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Released July 22, 2016 | SUGAR LAND
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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--South Africa's power generation is heavily coal based but is evolving toward lower carbon technologies. According to the Statistical Review of World Energy by BP plc (NYSE:BP) (London, England), in 2013, 72% of the country's total primary energy consumption came from coal, followed by oil (22%), natural gas (3%) and nuclear (3%) and renewable (less than 1%, primarily from hydropower), said Lynn Brown, South Africa's minister of public enterprises in a keynote address at PowerGen & Distributech Africa 2016 in Johannesburg.
A fact sheet published by South Africa public utility Eskom in 2014 indicates that more than 85% of South Africa's installed electricity capacity was from coal-fired power stations, 10% hydroelectric plants, 4% nuclear and 1% non-hydro renewable energy. The 2016 Africa Report reports the price of electricity in the country in U.S. cents per kilowatt hour (kWh) is the cheapest in Africa and 15th cheapest in global rankings, according to a 2015 World Atlas, said the minister.
South Africa operates in a challenging environment as the country tries to ensure that its energy supply keeps pace with demand while mitigating against vulnerability of a power deficit that could constrain growth. To increase electricity generation capacity several mothballed plants were returned to service and two new, 4,800-megawatt (MW), coal-fired plants--Medupi and Kusile--were approved for construction, and Medupi Unit 6 is already contributing 800 MW to the national grid.
Gas reserves will be exploited for regional benefit as gas is not only lower in carbon but is also more flexible and can be used to mange demand and is an ideal partner for renewable energy. The development of gas infrastructure in the region will pave the way for any future developments in shale gas.
Eskom is currently evaluating the conversion of existing open-cycle gas turbine plants to gas as a second source of fuel.
Despite these expected improvements, studies conducted for the country's Integrated Resource Plan for Electricity (IRP) 2010 -- 2030, indicate that by 2030, the country could have a power supply gap of 6 MW to 10 MW, due to a combination of shutting down aging coal plants and reliability challenges in older generating plants.
Peak demand is expected to increase by 11 MW to 18 MW, and an estimated 14.4 GW of aging coal capacity is scheduled for decommissioning over the same period.
The role of renewable energy in South Africa's long term plans in the IRP envisages that 9.2 GW will be generated from wind, 8.4 GW from photovoltaic (PV) solar panels and 1.2 GW from concentrated solar power (CSP).
The push for increasing market influence into electricity network, especially through the mechanisms of privatization and public-private partnerships call for an increased introspection into the demand and supply networks the country's utility and an ongoing assessment of the structure of Eskom.
The renewable energy independent power producer (IPP) program has been hailed for its success but at the same time highlights constraints on the alignment of the grid to renewable energy sources, Brown said.
"We are learning that the grid in the areas that are optimal for wind and solar energy production are becoming increasingly constrained. Major investment is required in the transmission grid in order to sustain the connection of renewable energy plants in these areas," Brown said.
In the northern Waterburg coal region, a major high voltage, direct current (HVDC) grid connection has been identified as a likely prerequisite for unlocking further large scale power generation in that area. The HVDC system is estimated to cost over $900 million.
Speaking on the options for coal and nuclear sourced base power the minister said, " There has been significant debate on the current and future costs of both these technologies. There is growing consensus that future cost comparisons will swing in favor of nuclear given increasing coal-fired plant costs associated with more stringent emission limits and the introduction of carbon taxes."
Brown announced that Eskom will establish a Specialization Center focusing on nuclear engineering and technology. The center will have a dedicated director and partnerships with reputable international universities.
Response from the market to the government's request for the gas power program during 2015 was encouraging. Approximately 57% of the responses were for imported gas, primarily in the form of liquefied natural gas (LNG); 23% were for liquid-fueled, short-term power projects. The total capacity of the projects was 105 GW of new power generation, with 14 GW of short term generation capacity.
