State-owned enterprise Eskom has started the studies into a 2 100 MW integrated gasification combined-cycle (IGCC) power station at the Majuba coalfield, in Mpumalanga, MD for resources and strategy Dr Steve Lennon said on Monday night.

Speaking at the launch of the underground coal gasification (UCG) pilot plant at the Majuba coalfield, which Public Enterprises Minister Alec Erwin officially unveiled, Lennon said that Eskom was working on a business case for a new power station, and that an investment decision could be taken in three years’ time.

The power station, which could cost in the order of R22-billion, could then be commissioned by 2012.

Lennon said that the IGCC gas plant had the potential to produce power at 70% of the cost of a conventional power plant and that the capital cost was also 20% cheaper.

He stressed, however, that UCG technology was still new in South Africa and that the utility would first ensure that it was fully reliable before an investment decision was taken.

ICGG combines UCG technology with high-efficiency gas and steam turbines to yield one of the cleanest coal power generating technologies available, Lennon explained, adding that only a super-critical pulverized fuel plant was a cleaner technology. This was, however, still under commercial development.

UCG-ICGG could reduce greenhouse gas emissions by 25% compared with conventional power stations.

Eskom started producing a small amount of electricity from its UCG process at the Majuba coalfield on Monday night. The first flaring of gas from the UCG pilot project took place on January 20.

The gas produced by the UCG process was generating 100 kV of power, but, through a series of development phases, this technology could be used both for co-firing at the Majuba power station and in IGCC power stations.

The UCG process has the potential to replace up to a third of the Majuba power station's coal needs, which are being met by coal transported from nearby coal mines.

Lennon also noted that, even though Majuba pilot plant was the first local UCG site being developed, Eskom was evaluating a possible 27 other sites to use UCG technology.

He said that there were “a lot” of coal reserves that were not economically feasible to mine, for which the UCG technology could be used. This, effectively, increases South Africa’s coal resources.

Eskom’s resources & strategy division has estimated that there was an additional 45-billion tons of coal, excluding coalfields in KwaZulu-Natal, Ermelo and Witbank, suitable for UCG. This amount of coal equates to 350 GW of electrical capacity, assuming the use of UCG together with combined-cycle gas turbine technology with 50% efficiency and 25 year plant life.

The Majuba plant was the first UCG technology application worldwide since the 1999 commissioning of a pilot plant in Australia, and it has stimulated significant international interest.

Eskom has partnered with UCG technology provider Ergo Exergy, from Canada, to develop the technology for South African application.

Partnering with petrochemicalS companies

UCG is a process where coal is gasified in situ. A matrix of wells is drilled into the coal bed, the coal is ignited and air and water are pumped into the injection wells. This process produces syngas, which can be used directly as a fuel or either boilers or gas turbines.

Lennon said that the process opened up the potential to build a coal-to-liquids plant at Majuba, but he stressed that it was not Eskom’s core business to produce synfuels and that the utility was, therefore, in talks with petrochemicals companies to form a partnership.

For the first phase of the project, which was only producing limited volumes of oil, wax and tar, Eskom had partnered with a small business.