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May 31, 2007

Medupi

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Construction|Engineering|Africa|CoAL|Coal-fired Power Station|Eskom|PROJECT|Projects|Resources|Systems|Africa|Energy|Power Generation|Power-generation|Systems|Environmental|Power
Construction|Engineering|Africa|CoAL|Coal-fired Power Station|Eskom|PROJECT|Projects|Resources|Systems|Africa|Energy|Power Generation|Power-generation|Systems|Environmental|Power
construction|engineering|africa-company|coal|coalfired-power-station|eskom|project|projects|resources|systems-company|africa|energy|power-generation|power-generation-industry-term|systems|environmental|power
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Name and location
Medupi (previously Project Alpha and Project Charlie), Limpopo province.

Project description
Medupi, formerly code-named projects ‘Alpha' and ‘Charlie', will have a nameplate capacity of between 4 200 MW and 4 500 MW by the time its last unit is commissioned in January 2015.
The Medupi units are scheduled to be commissioned at nine-monthly intervals.
The project will form part of the utility's integrated strategic electricity plan.

Value
R66-billion - in total, the utility has bolstered its medium-term capital expenditure plans to R150-billion from R97-billion, a move that is designed to keep pace with economic growth, but will also push up electricity prices.

Duration
The project is likely to be operational in the first half of 2011. The project was originally scheduled to be operational in September 2010, but has been delayed by up to nine months, as a result of environmental challenges.

Breakdown of main contracts
Too early to state.

Client
Eskom.

Latest developments
The construction subsidiary of State-owned power utility Eskom is gearing up to move on to the Lephalale site, in the Limpopo province, for the construction of South Africa's first new greenfield coal-fired power station in more than two decades. This follows Environmental Affairs and Tourism Minister Marthinus van Schalkwyk having issued a record of decision approving Eskom's plans to build the new 4 800-MW base-load power station and dismissing appeals lodged against the construction of the coal-fired plant. The National Energy Regulator of South Africa has also approved Eskom's licence application to build and operate the project.

Eskom CEO Jacob Maroga has stated that the group's in-house civil engineering unit, will now move on to the property to begin site preparation for the R66-billion project, which will begin delivering its first power in 2011. Maroga has indicated, however, that the project's value might swell to beyond R80-billion should Eskom be required to install stringent air-quality systems, but he has said that this decision will be made following air-quality monitoring and a public process led by the Department of Environmental Affairs and Tourism.

Eskom has not yet finalised key contracts and is still mulling over various unit configurations, ranging from 700-MW units through to 900-MW versions.

The names of those short-listed to supply the core plant have yet to be released. The boiler and turbine contracts for Medupi will be two of the largest contracts that Eskom has signed in its 83-year history - tenders for the long-lead boiler and turbine packages are lodged and the evaluation process is now said to be complete. The Medupi project will include supercritical boilers, able to operate at higher temperatures and pressures than the older-generation boilers. It will also employ direct dry cooling, making it Eskom's fourth dry-cooled base-load station after Kendal, Majuba and Matimba power stations.

In a bid to make the Eskom build more attractive in the current ‘suppliers' market', the company is offering its coal-fired projects on a fleet model rather than on a project-by-project, or piecemeal, basis. The idea is to offer a larger market to suppliers that are at full stretch, given the demand for power-generation plant across the globe, but particularly in Asia.

Further, Exxaro Resources and Eskom have reached an agreement on the price and terms of the long-awaited coal-supply agreement for Medupi.

Exxaro's Grootegeluk mine will, over the next 40 years, supply 7,3-million tons a year of power-station coal to the first three units (2 250 MW) of the new base-load power station.

Delivery to the first unit will be determined by Eskom's construction programme for the power station.
Exxaro and Eskom are in the process of nego-tiating a power-station coal supply contract for the additional three units.

Participants
None stated.

Construction materials
Too early to state.

On budget and on time?
It has not been confirmed whether commissioning is on schedule.

Contact details for project information
Eskom marketing and communications, Moses Mamba, email moses.mamba@eskom.co.za

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