IRP2 sinks major power project

[] — AUSTRALIAN resource development company Aviva Corporation has abandoned plans to develop a 1,000MW coal-fired power station in Botswana, which had banked on concluding a power purchase agreement with South Africa.

In an address to shareholders at the group’s annual general meeting on Tuesday, chairperson Antonio Iannello said the decision was based on South Africa’s draft Integrated Resource Plan (IRP2) released in October, which did not provide for any independent coal fired power until 2027.

“A position which we believe is not sustainable,” the group said.

The plant would have been situated at the Mmamantswe coal project, a joint venture between Aviva and Mawana Minerals of Botswana.

In a project fact sheet drawn up as recently as August, the group said Mmamantswe had a large coal resource of 1.3 billion tonnes, including a probable run of mine reserve of 895 million tonnes.

“Aviva is proposing a 10 million tonne per annum coal mine, to support a 1000MW integrated power station with potential for expansion into export sales. The project is well placed for development when South Africa has completed its power procurement planning,’ read the fact sheet.

The energy department’s draft IRP2 says that the government envisaged procuring up to 5GW of generic coal-based power from 2027 to 2030 in addition to the new Medupi and Kusile power stations.

“The choice of technology will be based on current assessments of carbon capture and storage sites and the impact of climate change mitigation targets,’ it said.

In a quarterly update to end-September issued after the draft version of IRP2 was released, Aviva said the negative sentiment towards private coal fired power makes it very unlikely that the group can proceed with its plans.

“The board of Aviva had already elected to write off its investment in the Mmamantswe project based on the continued uncertainty in respect of the time of the release and promulgation of the IRP2.’

According to the IRP2 document, the tender process for the supply of coal-based power would take place from 2017 to 2018.

The chosen suppliers would be given from 2019 to 2026 to do their business case development, environmental impact assessment as well as for the completion of construction.

CIC Holdings, which is also planning a 1,200MW coal-fired energy plant at its Mmamabula project in Botswana, said on Tuesday it would make a decision on the future of the project once the IRP2 was finalised.

“We won’t be making any decision until IRP2 is in its final form,’ said spokesperson Erica Belling.

Public hearings on the IRP2 are scheduled to start on November 26 in Durban.