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Medupi to Empower SA’s Economy

Lephalale — The completion of Medupi is expected to grow South Africa’s Gross Domestic Product (GDP) by about 0.35 percent a year, says President Jacob Zuma.

Medupi is a green-fields power plant comprising of six units rated in total of 5764MW installed capacity.

President Zuma has acknowledged that energy challenges faced by the South Africa in recent times has had a negative impact on the economy.

“The shortage of energy does not only cause enormous inconvenience to our people. It is a serious impediment to economic growth,” said President Zuma on Sunday at the milestone official opening of Unit 6 of Medupi.

The GDP growth has contracted by 1.3 percent in the second quarter of 2015 after growing by 1.3 percent in the first quarter of 2015.

Challenges in the energy sector, drought conditions and a weak domestic demand all contributed to the contraction in the GDP growth in the second quarter.

Construction activities at the plant started in 2007 and the station is planned to be fully operational in 2019. Once completed it is expected to the fourth largest coal-fired plant and the largest dry-cooled station in the world.

Medupi was scheduled to be fully online four years ago, but construction has been delayed by labour unrest, leading to spiralling costs running into R105 billion. Unit 6 is expected to add at least 800MW to the struggling national power grid.

The unit was synchronised into the national grid in March and since then it has been undergoing tests.

“… we are pleased that Eskom now fully appreciates the need to move with speed to ensure that there are no further delays at Medupi.”

Government, he said, is continuing to implement measures that will remove all binding constraints in the economy.

“Our major intervention is the Nine Point Plan that was announced in the State of the Nation Address this year. I provided an update recently to the nation on the implementation of the plan, which is informed by the National Development Plan,” said President Zuma after touring the plant.

The plan is aimed at removing constraints and to boost business and consumer confidence, investment and economic growth.

Responding to criticism about why government took the decision to construct new power stations such as Medupi, Kusile in Mpumalanga, and Ingula in KwaZulu-Natal in 2005, the President said before democracy energy like education was structured through racial lines.

Source: allafrica


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Eskom seeks to recoup R38bn through tariff hikes

Johannesburg – State power utility Eskom has asked the national energy regulator Nersa for permission to recoup R38bn of costs incurred in its 2014 financial year through higher electricity tariffs starting April 1 next year.

“If approved, the outcome of this application is expected to impact the electricity price commencing in 2016-17,” acting chairperson Ben Ngubane said in the company’s annual report, released on Tuesday.

The regulator in June rejected a request by Eskom, which is struggling to meet demand in Africa’s most-industrialised economy, to raise prices by as much as 25% for the year to March 2016. The additional funds would have been used to buy power from independent producers and for diesel to fuel generators the utility uses to curb scheduled blackouts.

Electricity prices in South Africa have almost quadrupled since 2007, when the country first had power shortages. Scheduled supply cuts, known as load shedding, have taken place almost once every two days on average this year.

In October, the regulator gave Eskom permission to raise tariffs by an average 13% from April 1, 2015, more than the 8% initially approved, to help the utility recover R7.8bn of unbudgeted costs for the three years through March 2013. The company had applied to recover R18.4bn.

Eskom has struggled to finance new generating capacity and is battling to meet demand after delays in building new power stations and as aging plants suffer from breakdowns.

Kusile, which will have 4 800 megawatts of capacity, making it Africa’s biggest coal-fired power plant when completed, will be fully operational in 2021, while the 4 764-megawatt Medupi facility will be ready in 2019. Both were to be completed by 2018, the company said in 2012.

Source: fin24


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South Africa to liaise with vendor countries to implement energy plan

The South African government has signed agreements with vendor countries to develop its Nuclear New Build Programme and has concluded the pre-procurement phase of the programme.

As part of expanding the nuclear new build programme and developing a sustainable energy mix, the energy department of the South African government has conducted a series of vendor workshops with seven countries namely Canada, China, France, Japan, Russia, South Korea and the USA. These nations use technology that is similar to South Africa, such as the pressurised water reactor nuclear technology, which can be seen at the Koeberg Nuclear Power Plant in Western Cape.

The South African government has signed Inter-Governmental Framework Agreements (IGFA) with Russia, China, France, USA and South Korea, while agreements with Canada and Japan are at an advanced stage and will be completed soon, said government officials.
According to the agreements, each country can contribute to and engage with South Africa’s nuclear new build programme.

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An official from the South African energy department said, “The government continues to make significant progress in its engagements with various prospective nuclear vendor countries as part of the process towards the implementation of the expansion of the nuclear new build programme, as required for energy security based on a sustainable energy mix. The National Development Plan enjoins us to do thorough investigations on various aspects of the nuclear power generation programme before a procurement decision is taken. These policy prescripts are meant to add 9,600MW of electricity to the national electricity grid and ensure that we keep the lights on in a sustainable manner.”

Over the last six months, 80 South African nuclear experts have carefully analysed each technological offering for the vendor countries during the pre-procurement phase. At the end of the process, every vendor country presented unique proposals to implement the nuclear new build programme, which will support the government’s decision to develop a transparent, fair, cost effective and competitive procurement process for selecting a strategic partners to implement the programme.

The procurement process will be presented for approval by the Energy Security Cabinet Subcommittee and endorsed by the Cabinet, with the aim of getting the first unit commissioned by 2023 and the last unit by 2030.

Source: African Review


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Shumba partners SA firm to develop power plant

Shumba Coal has partnered with a South African firm, Mulilo Renewable Project Developments, for the joint development of the Mabesekwa Export Independent Power Plant (MEIPP), which will export power to the neighbouring country.

The MEIPP is a 300 MegaWatt (MW) energy capacity project with a minimum 260 MW net supply to grid after auxiliary and mine consumption.  The project will entail building a coal-fired power plant with a captive coal mine, to take part in the South African Coal Base Load Independent Power Producers (IPP) programme. Last year, South Africa asked IPPs to submit proposals to build coal-fired plants as part of a string of initiatives aimed at ending chronic electricity shortages in that country.

In a statement released on Friday, the two companies noted that within a two month-period following the signing of the Heads of Agreement (HOA), they would enter into a comprehensive Joint Development Agreement (JDA), which shall include detailed conditions of the partnership.

“During this period, the parties will only negotiate exclusively with each other. Additional developments will be forthcoming and shareholders will be kept appraised accordingly,” reads the statement.

Shumba Coal Chairman, Alan Clegg said the agreement is a further development in Shumba energy development strategies. “The signing of this HOA with Mulilo is a further landmark development in Shumba execution of our stated strategy and a further testimony to the discipline of management in matching our assets and projects with the best partners under stressed market conditions,” he said. “Mulilo has a first class track record of delivery which, matches Shumba culture and this I believe will now translate into the creation of a new and strong economic contribution to the Southern African energy market for sustainable development, while creating strong value for our shareholders and all stakeholders alike,” said Clegg.

Mulilo is an IPP developer and investor which was originally formed in 2008 and has developed over the last few years a portfolio of 400 MW of grid-connected power plants under various IPP programmes run by the Department of Energy in South Africa.Shumba Coal intends to develop one or more 300MW or larger power stations in addition to producing coal for domestic and regional consumption. Recently Shumba coal entered into a binding sale and purchase agreement with Daheng Group Botswana for the acquisition of Mabesekwa Prospecting license near Francistown. This was part of its strategy of investing in Botswana based energy projects to supply affordable energy domestically and into the region. Among Shumba Coal energy projects includes 300MW Sechaba energy project near Morupule.  Currently Shumba is in the process of the renewing another prospecting license number that will be finalised by the Botswana Ministry of Minerals, Energy and Water Resources.

Source: Mmegi Online


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