SA government contemplates extending life of coal giants, raising concerns

[Nat Quinn]

 

SA government contemplates extending life of coal giants, raising concerns

South Africa is grappling with a deepening energy crisis, prompting the government to consider extending the operational lives of its major coal-fired power plants in a bid to ensure long-term energy security. Among the potential candidates for extension are Kendal and Lethabo, which account for about a fifth of the state-owned power utility’s current capacity. However, such a move raises financial challenges for Eskom and casts doubts on South Africa’s commitment to reducing greenhouse gas emissions. The ANC faces mounting pressure to address power cuts ahead of upcoming elections.

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South Africa Weighs Extending Larger Coal Plants’ Lives

By Antony Sguazzin and Prinesha Naidoo

South Africa is considering extending the lives of some of its biggest coal-fired power plants as the government seeks to bolster the country’s long-term energy security amid a deepening crisis.

Kendal and Lethabo, two plants that represent about fifth of the state-owned power utility’s current capacity, are possible candidates, according to people familiar with the matter. Officials tasked with ending the crisis and making sure it doesn’t recur are looking at all options, said the people, who asked not to be identified as the plans aren’t yet public.

The ruling African National Congress is scrambling to deal with the fallout from intensifying power cuts a year before elections. However, extending the lives of the polluting coal-fired giants would be a financial challenge for embattled state power utility Eskom Holdings SOC Ltd. and raise questions about South Africa’s commitment to curbing greenhouse gas emissions.

“The consideration of continuation of operation at present focuses on those older stations, which happen to be the smaller units,” Eskom said in a response to queries.

Eskom’s Kendal coal-fired power station in Mpumalanga, South Africa. Photographer: Waldo Swiegers/Bloomberg

For now, the government and Eskom are planning to delay the decommissioning of units at smaller coal plants — which was due to happen over the next year or two. The focus is on Hendrina, Grootvlei and Camden, the utility said.

Those three plants have a combined capacity of 4.9 gigawatts — compared with 8 gigawatts for Kendal and Lethabo — and are already partially idled. Camden and Grootvlei were previously mothballed and then reopened.

The cost of running those operations longer will be assessed against the expense of running diesel-fired plants, which are usually used sparingly at times of high demand, or whether the costs outweigh the hit to the economy from sustained outages.

More ambitious extensions would be a financial challenge, with Eskom prohibited from new borrowing as a condition of a 254 billion rand ($13 billion) bailout it got from the government. With commercial banks reluctant to finance coal projects given climate considerations, modifications to extend plant lives would need to be funded from cash flow.

The plants would also need to meet costly pollution abatement requirements, unless they were granted exemptions. That would raise concerns about long-term climate goals in South Africa, the world’s 14th-largest source of greenhouse gases.

“Extending the life of a coal plant for one or two years won’t break the carbon bank,” said Steve Nicholls, head of mitigation at South Africa’s Presidential Climate Commission. “The bigger problem would be refurbishment for five to 10 years. It’s likely to push over the top end of the Nationally Determined Contribution,” a long-term emissions reduction plan South Africa has submitted to the United Nations, he said.

The commission is working with the government and the University of Cape Town to model the emissions impact of keeping the bigger plants open for longer.

Spokespeople for Kgosientsho Ramakgopa, the electricity minister, and for the Department of Forestry, Fisheries and the Environment didn’t respond to queries.

Barbara Creecy, South Africa’s Environment Minister, this week told Johannesburg’s 702 Talk Radio that short-term extensions wouldn’t impact the country’s 2030 emissions target. Currently 400 megawatts of generation capacity was due for decommissioning at Camden but that can’t happen during an electricity crisis, she said.

German Consortium

Eskom is hopeful that expansion of private-sector generation capacity and a strengthening of the national grid will make larger projects unnecessary. Kendal and Lethabo are due to be decommissioned after 2035.

As an initial step in determining the future of South Africa’s coal-fired plants, the government will assess the findings of a group of German consultants led by vgbe energy. The group has assessed Eskom’s 14 operating coal plants and is completing its report, according to vgbe, a technical association of energy-plant operators from 34 countries.

 

 

 

source:SA government contemplates extending life of coal giants (biznews.com)

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