Eskom plans third new coal station

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[miningmx.com] — SOUTH AFRICA will have a third new coal-fired power station after 2025.

On Tuesday, Eskom CEO Brian Dames confirmed that the two power stations currently under construction – Kusile in Mpumalanga and Medupi in Limpopo – would not be the last coal-fired power plants built in South Africa.

He said although the new Integrated Resource Plan (IRP2010) had not made provision for a third coal-fired plant, it did not necessarily deal with additional capacity after 2025.

Although Eskom was striving to become greener and less dependent on power generation from coal, coal still had a major role in South Africa’s future energy mix.

Dames said South Africa’s access to cheap coal made it unwise to dispense with coal.

Eskom would in future focus on nuclear power and renewable energy, with an emphasis on solar projects, he said at Tuesday’s announcement of Eskom’s interim results.

By 2030 the utility planned to have changed South Africa’s existing power-generation mix (currently almost 95% coal), and would in future have about 14% of its capacity generated by nuclear power and other sources.

He said that renewable energy would comprise a further 16% of the total and by 2030 coal would make up about 47% of total generation capacity.

Dames said Kusile and Medupi represented a 20% increase in Eskom’s generation capacity.

The expectation was that the third coal-fired power station would add a further 5GW to the network.

Eskom’s aim was to become greener, but this could also be achieved by using new technologies to make existing and new coal-generation facilities much cleaner.

NEW TRANSPARANCY EFFORTS

Tuesday was the first time in the group’s 87-year existence that interim results had been published.

In the six months to September 30 2010 the parastatal had shown a net profit of R9.5bn on turnover of R51bn. In the corresponding period in 2009 profits were R1.1bn on turnover of R38.3bn.

Eskom head of finance Paul O’Flaherty said the first six months were traditionally Eskom’s strongest period of the financial year.

In the winter more electricity was sold and less maintenance done, which meant costs were lower.

O’Flaherty said Eskom expected to break even in the second half.

Malusi Gigaba, the new Minister of Public Works, praised Eskom’s efforts.

He said it was pleasing to see that Eskom was eventually showing a real turnaround. The company had a huge responsibility with the current building programme and in this regard good results were extremely important.

Dames said profits would be ploughed back into the company to strengthen the balance sheet and help pay for the construction programme.

He was pleased to be able to report that the construction programme comprising Kusile, Medupi and Ingula – the hydro project – was now fully funded. The project could proceed full steam ahead.

Eskom had reached this milestone thanks to further intervention by government, which last month announced that it had accorded Eskom further guarantees worth R174bn.

– Sake24

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