Name and Location
Department of Energy (DoE) peaker projects, South Africa.

Client
DoE.

Project Description
The project involves the construction of two greenfield open-cycle gas turbine (OCGT) power plants of 335 MW (Dedisa) and 670 MW (Avon), in the Eastern Cape and KwaZulu-Natal respectively, with a combined capacity of 1 005 MW.

The power generated by the two OCGT power plants will be sold to State-owned utility Eskom under a 15-year power purchase agreement (PPA).

The plants are located adjacent to existing high-voltage Eskom substations, with the electricity being fed into the transmission system at 275 kV and 400 kV respectively.

Each facility will also have on-site fuel and water storage for a continuous 45-hours of full-load operations.

Value
The total investment cost for the two plants is R10-billion.

Duration
Commercial operation is expected to start at Dedisa in 2015 and at Avon in 2016.

Latest Developments
Commercial operation has started at the 335 MW Dedisa peaking power project in the Coega industrial development zone, in Port Elizabeth.

The build, own and operate contract was awarded to a consortium comprising ENGIE (formerly GDF Suez), Legend Power Solutions, Mitsui & Co and the Peaker Trust, which is acting on behalf of the local community.

Together with the R6-billion 670 MW Avon project, near Durban, in KwaZulu-Natal, Dedisa is South Africa’s first large-scale independent power project originated by the DoE.

A consortium led by Ansaldo Energia and Fata of Italy started construction on the Dedisa plant in September 2013.

The project has been a major source of local employment, with a peak of 1 400 workers on site in November 2014. A total of 70% of the workforce employed to build the facility originates from the local communities, with 57% black management and more than 2.3% of the payroll spent on skills development initiatives.

The operation of the plant will also create permanent direct and indirect jobs for the local community.

The Peaker Trust, which owns 10% of Dedisa, will use the dividends it receives from the plant operations to fund socioeconomic development initiatives.

“Looking ahead, I am confident that in the frame of South Africa’s Gas Utilisation Master Plan, we will be bale to convert the Dedisa facility to baseload and combined cycle, as envisaged by the DoE,” Dedisa Peaking Power CEO Arnaud de Limburg has said.

Key Contracts and Suppliers
GDF SUEZ consortium, comprising GDF SUEZ (38%), Legend Power Solutions, of South Africa (27%), Mitsui & Company, of Japan (25%), and the Peaker Trust (10%) of South Africa, representing black economic-empowerment and community interests (build, own and operate contract); Ansaldo Energia and Fata (turnkey engineering, procurement and construction) and Merz and McLellan (owner’s engineer).

On Budget and on Time?
The peaker projects have been subjected to several delays, with the DoE having initially selected an AES-led consortium as the preferred bidder, before terminating talks in April 2008. Negotiations were subsequently launched with the GDF SUEZ-led consortium.

The DoE eventually awarded the contract to the GDF SUEZ.

In June, the consortium signed a 15-year power purchase agreement with Eskom.

Contact Details for Project Information
DoE spokesperson Thandiwe Maimane, tel +27 12 406 7470, fax +27 86 615 6949 or email MediaDesk@energy.gov.za.
GDF Suez, tel +33 1 44 22 66 29 or email ir@gdfsuez.com.
Ansaldo Energia, tel + 39 010 6551 or fax + 39 010 6553411.
Fata, tel +39 011 96681 or fax +39 011 9672 673.
Merz and McLellan, Jo Reeves, cell + 27 76 984 4485