Alstom Signs $2 Billion Contract for Mega-Coal-Fired South African Power Station as Supply Shakeout Continues

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Researched by Industrial Info Resources (Sugar Land, Texas)--At a time when major South African industrial and commercial electrical power consumers are in talks with independent power project and packaged power set promoters to bridge immediate supply shortages, the country's power utility Eskom (Johannesburg) is moving ahead with its large midterm and long-term project plans. At the same time, the state-owned generator speaks with a forked tongue on priority power allocations and the passing of plans for new power-dependent industrial and commercial projects. Supply to key industries has crept up to 95% of normal demand, but companies are living under tight margins as witnessed by BHP Billiton (NYSE:BHP) (Melbourne, Australia) planning for the possible close-down of two pot lines at one of its aluminum smelters.

The sky is bluer for equipment supply companies such as France's Alstom, which is bagging contracts for new mega-coal-fired power stations and for the refurbishment and enhancement of previously mothballed power plants. The company has signed a $2 billion contract for generating equipment for the Bravo 4,740-megawatt (MW) project in the eastern province of coal-rich Mpumalanga. In November 2007, Alstom signed a similar contact for the 4,200 MW Medupi coal-fired power station in the northeastern province of Limpopo.

In the Bravo contract Alstom will supply six 790 MW steam turbine and turbogenerator packages for the supercritical plant, which will be fed with pulverized coal. The contract also covers the supply of six air-cooled condensers and related auxiliary equipment plus associated erection and commissioning services.

In 2006 the company won Eskom contracts to refurbish the 2,100 MW Arnot coal-fired plant and to add 300 MW of capacity to the power output. Alstom is also working on the return to service the mothballed Grootvlei and Komati power plants, which together will add 2,161 MW to the grid by 2010.

"Our equipment is being used in about 80% of existing power stations in South Africa, providing us with crucial local experience," Said Philippe Joubert, Executive Vice President and President of Alstom Power Systems.

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