Although demand for power has decreased, owing to stagnation in the economy, which means less demand from key industries such as mining and manufacturing, engineering and design firm WSP | Parsons Brinckerhoff Africa believes that the gas-to-power programme (GPP) has a substantial role to play in South Africa’s power mix once economic activity picks up.
“Once economic activity increases again, there is still the potential risk of power shortages if pre-emptive measures are not taken to increase the country’s power generation and distribution capacity,” says WSP power generation director Jay Urban.
Hence, he says, the Department of Energy (DoE) should begin to focus more on the GPP and attempt to speed up the procurement processes.
Urban explains that the programme aims to use natural gas in the form of transportable liquefied natural gas (LNG) as fuel for gas turbine power plants.
He notes that, while the programme is quite complex, as it involves sourcing and transport of the LNG and developing the infrastructure to deliver fuel gas to power plants, the DoE needs to initiate a procurement process and maintain the momentum in order not to lose the interest of potential developers.
He notes that there has been some movement in this direction in line with the Integrated Resource Plan (IRP) 2010, which was updated in 2013. However, Urban comments: “The IRP urgently needs to be updated again with initiatives that the DoE has already started, as we need to be able to assess if we are on track with these planned delivery targets. For instance, if we look at the IRP, we are supposed to have the first gas-to-power plant completed by 2019; if this programme is delayed further, then we risk missing this target.”
He explains that there are a number of major international independent power producers (IPPs) and power generation developers interested in South Africa’s gas programme, keenly awaiting direction in the form of a request for quotations and a request for proposals from the DoE.
Urban highlights that this interest should not be tested, as developers may switch their attention to other parts of the world where similar opportunities exist.
GPP for South Africa
Urban comments that, to date, the DoE has indicated that it has identified three major ports in South Africa – namely Saldanha Bay, Richards Bay and Coega – where floating storage and regasification units will be stationed for receiving LNG and regasification.
“From there, natural gas in gaseous form will be piped to the power plant. This is quite an exciting development as, while it is proven and used in a number of countries around the world, it will be a first for the country. This will allow South Africa to build IPP gas power plants in a relatively short time,” he points out.
Urban adds that it will also pioneer the development of wider-scale natural gas distribution and utilisation infrastructure in South Africa.
Skills to Undertake LNG
According to Urban, South Africa has sufficient skills to build the gas power plants.
“In the past, South Africa built the Ankerlig and Gourikwa open-cycle gas power plants, in the Western Cape. These peaking stations were developed with the use of contractors from other parts of the world and a significant contingent of local skills,” he comments.
Similarly, Urban notes, the recently commissioned Avon and Dedisa peaking open-cycle gas turbine stations were built using a mixture of local and overseas skills.
He adds that it is important to remember that a gas-fired power plant is not as complex as a coal-fired or nuclear power plant. “When it comes to developing LNG infrastructure, however, this is different and more complex.”
Moreover, Urban states, the country needs to acknowledge that the gas programme, which the DoE initiated, has three key components.
The first component is sourcing and transport of the LNG to designated ports. The second is the regasification process that enables the resource to be safely and proficiently transported to the power plant. The third component is constructing the power plant where the fuel gas will be used to generate electricity.
Urban comments that the DoE has indicated that the bundled approach will be applied for the programme.
“This essentially means that the appointed developer will be responsible for developing the entire package, including the LNG delivery and storage, regasification, the infrastructure to deliver to the power plant and the construction of the power plant. This is where we will need to rely on expertise from overseas, as dealing with LNG on such a scale is not well known in South Africa,” he emphasises.
Further, Urban states that, while the skills in terms of the infrastructure will need to be sourced from abroad, the DoE has confirmed that, with the support of consulting companies with expert know-how, the department has access to sufficient skills to run the programme.
Urban concludes that as, South Africa’s programme transitions from the planning to the implementation phase, WSP| Parsons Brinckerhoff wants to be a part of the programme – as it does with the DoE’s Coal Baseload Independent Power Producer Procurement Programme – as these are very exciting prospective projects.