Research and developed to address current challenges must be intensified. The research must be conducted through collaborative networks of research institutions that bring business and the public sector together, leading to:
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
A fact sheet published by South Africa public utility Eskom in 2014 indicates that more than 85% of South Africa's installed electricity capacity was from coal-fired power stations, 10% hydroelectric plants, 4% nuclear and 1% non-hydro renewable energy. The 2016 Africa Report reports the price of electricity in the country in U.S. cents per kilowatt hour (kWh) is the cheapest in Africa and 15th cheapest in global rankings, according to a 2015 World Atlas, said the minister.
South Africa operates in a challenging environment as the country tries to ensure that its energy supply keeps pace with demand while mitigating against vulnerability of a power deficit that could constrain growth. To increase electricity generation capacity several mothballed plants were returned to service and two new, 4,800-megawatt (MW), coal-fired plants--Medupi and Kusile--were approved for construction, and Medupi Unit 6 is already contributing 800 MW to the national grid.
Gas reserves will be exploited for regional benefit as gas is not only lower in carbon but is also more flexible and can be used to mange demand and is an ideal partner for renewable energy. The development of gas infrastructure in the region will pave the way for any future developments in shale gas.
Eskom is currently evaluating the conversion of existing open-cycle gas turbine plants to gas as a second source of fuel.
Despite these expected improvements, studies conducted for the country's Integrated Resource Plan for Electricity (IRP) 2010 -- 2030, indicate that by 2030, the country could have a power supply gap of 6 MW to 10 MW, due to a combination of shutting down aging coal plants and reliability challenges in older generating plants.
Peak demand is expected to increase by 11 MW to 18 MW, and an estimated 14.4 GW of aging coal capacity is scheduled for decommissioning over the same period.
The role of renewable energy in South Africa's long term plans in the IRP envisages that 9.2 GW will be generated from wind, 8.4 GW from photovoltaic (PV) solar panels and 1.2 GW from concentrated solar power (CSP).
The push for increasing market influence into electricity network, especially through the mechanisms of privatization and public-private partnerships call for an increased introspection into the demand and supply networks the country's utility and an ongoing assessment of the structure of Eskom.
The renewable energy independent power producer (IPP) program has been hailed for its success but at the same time highlights constraints on the alignment of the grid to renewable energy sources, Brown said.
"We are learning that the grid in the areas that are optimal for wind and solar energy production are becoming increasingly constrained. Major investment is required in the transmission grid in order to sustain the connection of renewable energy plants in these areas," Brown said.
In the northern Waterburg coal region, a major high voltage, direct current (HVDC) grid connection has been identified as a likely prerequisite for unlocking further large scale power generation in that area. The HVDC system is estimated to cost over $900 million.
Speaking on the options for coal and nuclear sourced base power the minister said, " There has been significant debate on the current and future costs of both these technologies. There is growing consensus that future cost comparisons will swing in favor of nuclear given increasing coal-fired plant costs associated with more stringent emission limits and the introduction of carbon taxes."
Brown announced that Eskom will establish a Specialization Center focusing on nuclear engineering and technology. The center will have a dedicated director and partnerships with reputable international universities.
Response from the market to the government's request for the gas power program during 2015 was encouraging. Approximately 57% of the responses were for imported gas, primarily in the form of liquefied natural gas (LNG); 23% were for liquid-fueled, short-term power projects. The total capacity of the projects was 105 GW of new power generation, with 14 GW of short term generation capacity.
Research and developed to address current challenges must be intensified. The research must be conducted through collaborative networks of research institutions that bring business and the public sector together, leading to:
- Decentralized electrification solutions to reach rural areas and energy affordability
- Efficient transmission infrastructure to enable the evacuation of power to load centers across the continent and to encourage new investment
- Storage technologies that facilitate the introduction of intermittent supply technologies
- The reduction of the environmental impact of energy resource extraction, infrastructure development and operations
- Smart grid technologies in order to leapfrog current energy infrastructure requirements and constraints
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
