General Electric (GE) has called on the South African government to reconsider investing in a further 1 600 MW of coal-fired power generation capacity, describing it as "the lifeblood" of South Africa’s economy, a significant job creator and important source of foreign exchange.
“The removal of 1 600 MW as envisaged in the draft Integrated Resource Plan (IRP) would be a big blow to investor confidence and aspiring new black entrants and regress the country’s transformation agenda of skills development and job creation,” a team from GE Steam Power Systems said in a submission to Parliament’s Portfolio Committee on Energy on Wednesday.
The GE team was referring to a 2014 Ministerial determination that allowed for 2 500 MW to be allocated to coal independent power producer projects. Instead, the draft 2018 IRP caters only for two coal independent power producers that will generate about 900 MW of electricity, that have already been procured.
“We strongly recommend that the IRP retain the balance of 1 600 MW, and that advanced technology with higher efficiency and lower emissions should be considered.”
“Following the awarding of Bid Window 1 projects, totalling 900 MW, many developers had continued to work with the assurance from the Department of Energy that the full 2014 determination would be procured as Bid Window 2, and potentially Bid Window 3.
GE said an estimated R400-million has been invested in the early-stage development of these projects, with a ripple effect within adjacent industries.
Vuyelwa Mahanyele from GE said coal contributed R120-billion to the South African economy and created 80 000 direct jobs and an additional 130 000 jobs in adjacent industries. She said over 25% of the gross domestic product of the Mpumalanga and Limpopo provinces come from coal mining.
Key by-products, such as paint, plastics, petrol and diesel were also produced from coal. “We will have to import these products. Imports could rise to R500-billion.”
GE said the further evolution of clean coal technologies, designed to reduce emissions of carbon dioxide (CO2), and carbon capture, should be considered. Supercritical and ultra-supercritical technologies with higher efficiency would reduce CO2 emissions from coal combustion as well as other pollutants. It said that, over the past two decades, technology to support clean coal had also been installed in boilers.
“These technologies are tried and tested and available in the market.
“Through a balanced approach to decommissioning, the adaptation of advance cleaner coal technologies such as ultra-super-critical, there is potential to support the reduction of carbon emissions and meet the country’s obligations [under the 2015 Paris Agreement]. By developing retrofitted and new coal power plants South Africa can continue to leverage coal as an indigenous resource that is not prone to foreign risks and other externalities.”
GE recommended that the IRP be reviewed in three-year cycles. GE is a major player in coal power in South Africa. Eighty per cent of Eskom’s power stations have installed GE steam turbines and 30% have GE boilers.