, Eskom has opted for open cycle gas turbine (OCGT) technology in its new plants.
Thulani Gcabashe, the chief executive of Eskom, revealed that two 525MW capacity plants will be constructed at Mossel Bay and at Atlantis, a site north of Cape Town. Both will be supplied by gas from Mossel Bay and it is hoped that they can be brought on stream by 2007, at least one year earlier than the Kudu facility.
Two additional 525MW gas fired plants could be developed as independent power producers (IPPs) at Durban and the new Coega industrial zone near Port Elizabeth. Any IPP would be expected to offer a large stake in each venture to black empowerment interests.
Emerging markets specialist Globeleq is one of the most likely investors, particularly as it has just completed the expansion of another gas fired IPP, the Ubungo plant in Tanzania.
South Africa’s Department of Minerals and Energy has revealed that the company has already expressed an interest in the two tenders – alongside Alstom, Mitsubishi, Siemens and Shell. Eskom is to offer a 15-year power purchase agreement (PPA) to the successful bidder.
After many years with little development of new plants in the country because of Eskom’s excess generating capacity, the company now plans to add 4,00OMW of new capacity by 2009. One mothballed coal fired plant, Camden, has already been brought back on stream, while two others, Grootvlei and Komati, are set to follow suit.
Eskom has traditionally relied on coal fired plants to generate electricity as a result of a combination of plentiful domestic coal reserves and the apartheid era policy of minimising the country’s energy imports. Now, however, the government wants the state owned company to spread its generation mix in order to tackle South Africa’s serious air pollution problems and to cut emissions of greenhouse gases.
Some investment is being made into renewable energy projects but, while this sector could become more important in the years to come, it is unlikely to make more than a minor contribution to providing the extra 4,000MW of generating capacity.
Progress on developing the pebble-bed modular reactor (PBMR) test unit at Koeberg has been slow and so no new nuclear capacity is likely to be added within the next five to 10 years. The potential for further hydroelectric plants in the country is limited and Eskom’s plans for large hydro schemes on the Congo will take a long time to come to fruition, if ever.
The company therefore seems to have two choices with regard to boosting electricity supplies: gas fired facilities or more efficient, cleaner coal fired plants.
While electricity generated by coal fired plants is still cheaper than power from gas plants in South Africa, the country’s coal fired plants are located far from the Cape Town area. As a result, some electricity is lost in transmission over large distances and so Eskom has opted to develop the two gas fired plants in that region.
Copyright International Communications Nov 2005