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Eskom gets loan to upgrade its grid

South African utility Eskom has received a R4bn (USD339m) loan from KfW – state-owend German development bank – to help modernise its power grid.

The loan will be used to connect solar and wind power plants to Eskom’s power network and help to secure supply in a country that has been beset with almost daily power outages, KfW said.

“The adjustment of the energy supply is a big step for South Africa away from dependency on coal towards a more sustainable electricity generation,” Norbert Kloppenburg, a management board member at KfW, said in a statement.

Although most loans are paid out in euros or dollars, this one was disbursed in rand, making it the biggest single credit ever granted by the German bank in a local currency to any developing or emerging nation.

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The financial assistance is meant to help South Africa make a quantum leap towards more sustainable and reliable energy supplies in a nation where power outages are a still a common phenomenon.

The money is to go primarily towards hooking up a number of green power stations to the national energy grid, enabling the country to lower its harmful CO2 emissions by 5.5 million tons annually.

KfW indicated the focus would be on integrating the Kiwano solar thermal power station in Upington and the Ingula Pumped Storage Scheme in Braamhoek.

Source: Cape Business News

 

Renewable energy projects benefit South Africa

Renewable energy has benefited South Africa, a study by the Council for Scientific and Industrial Research (CSIR) has found.

The independent study by the CSIR found that renewable energy from the country’s first wind and solar (photovoltaic) projects created R8 million more financial benefits for the country than they cost during 2014.

The study was conducted against the backdrop of the Department of Energy running its procurement programme to expand the generation capacity in the country. It has already procured close to 4 000 MW of renewable capacity (mainly wind and solar) from independent power producers (IPPs).

According to the chief engineer at the Integrated Energy Research Centre at the CSIR, Dr Tobias Bischof-Niemz, the study was based on actual hourly production data for the different supply categories of the power system.

“The benefits earned were two-fold. The first benefit, derived from diesel and coal fuel cost savings, is pinned at R3.7 billion. This is because 2.2 terawatt-hours of wind and solar energy replaced the electricity that would have otherwise been generated from diesel and coal.”

The second benefit of R1.6 billion is a saving to the economy derived from almost 120 hours of so-called “unserved energy” that were avoided thanks to the contribution of the wind and solar projects. During these hours the supply situation was so tight that some customers’ energy supply would have had to be curtailed (“unserved”) if it had not been for the renewables.

“Therefore, renewables contributed benefits of R5.3 billion in total (or R2.42 per kWh of renewable energy), while the tariff payments to independent power producers of the first wind and photovoltaic (PV) projects were only R4.5 billion (or R2.08 per kWh of renewable energy), leaving a net benefit of R0.8 billion,” said the CSIR.

“We’ve developed a methodology at the CSIR Energy Centre to determine whether at any given hour of the year renewables have replaced coal or diesel generators, or whether they have even prevented so-called ‘unserved energy’,” said Bischof-Niemz.

This CSIR methodology was fed with cost assumptions from publicly available sources, such as power utility Eskom’s interim financial results 2014 for coal and diesel costs, or the Department of Energy’s publications on the average tariffs of the first renewables projects, or the Integrated Resource Plan on the cost of unserved energy.

“Our study shows that in 2014, renewable energy provided a net financial benefit to the country. Without the first solar and wind projects, we would have spent significant additional amounts on diesel, and energy would have had to be “unserved” during approximately 120 additional hours in 2014,” said Bischof-Niemz.

“What is more, the cost per kWh of renewable energy for new projects is now well below R1 for solar PV and between 60c – 80c for wind projects. That will keep the net financial benefits of renewables positive, even in a future with a less constrained power system,” he added.

The CSIR is one of the leading scientific and technology research, development and implementation organisations in Africa.

Source: Eprop


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21st Century Coal – Report: International Energy Agency

Green Business Journal 9 (2013)

Coal: currently supplying more than 40 percent of the world electricity consumption, providing an essential 70 percent input of world steel production, and representing approximately 30 percent of the global primary energy supply. Why is coal such a widely utilised resource today? It is cheap, abundant, easily accessible, widely distributed across the globe, and easy energy to transport, store and use. For these reasons, coal is predicted to be used extensively in the future. But, being a non-renewable resource, its production and use inevitably results in various issues across the value chain.

