Japan’s Marubeni Corporation reports that the development of the Thabametsi coal-fired power station, in South Africa, has not been affected by the group’s September 18 policy decision to “no longer enter into any new coal-fired power generation business”.
As part of the policy change, Marubeni announced that it would halve its coal-fired power net generation capacity of 3 GW by 2030 and would expand the ratio of power generated from renewable energy from about 10% currently to 20% by 2023. Marubeni has total net power generating capacity of about 12 GW worldwide.
In response to questions posed by Engineering News Online regarding the possible implications of the policy decision on Thabametsi, Marubeni said the policy dealt only with “new” coal-fired power generation, with the South African venture regarded as a “committed project”.
“So the policy is not applicable to Thabametsi,” Marubeni said.
The 557 MW project is proposed for development near Lephalale, in Limpopo, and is one of two independent power producer (IPP) projects procured in 2016 under the South African government’s Coal Baseload Independent Power Producer Procurement Programme. The other project is the 306 MW Khanyisa coal-fired power station project, located in Mpumalanga, and being developed by a consortium led by ACWA Power, of Saudi Arabia.
Thabametsi and Khanyisa were the only two projects to participate in the bid window, which closed on November 2, 2015.
Both projects have been included in the draft Integrated Resource Plan (IRP 2018), which was released for public comment by Energy Minister Jeff Radebe on August 27. The document states that the projects were included following policy adjustments to the least-cost IRP to 2030. The document states that a mix of onshore wind and solar photovoltaic, complemented by flexible generation sources, such as gas, would deliver the least cost new electricity generation over the period.
Following the release of the IRP, opposition to the two coal IPP projects has intensified, with lobby group Life After Coal arguing that the projects would “lock” South Africa into further dependence on dirty, expensive coal, while delaying the urgent need to transition to a low-carbon future.
The campaign questions the legal and commercial basis for government proceeding with the procurement of the projects, owing to overwhelming evidence that the electricity produced from the two power stations will be more expensive than a mix comprising renewable energy with flexible generation capacity.
The projects may also face funding pressures, with media reports suggesting that at least one South African bank is no longer willing to fund coal-fired electricity projects, while others were still considering their funding policies.
A report by EE Publishers revealed that Standard Bank had already advised government of the bank’s new policy position to stop funding the construction of any new coal-fired power plants, in line with new Organisation for Economic Cooperation and Development (OECD) country protocols.
A petition has also been launched under the ‘Fossil Free SA’ banner to call on South African asset managers to refrain from investing in fossil fuel and to create decarbonised savings and investment vehicles.
Marubeni says its new policy recognises that climate change is a major threat to the environment and humanity and that, should it pursue coal projects, ‘Best Available Technology’, such as ultra-supercritical steam generating technology, would be employed.
As to whether best available technology would be deployed at Thabametsi, the company responded: “We believe that we have selected best technology considering all requirements of request for proposal under coal IPP Programme.”
The company also confirmed with Engineering News Online that it would be participating in South Africa’s renewable-energy programmes and would “be active in future renewable bid windows”, including the next auction, which is scheduled to take place later this year.
Marubeni refused to comment on outstanding licences for the project, as well as possible legal challenges. “It would be best to seek clarity from Department of Environmental Affairs and Department of Energy,” the company said.