City set to go energy independent

THE Department of Energy has picked the Port of Richards Bay as one of the first two sites, and by far the largest, in South Africa to generate gas-fired electricity by independent power producers.

Richards Bay and Coega (in the Eastern Cape) – both Industrial Development Zones (IDZs) – will see the rise of liquefied natural gas (LNG) infrastructure at an estimated cost of more than R50-billion for the ports to produce around 2 000 megawatts and 1 000 MW respectively.

This makes up the large majority of the 3 126 megawatts allocated to the Gas to Power (G2P) programme, aimed to move the country away from its dependence on coal.

Energy minister Tina Joemat-Petterssen on Monday released a preliminary information memorandum for the developments at the South Africa Gas Options Conference held in Cape Town.

A request for quotations are expected to be issued next month with an announcement of pre-qualified bidders to be made in April.

The release of the final request for proposals should be issued in August next year.

Richards Bay IDZ CEO Pumi Motsoahae said they worked for more than two years to ensure that Richards Bay became a key gas port in South Africa.

‘We are delighted that the extensive work done has culminated in this announcement.

‘We believe the choice of Richards Bay was self-evident given the advantages of the city, in particular the availability of space for a berth for a floating storage and regasification unit.

‘Furthermore, we have the benefit of substantial electrical capacity coming into the city to feed the smelters, which can now be used to feed electricity back into the grid.

‘Richards Bay also has the advantage of a high demand for power within uMhlathuze and can also be used to feed gas via an existing gas line both down to Durban and Pietermaritzburg, as well as up to Gauteng.

‘The multi-billion rand investment will not only be for a gas-fired power station, but also gas infrastructure which will be brought into the harbour by ship and piped to the power plant and for other uses.

Industry opportunities
‘It will create the opportunity for new and existing industries in Richards Bay to make use of gas rather than electricity.

‘The announcement constitutes a mark of faith in the RBIDZ and will substantially increase investment in the zone.
‘This decision is a major coup for Richards Bay,’ Motsoahae concluded.

uMhlathuze mayor Mduduzi Mhlongo called the decision a milestone for the city in its quest for beneficiation in the oceans economy.

‘This is a huge development and will create many job opportunities.

‘The LNG project will reshape the economic landscape of the city and we will work hard to see it being implemented.’

Prominent local businessman Frans van der Walt reiterated his excitement with the news, but remains partly

skeptical about the realization of the alternative energy solution under the umbrella of power monopolies.

‘There are about five or six proposed gas-to-power projects in the Richards Bay area, already in Environmental Impact Assessment stages, which definitely indicates the extent of interest.

‘But the biggest problem to date is the fact that tariffs would have to be negotiated with Nersa (the National Energy Regulator) and Eskom – both state monopolies that are not inclined to compete, and therefore I fear they will do anything in their power to stint development of these projects.’

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