UCG power plant developer eagerly awaits procurement programme

17th March 2017

By: Marleny Arnoldi

Deputy Editor Online

     

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Multifaceted resource and technology company African Carbon Energy (Africary), which plans to develop an underground coal gasification (UCG) power plant project at its one-billion-ton coal deposit in Theunissen, in the Free State, says it has been bid-ready for the domestic gas independent power producer procurement (Gas-IPPP) programme for some time.

“But, unfortunately, the programme has suffered several delays,” notes Africary director Johan Brand. Until recently, the future of independent power producers (IPPs) in South Africa has been uncertain, owing to the refusal of State-owned power utility Eskom to sign power purchase agreements (PPAs) with renewables IPPs. However, President Jacob Zuma announced during his February State of the Nation address that Eskom would sign the outstanding PPAs “in line with the procured rounds.

“We are hopeful that the Gas-IPPP will proceed and that the local gas producers, like Africary, will not be ignored against the planned international liquefied natural gas (LNG) imports. Africary sees a possibility to receive a request for proposal (RFP) from the Department of Energy’s (DoE’s) IPP Office later in the year,” Brand tells Mining Weekly.

Africary’s development of the 50 MWe Theunissen power generation project was completed in 2015, but with the company waiting for the DoE to release the RFP for the Gas-IPPP programme, it was placed on hold.

The DoE has decided to postpone the release of the RFP to ensure the alignment between the procurement programme and the finalisation of the latest version of the Integrated Resource Plan (IRP), a draft of which was released on November 22, 2016.

The DoE is expected to finalise the IRP by March for tabling to Cabinet for its approval before it releases the RFP, upon which the procurement phase for the gas-to-power programme will start.

The Theunissen project construction and grid connection will take about 24 months to complete. Africary chose to go with an own-build grid connection option, which may become Eskom’s property after its construction. This option requires an additional investment of R80-million, but shortens the time to get connected to the grid. “About 24 months after our PPA has been signed, we can deliver 50 MWe to the national grid,” affirms Brand.

“We have redesigned UCG for South African coal, legislation, geology and hydrogeology. It’s all incorporated into our final design and the way we do business. Our system is optimised for South Africa’s conditions.”

Together with process engineering company CDE Process and directional drilling specialist Aqua Alpha Drilling, Africary hopes to put South Africa at the forefront of UCG as the first South African coal mining company to generate clean-coal power in Africa.

Brand and his partner Eliphus Monkoe, who passed away in 2014, established Africary in 2009, at the height of load-shedding in South Africa, with the Theunissen project established to fill a gap in local energy supply. Africary bought the Theunissen coalfield from global resources company BHP Billiton in 2011.

“My vision is to improve the efficiency of the coal-to-electricity industry value chain. We are also working on a coal-to-liquids proposal that can produce up to 250 000 ℓ/d of ultra low sulphur diesel. We will safely and efficiently transform our coal resource into a transferrable energy commodity that can be sold to meet local energy demand.”

Theunissen’s project development planning was finalised early in 2015. “We own the property and the coal rights and have received environmental approval to generate power on the property, emissions licences and permits, as well as financing from financial services provider Nedbank. We have also appointed construction services provider Group Five as the project’s engineering, procurement and construction management contractor.

“It’s frustrating to wait for the project to materialise and we have been treading water ever since,” Brand tells Mining Weekly.

The estimated total cost of the project is about R2.7-billion, of which R320-million has been spent on the project’s design, buying the property, licensing, the exploration and mining rights, feasibility studies and development work. The rest of the capital will be spent on the construction of the UCG mine, oxygen, utilities and power plant.

Africary will use synthesis gas (syngas) combustion engines to generate electricity. Using a high number of parallel units, the gas engines provide a significantly higher average availability. Any one engine can be taken out of commission for maintenance, while the rest of the facility remains operational, resulting in minimal impact on the total output.

Single engines can also be progressively removed from the circuit to match the syngas production rate, should gas loads from the UCG process decrease. Therefore, it is not necessary to operate the engines at lower rates to maintain a high level of electricity efficiency per engine. When syngas production increases, an engine can be recommissioned in less than five minutes, Brand says.

The electricity produced by the engines will be connected to the local electricity supply grid through a 132-kV power line routed to the Eskom transmission substation 8 km away.

Brand says Africary has enough land and coal to expand its facility in future to accommodate a 600 MWe integrated gasification combined-cycle (IGCC) power plant. “We have enough coal capacity to produce 5 000 MWe of power for 100 years at Theunissen. Owing to the modular nature of our technology, we can easily increase our production capacity if an agreement is reached with municipal or industrial users.”

UCG-fuelled power plants, when combined with the IGCC process, can operate at more than 55% fuel efficiency, compared with coal-fired power stations, which are 35% fuel efficient. Thereby, Brand asserts, UCG plants lower the amount of carbon dioxide, sulphur oxides and nitrogen oxide emissions produced per MWe.

UCG Background
“UCG is a 150-year-old concept and, although coal gasifiers have been operating in South Africa for 60 years, with a UCG facility operated at Majuba [in Mpumalanga] since 2007, [the technology] is still not widely known,” notes Brand.

UCG is a mining method that extracts previously stranded coal reserves, through a gasification process, by constructing two horizontal boreholes, where one borehole is used to inject air to convert coal in the coal seam into syngas, while the other is used to bring the syngas to the surface. It is an economical and environmentally viable option for mining coal deeper than 200 m, monetising unmineable coal that would otherwise be lost to South Africa’s economy, says Brand.

UCG eliminates mine safety issues, as it eliminates the need for people to work underground, surface damage and stockpiles of discarded coal and ash. Syngas has no particulate matter and can not form smoke or smog. It also reduces acid mine runoff, and simplifies rain- and groundwater management, as well as land reclamation. UCG also removes many damaging elements associated with coal-burning, such as arsenic, sulphur and mercury, notes Brand.

He adds that the UCG mining method often gets confused with shale gas or coal-bed methane gas, which can also be extracted from coal seams, but has to use hydraulic fracturing (fracking) and dewatering to be effective. “UCG does not require fracking and only adds oxygen to the coal seam to form syngas,” Brand concludes.

Edited by Tracy Hancock
Creamer Media Contributing Editor

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