The primary mandate of the International Energy Agency (IEA) is to promote energy security amongst its member countries through collective response to physical disruptions in oil supply, and to provide authoritative research and analysis on ways to ensure reliable, affordable and clean energy for its 28 member countries and beyond.

In doing so, a report was researched and created by IEA which focuses on the technology path to near-zero emissions (NZE). The phrase “21st Century Coal” was adopted by the US and China to describe the importance of strategic international partnerships to advance the development of NZE technology and the report demonstrates the reasons for confidence in coal’s ability to provide a solution to the global objectives of economic sustainability, energy security, and NZE, and is broken up into four areas of consideration.

1. Coal and the CO2 challenge

Discussed here are the benefits of and the need for coal, issues associated with coal use especially related to carbon dioxide (CO2) emissions, as well as roadmaps to improve coal use and continue on a path toward zero emissions. With the increase in the global demand for energy comes the increase in the release of CO2 emissions. The IEA has found that with attempting to mitigate greenhouse gas (GHG) emissions, the costs of achieving climate goals are significantly reduced when carbon-capture and storage (CCS) technologies are implemented. This, along with increasing the thermal efficiency, can effectively lower carbon emissions from fossil-fueled power plants. The development and deployment of advanced coal with CCS technologies that is needed to achieve substantial carbon emission reductions will require extensive research, development, and demonstration investment.

2. Evaluation of advanced coal-fuelled electricity generation technologies

The IEA report provides insights into groundbreaking technology innovations for advanced coal plants to improve efficiency and reduce emissions including CO2. The report finds that there are multiple types of coal-fueled power plant technologies that exist or are being developed, but considerable advancement still needs to take place in this regard. More advanced, future technologies are definitely capable of further improving efficiency. In particular, fuel cells hold the potential of achieving increases in efficiency of up to 60 percent.

3. Carbon capture, utilisation and storage (CCUS)

Focus is drawn to the potential for enhanced oil recovery (EOR) to enable the economic viability of CCS, together with the need for and status of CCUS demonstrations. CCS demonstrations are needed most often on power plants as these plants play major roles in releasing carbon emissions. But, significant government support is needed for these demonstrations to be carried out. The utilisation of enhanced oil recovery (EOR) seems to be the way forward as additional streams of revenue assists the feasibility and capability of the projects. The IEA has found that methods to increase carbon storage in conjunction with EOR may further increase the capacity to store.

4. Flexibility of coal-fuelled power plants for dynamic operation and grid stability

The essential features of fossil fuelled power plants are assessed on their ability to operate dynamically on grids with intermittent wind and solar. Improving the flexibility of existing and developing coal plants can be accomplished through various strategies which involve both technical and operational improvements. These include implementing coal plant flexibility as early in the design process as possible, when it is most effective; optimising use of the capabilities of existing control systems; and collecting and using lessons learned to establish better operating practices.

Conclusions

It is technically possible today to incorporate equipment to capture CO2 in all types of new coal fuelled power plants. Depending on available space and other considerations, such equipment also can be retrofitted to existing coal fuelled plants. The importance of retrofit should not be underestimated based on the large number of new coal units being added.

Unfortunately, today’s CO2 capture technology is very costly. A recent review by the IEA of a variety of engineering studies conducted by a range of organisations that showed the cost of electricity from a new coal power plant with CO2 capture was estimated to be from 40 to 89 percent higher than a new coal plant without CO2 capture.

Ultimately, in order to get over the hurdle and achieve the cost reductions brought by technology maturity, it will be necessary for governments to specifically support CCS demonstration projects with capital grants as well as support for the power prices. Even if additional revenues can be obtained from the sale of CO2 for EOR, they may not be sufficient to allow full financing in all cases.

While coal use remains significant, its continued use has been challenged by growing environmental concerns, particularly related to increases in anthropogenic CO2 emissions. Adding technologies that can reduce CO2 emissions from coal (primarily by using CCS or CCUS) is possible but adds considerable cost, risk, and complexity to coal fuelled power plants, particularly at their current stages of maturity.

Coal remains an important and prevalent fuel for the production of electricity. Its low cost, abundance, and broad distribution make it attractive for power production, particularly in emerging countries such as China and India, where coal fuelled power has increased dramatically in recent years as demand for energy and the higher standard of living it brings have grown along with the population.