Jun 18, 2010
Eskom hopes to complete concentrating solar power project by 2014Back
Construction|Engineering|Africa|CoAL|Eskom|PROJECT|Projects|Renewable Energy|Renewable-Energy|Resources|The International Bank|Water|Africa|South Africa|USD|CSTP Plant|Medupi Power Station|MW CSTP Plant|Applicable Technology|Bank|Building|Chosen Site|Cleaner Technologies|Energy|Maintenance|Power Generation|Power-generation|Technology|Technology Assessment|Technology Strategy|Well-informed Buyer|Environmental|Barry MacColl|Power|Water|Heat Transfer
© Reuse this
The ambition is to have the CSTP plant completed by the end of 2014.
The World Bank is currently appointing an independent technical review panel to conduct a technology assessment, which will start in July and is expected to be completed by November, to determine the most applicable technology for South Africa.
The scope of the technology assessment would need to be appropriate for the chosen site.
Eskom technology strategy and planning manager Barry MacColl tells Engineering News that, based on the utility’s own research and the results of the technology assessment, the company hopes to go to the market with a tender outlining the performance specifications by March 2011.
Going to the market with performance specifications – for example, detailing the required capacity, availability and storage capabilities – will allow for any and all vendors to offer in their bids configurations that they think could best meet the requirements.
The technology assessment means that Eskom is not yet committed to a detailed design, and is willing to change the scope of the project slightly. If, for example, it is recommended that the plant be 80 MW instead of 100 MW, with less storage, for example, these recommendations could be taken on board.
However, MacColl reiterates that the intention is to build a large plant that is regarded as a viable alternative to existing power generation options.
Eskom does not want a small pilot or test CSTP plant – it is determined to show that the technology is a viable replacement and alternative for coal.
“We don’t want to be a small player in this,” says MacColl. “We are intent on diversifying our generation mix, moving into the renewable space as an alternative to fossil fuels. We need to build a CSTP plant that demonstrates large power capacity, high availability and dispatchability, which implies storage capa- bility. Anything less will not indicate we are on a path to meet our renewable goals.”
Eskom has been researching CSTP since 2002, and says that the work done to date has placed the utility in a position to go to the market as a well-informed buyer or developer of the technology. The project has been endorsed by the Eskom board and puts the organisation in a position to respond to the anticipated Integrated Resource Plan 2 targets.
The Eskom Board has given the project the green light, provided funding solutions can be found.
The portion of the World Bank loan allocated for the CSTP project, through the Clean Technology Fund, is $250-million. The International Bank for Reconstruction and Development, which also falls under the World Bank, has loaned the utility $150- million for the CSTP.
However, the World Bank loan does not cover the costs of these projects in full. Eskom’s 100-MW CSTP plant with storage is estimated to cost in the region of R6-billion (about $782-million), and thus the utility is in discussions with other potential funders to make up the shortfall of about $382-million.
These discussions are at an advanced stage and several lending institutions have expressed strong interest.
An Eskom treasury official explains that the utility is in discussions with other European development banks, as funding for clean technology projects is relatively readily available from them, and at more favourable terms than from commercial banks.
The official remains confident that these banks would not invest in anything that is not ‘doable’, and is certain that Eskom will get the necessary funding, and deliver the CSTP project.
Eskom would not produce power from the CSTP plant under the renewable-energy feed-in tariff, as it would not apply in this case. However, Eskom would need to include, and put forward to the regulator, the higher cost of power generation from the CSTP plant, when it makes its multiyear price determinations to establish electricity tariffs.
A major hurdle for the technology is that cost comparisons show that CST is about 168% more expensive than ‘new’ coal on a rand-per-megawatt-installed basis; however, MacColl emphasises that this is the capital cost of the project and not a long-term levelised cost comparison, and he believes that the cost of energy from fossil fuels will continue to rise (along with primary energy costs and carbon taxes), while the cost of solar technologies will continue to decline in real terms as the technology matures and more players enter the market.
