African Energy registers interest to supply power to South Africa

Sese Coal Botswana-Location

Sese Coal Botswana-Location

African Energy Resources Ltd (AFR) says it has prepared and successfully submitted a Request for Registration and Information (RFRI) to South Africa’s Department of Energy (RSA) for the development of a 300 MW power station and captive coal mine to supply energy to the country’s electricity grid.

The decision follows developments in South Africa when in 2012, in support of its Integrated Resource Plan for Electricity 2010‐2030, the country added close to 11,000MW of new generating capacity to its forward procurement programme.

“Of this, 2500MW has been reserved for base‐load coal‐fired generation, including domestic and imported energy from Independent Power Producers.  AFR has registered its interest in supplying 300MW in conjunction with a South African BEE partner,” revealed the company. African Energy said the project is to be located at its Sese coal project, with coal supply from Block‐C and the off‐take party would be South African utility Eskom.

The company is buoyed by developments in the region including here at home. Botswana recently released a Request for Pre‐Qualification (RFPQ) for a 300MW independent power project to be built at the existing Morupule power complex (Brownfield IPP). It is anticipated that an RFRQ for an additional 300MW power plant to be developed at an alternative site in Botswana will be issued shortly (Greenfield IPP).

AFR said it intends to lodge a submission for the Greenfield IPP in conjunction with its project partners, with whom advanced negotiations regarding the terms of such joint development are nearing completion.

“Studies indicate that the geometry and low strip‐ratio of the Sese Block‐C coal resource will result in mining costs towards the bottom of the southern African cost curve. This permits the development of power projects with very competitive tariffs for sale to regional utilities and private companies,” it said.

Measured resources defined at Sese Block‐C alone contain enough coal to support an estimated 2,400MW of generating capacity for over 25 years, thereby providing substantial expansion opportunities.

South Africa faces power challenges as Eskom’s build programme is experiencing delays. The Medupi’s six 800 MW units, was due to deliver first power to the grid by the end of 2013. “A more realistic target for the first synchronisation of Unit 6 to the grid is the second half of 2014. This is based on in-depth independent and internal assessments of the project which Eskom has undertaken. The revised schedule is based on certain assumptions and depends on the success of interventions to ensure critical timelines, on the boiler and control and instrumentation contracts, are met in the next few months as well as the stability of the labour force,” said Eskom.

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