The global head of GE Power says the group anticipates that South Africa’s future electricity mix will incorporate higher contributions from wind and solar and that its South African unit, which currently has a strong coal focus, will “pivot and adjust” its skills and localisation strategies accordingly.
Speaking in Pretoria at the tail-end of a four-country tour of sub-Saharan Africa, GE Power president and CEO Russell Stokes said the South African business would, in time, build a full “ecosystem” around renewables technologies, much as it had done in the coal sector.
The US multinational has a substantial South African coal footprint, which expanded materially after its $9.5-billion acquisition of Alstom’s power business in late 2015. GE has estimated previously that about 70% of the country’s electricity, still overwhelmingly derived from coal, is produced using its technology.
The company remains active on the Medupi and Kusile coal-fired projects, and GE Power sub-Saharan Africa regional director George Njenga reported at the same briefing that the group had surpassed the 50% local-content target set by State-owned electricity group Eskom for Kusile by more than 20%.
“GE has committed over $1.4-billion on local development, including a site-based welding training centre, bursaries for over 170 tertiary students and school development projects,” Njenga added.
Stokes said that, in light of its expectation of a rising renewables penetration in South Africa, the group is likely to evolve its talent and investment strategies in a way that supported a domestic supply-chain development around the technologies.
This skills and technology base could also be deployed into the rest of the region, which was also increasingly keen on pursuing renewable-energy projects, particularly solar projects.
However, he added that, while there was no shortage of project ideas, funding remained the main impediment to the building of both renewables and conventional power projects in Africa.
GE Power also expressed “delight” in the South African government’s recent announcement that power purchase agreements would now finally be signed for 27 wind and solar projects procured in 2015. Implementation of the projects stalled in 2016 after Eskom said it was unwilling to enter new contracts with renewables independent power producers (IPPs), owing to the country’s return to an electricity surplus.
“It’s also good news for the overall IPP programme in South Africa, which also entails the development of steam IPPs,” Njenga said, highlighting that GE was the technology partner for the 300 MW Khanyisa coal-fired project being developed by Saudi electricity group ACWA Power.
The project will incorporate circulating fluidised-bed (CFD) technology and burn discard coal from nearby Anglo American collieries.
Njenga added that a climate impact assessment on the project indicated that it would be preferable to produce power from the discard coal, using advanced CFD boilers, rather than leaving the dumps to continue emitting greenhouse gases.
A competitor project selected as a preferred bid during the first round of South Africa’s baseload coal IPP process was facing a legal challenge, despite its climate assessment having recently received a Ministerial environmental authorisation.
Anti-coal groups indicated this month that they intended approach the courts to challenge the authorisation granted for the 557 MW Thabametsi coal-fired power station project, proposed for development near Lephalale, in Limpopo.
Njenga did not dismiss the prospect of the Khanyisa project also facing a legal challenge, but he was optimistic that the project’s proponents could show that their solution was, in fact, more environmentally responsible than that of the status quo. He also stressed that the project would use water recycled from nearby mines rather than fresh water.
GE Power also looks forward to the publication of South Africa’s updated Integrated Resource Plan, which will provide greater certainty for the direction of the electricity market would and how the country intends to meet future power needs, particularly as older coal stations are decommissioned.