Eskom has revived a proposal to build a hydropower plant that was mothballed more than a decade ago, one of almost 20 renewable energy projects that are in the pipeline to reduce South Africa’s dependence on coal.
The state-owned utility’s proposed 1.5GW Tubatse Pumped Hydro Storage facility, which will generate power on demand from water-driven turbines, was included in South Africa’s so-called Just Energy Transition Investment Plan released last week.
The transition will be partly funded using US$8.5-billion (R150-billion) in loans and grants that the US, European Union, UK, Germany, France and several institutions have pledged to make available. That’s a small fraction of the $84.5-billion the government says it needs over the next five years to add additional renewable capacity, a third of which is expected to come from private investors.
“Where funding can be made available, Eskom will develop such projects,” the utility said in a reply to questions. “Where not, Eskom will look at alternate solutions, possibly using public-private partnership models.”
Eskom has little scope to pay for new capacity itself — it owes about R400-billion, isn’t generating enough income to cover its operating costs and interest bill.
The Tubatse project was delayed in 2009 as Eskom forecast stagnant electricity demand. The project will cost R35.9-billion, according to the transition plan, almost double the original estimate of R19.6-billion. Development and construction of such a project typically takes about eight years, the utility said.
Also in the five-year project pipeline are almost 2.6GW of wind and solar generating capacity, which are expected to cost an estimated R48-billion, and R27-billion worth of battery storage capacity.
Exit coal
Many of the new facilities will replace coal-fired plants that are set to be retired. They include the Komati power station, which shut its last unit earlier this month and will add renewables and batteries after securing $497 -illion in financing from the World Bank.
Eskom also outlined a proposal to build a controversial 3GW gas-fired plant in the eastern port town of Richards Bay. While the government says burning the fuel will be essential to stabilise an unreliable power system, it will find it difficult to access financing for such projects.
Eskom said it is awaiting a determination from the energy department on the greenfield plant and only then will its role and timelines for the project be made clear. — (c) 2022 Bloomberg LP