“We are in the early days of CSTP. Solar energy is clean, abundant and at the beginning of a technology development curve which will make it cheaper to exploit in the next decades,” he says.
He also believes that, during the life span of this project, which is estimated at about 20 years, the lines will cross where solar becomes more cost efficient than coal and the electricity supply industry in South Africa will be transformed as a result.
Demonstrating the Technology
Studies to date have outlined the potential for a 100-MW concentrating central receiver power plant, using molten salt heat transfer liquid, as well as storage tanks to allow for output when solar irradiation is inadequate.
A 14-hour storage capacity would give the plant a 68% availability factor, which is essential for Eskom’s operating requirements. By comparison, coal-fired power stations have an availability factor of between 85% and 90%.
By building the first plant of this type and size in the country, Eskom says it could kick-start the solar power generation industry in Africa, as the solar community could use the experience gained to deal with some of the key issues facing concentrating solar technology.
These include: • understanding the true cost of construction and the real prices of production, rather than referring to estimates;
MacColl acknowledges that there are elements of risk, but says that these need to be tackled on a sensible basis.
“Risk is a relative term and will mean different things, whether you are a small independent power producer or a large utility. We acknowledge that any venture into a new technology is a risk management exercise and it is precisely for this reason that we are determined to get our demonstration unit on the ground and operating. Only then can we stop theorising about the risks involved and actually quantify them based on real experience in a South African context,” he says.
He adds that, when one invests such signifi- cant quantities of money, one needs to ensure that due diligence is followed to protect lenders and other stakeholders, not least the people of South Africa.
“However, courage is also required if we are to transform our predominantly coal- based power sector into something more sustainable. Eskom wants this project to be the first of many in a South African solar industry that will be regarded by future generations as a wonderful thing. We are willing and able to make the first move in large- scale concentrating solar thermal power generation,” MacColl concludes.
Edited by: Martin Zhuwakinyu© Reuse this Comment Guidelines (150 word limit)
Other Electricity News
Updated 5 hours ago South Africa’s Department of Energy (DoE) denied on Wednesday that its had signed a deal to procure eight VVER nuclear reactors from Rosatom, of Russia, stating that the agreement signed in Vienna on September 22 merely formed part preparations for a procurement...
Article contains comments
Updated 3 hours ago Protech Khuthele Holdings on Wednesday said, in a cautionary note to shareholders, that, as the failed company unwound, investigations were ongoing into its affairs. The company provided no indication of the completion date.
Updated 3 hours ago Private equity investors are increasingly becoming more active in Africa’s bid to narrow the $90-billion a year infrastructure funding gap constraining the continent’s growth. This was according to a survey by the Southern African Venture Capital and Private Equity...
Updated 3 hours ago The shortlist of innovations in the Africa Prize for Engineering Innovation was announced on Wednesday, comprising 12 new innovations from seven African countries. The shortlist announced by the UK’s Royal Academy of Engineering (RAEng) included innovations in...
Recent Research Reports
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
This Week's Magazine
The latest TransUnion Vehicle Pricing Index (VPI) contains a number of small, but significant indications that the tide may at last be turning for the beleaguered used car industry. For the third successive quarter, used car inflation has increased on a year-on-year...
The South African new vehicle market is likely to reach around 630 000 units in 2014, down from the 650 000 units recorded in 2013, says Toyota South Africa Motors (TSAM) president and CEO Dr Johan van Zyl. Van Zyl is also president of the National Association of...
Efforts by the Kenya government to increase energy generation by 5 000 MW over the next three years received a major boost following the award of a $2-billion contract to build a coal power plant in Lamu. Despite allegations of irregular tendering process, the...
Using crafty wordplay on a well-known Internet meme, brilliant South African-born US entrepreneur and businessperson Elon Musk announced that Tesla Motors would not initiate patent lawsuits against anyone who, in good faith, wanted to use its technology. Instead,...
August new vehicle sales declined by 1.4%, to 55 722 units, compared with the same month last year. Assisted by the car rental market, the South African new passenger car market, at 37 953 units, contracted by 1 047 units, or 2.7%, compared with August last year.