JSE-listed projects company TWP has submitted three independent power projects (IPPs) to Eskom for evaluation.
TWP Holdings CEO Nigel Townshend tells Engineering News Online that the company's initial IPP projects are being undertaken in association with timber producers and timber mills.
The biowaste-based IPPs, which will be for the own account of the cash-generative, debt-free traditionally mining-oriented TWP, will make use of the large volume of timber discard that arises in the timber milling.
"A tree has something like 60% waste," says Townshend, whose company has clinched agreements with timber producers in George, Knysna and Richards Bay.
The timber producers are an equity component of TWP's IPP offerings because they provide the feedstock.
"It's fairly small. We are looking at 7,5-MW power plants, which will cost about R120-million each, and that is our initial focus, but it's a green and environmentally friendly option and the power is produced at the ends of the national grid, which is where Eskom wants it produced," Townshend adds.
Importantly, the proposed projects are economically viable without any government assistance.
"We are led to believe that the cost under which the projects will be approved is R1,05/kWh, on a downward sliding scale, over a period of about eight years," says Townshend.
While it is fairly difficult to make a project pay under such a framework, Townshend believes that TWP can manage it with the timber-based projects, in which the timber biowaste is gasified with the gas then used to generate electricity.
"Our equity partner will be the actual timber supplier, so, to all intents and purposes, we are getting free feedstock," says Townshend.
Biowaste solutions earn significant carbon credits, which add to the viability of projects, and TWP, through TWP Investments under Dean Cunningham, has the skills to raise the necessary funding for the three IPPs, should Eskom give the go-ahead in March.
TWP is, in addition, working with solar companies intent on using their solar technology in power stations in South Africa and Botswana.
The company is studying solar array power and solar towers, which, Townshend says, are starting to look "quite attractive".
"The problem with any alternative energy sources at the moment, be it wind or solar or tidal, is that they are quite expensive. A long-term view has to be taken of them and the government needs to offer more incentive because the cost of the power is significantly more than coal-based projects.
"We are involved in 15 to 18 projects at the moment, most at early stage and some going into feasibility stage," he says.
The company's new energy division falls under TWP Projects CEO Digby Glover, who says that the company's new streamlined structure involves TWP Projects incorporating TWP Mining, TWP Process and TWP Energy, which will be able to tap into the group's expertise.
TWP is investigating options of bringing 1 000 TWP Projects staff together, on the same premises.