New Gas-Fired Power Plant to Assist South Africa and Mozambique

South Africa has an acute power shortage

Plans for a gas-fired power plant to supply electricity to South Africa and Mozambique for two years have been unveiled by UK-based power specialist Aggreko and South African investment company Shanduka.

“This is thought to be the first project by a private company to supply an interim cross-border power solution to two utilities in southern Africa, and underlines the potential benefits that can accrue to countries sharing resources,” the two companies said in a statement this week.

The 107-megawatt plant in Ressano Garcia on the border of the two countries was approved by South African energy regulator Nersa and the Departments of Energy and Public Enterprises.

It will be fuelled by gas from Sasol’s Temane gas field and will service Eskom and its Mozambican counterpart, Electricidade de Moçambique (EDM).

It will be located in Ressano Garcia as it is in close proximity to the existing Sasol gas pipeline, which runs from northern Mozambique through to South Africa, as well as a 275 kV transmission corridor.

In addition, Aggreko will install containerised power generation units, which will be shipped in from Dumbarton in Scotland, and build gas interconnections, a substation, and a 1.5 km 275 kV transmission line to the main network. This infrastructure will remain intact once the installation is dismantled.

Power purchase agreements have been signed by both utilities and Eskom will utilise 92 megawatts of the available capacity, while EDM will use 15. The joint venture is expected to bring in revenues of about US$250-million over its operational period, which should begin in October and carry on until July 2014.

Eskom is planning to use the power to bolster its base-load capacity ahead of the introduction of new generation capacity from the Medupi coal-fired power station, which is scheduled to begin operating towards the end of 2013. EDM has contracted with the facility to meet its daily peak demand.

The project is expected to complement other alternative energy initiatives South Africa is embarking on, including a 100 MW concentrated solar power plant in Upington in the Northern Cape, as well as a 100 MW wind power project in Sere, outside Cape Town.

Eskom is also currently building two major coal-fired power stations, Medupi and Kusile, in Limpopo and Mpumalanga respectively. But until the completion of the stations, South Africa’s high energy demands are expected to continue to threaten the country’s supply.

It is hoped that with the agreement this week, both South Africa and Mozambique will get much-needed additional power, with the project also underlining the importance of the two countries as energy hubs for the entire southern African region.

According to Aggreko’s chief executive, Rupert Soames, the contract was not only important for South Africa and Mozambique but for southern Africa as a whole.

“We also hope this project will be an example for other countries seeking to optimise their resources and manage the supply of regional power.”

The companies envisage employment and training of about 100 locals with the procurement process tailored to benefit South African companies.