UK-based interim power solutions specialist Aggreko, together with South African investment holding company Shanduka Group, recently announced a groundbreaking clean fuel power supply project that due to come on stream imminently, providing a much-needed ‘temporary interim gap filler’ power supply.
The project – a new 107 MW power plant – will use gas from Mozambique’s Temane gas field to provide a power supply to South African power utility Eskom and its Mozambican counterpart, Electricidade de Moçambique (EDM).
It came about following discussions initiated by Aggreko, which has 9 000 MW of rental power capacity, and included Shanduka Group, Eskom and EDM. The discussions took place early in 2011 and the project was approved by South Africa’s National Energy Regulator (NERSA) and the country’s departments of Energy and Public Enterprise.
‘Imminent timing’ is a key component of this project, which is on schedule to come on stream early in the third quarter of this year. It will supply 92 MW of power to Eskom and 15 MW of peak hour power to EDM until July 2014.
It is important to note, however, that the power purchase agreements are subject to the parties fulfilling a number of conditions before becoming effective.
“We are very supportive of this innovative cross-border project and we look forward to the seeing the plant coming online early in the third quarter,” says Hilary Joffe, Eskom spokesperson.
As part of Mozambique’s Concession Agreement, the power plant will be built on the site of Gigawatt Mozambique SA at Ressano Garcia, on the Mozambique/South African border. “We are able to bring this project on stream so quickly because the Ressano site already has existing gas off-take agreements in place, as well as approved concessions and licences,” says Aggreko chief executive, Rupert Soames.
Aggreko (with 1 300 MW of rental capacity currently installed in Africa) will be responsible for building gas interconnections, a major substation and a 1.5 km, 275 kV transmission line as per the agreements with the Matola Gas Company SA and Gigawatt Mozambique SA.
This is thought to be the first project by a private company to supply an interim cross-border power solution to two utilities in Southern Africa, and it underlines the potential benefits that can accrue for the countries sharing resources. Both countries will get much needed additional power, and the project also underlines the importance of Mozambique as an energy hub for the entire Southern African region.
The total value of the project is likely to be in the region of US$250 million (about R2.1 billion) over two years, including fuel costs.
“This is an important contract for Aggreko, and for Southern Africa, under-scoring the benefits of working together for the common good. Southern Africa is experiencing strong and sustained economic growth and the demand for energy is a major issue. Meeting future needs is going to require an energy mix, and natural gas – which has the lowest environmental impact out of the thermal options – will definitely be part of the solution. We also hope this project will be an example for other countries seeking to optimise their resources and manage the supply of regional power,” says Soames.
“The partnership with Aggreko creates an opportunity for Shanduka to contribute to the Southern Africa Power Pool. This project will support our vision of creating value while making a difference. Shanduka will oversee the employment and training of about 100 locals and we will also lead the procurement process to ensure South African companies benefit,” comments Phuti Mahanyele, CEO of the Shanduka Group.