Cabinet backs third coal power station
THE Cabinet has approved the building of a third coal power station by Eskom, freeing the parastatal to take its infrastructure investment programme beyond the two coalfired power stations being built.
Trade and Industry Minister Rob Davies said at a post-Cabinet briefing yesterday there was no time-line, schedules or costs approved for the project yet. He said the building of the new power station would probably start once Eskom’s Medupi and Kusile projects are complete in 2018, adding a combined 9,600MW to the national grid.
Eskom has been struggling to meet electricity demand since rolling blackouts hit SA in 2008, costing the economy billions of rand in lost production and economic growth.
Mr Davies said the power station was part of the government’s overall strategy to remove energy constraints. “We had to take a clear decision of the building of the third coal-powered fired power station after Medupi and Kusile,” he said.
A decision on the size and funding for the new power station still has to be made by the government, the company’s sole shareholder.
But Accenture senior partner Ken Robinson said to meet the integrated resources plan vision to generate 55,000MW of electricity, the government and Eskom should be planning to commission the equivalent of one Medupi power station every two years. He said the announcement could be too little as some of the other coal power stations may be decommissioned.
State-owned Eskom has for the past two years, through CEO Brian Dames, been saying repeatedly that it needs to be allowed to start planning for the construction of new power stations now if the nation is to avoid further power shortages after the build process ends.
The company needs to replace its ageing generating fleet, as its existing power stations are on average 30 years old.
Immediately after completing the Medupi and Kusile power stations in 2018, Eskom will start decommissioning, or destroying, some of the old infrastructure that has already reached the end of its design life.
That will further reduce installed generating capacity, pushing the reserve margin back to below the required 15% of total capacity, meaning security of electricity supply will continue to be problematic.
“We must work with stakeholders to commence the financing and the procurement arrangements for Coal 3. We must also work to unblock the various decisions necessary for co-generation projects,” Mr Davies said yesterday.
Also announced by Mr Davies was that the government was finalising the process of authorising shale gas exploration in a responsible and environmentally friendly manner.
Last year, the government lifted the moratorium on shale gas exploration, but has not yet licensed any energy company to start exploration. Royal Dutch Shell is still awaiting a response to its application to explore for shale gas in the Karoo.
Accenture’s Mr Robinson said including renewables, hydro-power, nuclear and shale gas would help broaden the energy mix and lessen the risk of depending only on one technology. However, he said that most of those plans would take at least 20 years to start generating sufficient energy.