State-owned power utility Eskom insists that all options are on the table as it considers proposals for the repurposing of three coal-fired power stations – Komati, Hendrina and Grootvlei – that are scheduled to cease producing electricity between 2022 and 2026.
The utility issued an expression of interest (EoI) document on March 26, calling on respondents to outline business cases for the repurposing of the power stations in ways that support low-carbon growth, enterprise development and sustainable job creation.
GM for risk and sustainability Andrew Etzinger tells Engineering News & Mining Weekly that, while Eskom is likely to favour energy-related solutions, it is open to any and all suggestions, including non-electricity related proposals.
“Eskom is determined to sustain the economic and employment activity that currently surrounds these stations and has no intention of simply closing the stations and passively walking away. We aim to put these sites to good use,” Etzinger explains.
Activity at the power stations has already been curtailed in recent years, with Komati currently having only two operating units, units 4 and 9, and a total generating capacity of 225 MW. Grootvlei has three units operational, while Hendrina has six operating units, but three are down for maintenance until June 2020.
Nevertheless, the power stations still employ hundreds of people either directly or indirectly. Komati has 796 employees and contractors, Hendrina 627, while Grootvlei has a total of 819 employees. None of these figures include supply-chain employees.
Most of these seek to sustain some form of electricity production so as to take advantage of existing infrastructure, including their high-voltage distribution yards.
Possible solutions include using the land for renewable energy generation, energy storage, or the conversion of the power stations to gas or hydrogen. Eskom is even open to clean-coal technology solutions, as long as the proposals are technically and commercially viable and meet the low-carbon objective set for the repurposing programme.
Some of the non-electricity proposals already emerging include redeveloping the sites into industrial or agroprocessing parks.
JUST TRANSITION PACKAGE
“But I want to stress we are not being prescriptive at all and we are convinced that by opening this up some even better ideas could emerge,” Etzinger says, adding that Eskom views the repurposing as central to South Africa’s emerging ‘just energy transition’ from coal to renewables.
The repurposing of the power stations is, thus, likely, to feature as part of the just-transition component of a broader framework agreement being finalised by government, business and labour at the National Economic Development and Labour Council, or Nedlac, ahead of the development of a social compact supporting Eskom.
To support the process, Eskom also recently appointed Urban-Econ to support the development of social and labour plans for the power stations.
Etzinger stresses that the utility is not seeking a one-size-fits-all solution across all three sites and that the eventual repurposing option selected for each power station will be determined by various factors, such as geographical and logistical considerations, as well as its proximity to other natural resources.
Eskom has given respondents until June 20 to respond to the EoI, with the 60-day period decided upon so as to accommodate the disruption associated with South Africa’s Covid-19 lockdown.
Submissions should be in the form of a conceptual business case, not exceeding 25 pages, and containing a high-level technical and economic overview of the solution.
Proposals will be evaluated against a predetermined set of criteria, placing a high weighting on low-carbon solutions (40%) and sound socioeconomic and commercial business cases (40%). The profile of the respondents will also be taken into account (20%), with higher points granted to empowered entities.
Etzinger says qualifying submissions will be invited to respond to a request for proposals and Eskom has reserved the right to become a shareholder in the spin-off entity, or special purpose vehicles that emerge.
“We are looking for win-win solutions,” Etzinger says, adding that it is being approached as a public-private partnership opportunity.
From an Eskom perspective the benefits range from the creation of additional revenue streams to the lowering of environmental-monitoring costs and carbon emissions.
There is also significant potential, however, to shore up local economic development, create jobs and boost municipal revenues in areas that would otherwise run the real risk of becoming ghost towns as the power stations closed.