Completion of construction and commissioning of the 653 MW Avon open-cycle gas power plant this summer, just month after the start-up of its 342 MW Dedisa sister plant, puts the Ansaldo Energia/FATA consortium in pole position to win tenders for further projects in South Africa and beyond.
Both Avon and Dedisa are “Peakers Project”, backed by a government initiative which also helped Engie of France expand it foothold as an Independent Power Producer (IPP) in the region.
Both peaking plants are contracted to supply electricity to Eskom Holdings, under 15-year Power Purchase Agreements awarded by South Africa’s Department of Energy a Build, Own and Operate (BOO) basis.
Currently running on fuel oil, the two OCGTs are meant to be converted into gas-fired CCGT at a later stage – supporting efforts of the South African energy ministry to boost the country’s share of gas in the power mix. Ansaldo also committed to service the two plants and provide maintenance over a period of fifteen years.
Up to 1,500 jobs were created during construction with an achievement of 4,000,000 manhours. Over 88% of jobs were reserved for black employees, of which 63% skilled. Recruitment was done locally in collaboration with the KwaDukuza municipality as developers said they “seek to advance sustainable projects which will benefit the community.”
Gas power could help mitigate energy crisis
Prioritising the construction of new gas-fired power plants is believed to help reduce South Africa’s crippling energy crisis. The option of nuclear power has also been eyed by the government in Pretoria, but gas power capacity is both quicker to build and more flexible in operation – ideal for a ‘quick fix’ for South Africa’s power shortages.
So far, Africa’s second largest economy relies on coal for most of its electricity but plants are ageing and many are nearing the end of their lifetime. By the end of this decade, South Africa’s two largest coal-fired stations with a combined capacity of 9.6 GW – Medupi and Kusile – will be “unable to cope,” McKinsey warned. Several other ageing coal plants are getting close to decommissioning.
“South Africa is facing an emerging energy supply gap after 2020. Natural gas could play an important role in bridging this gap,” analysts said, suggesting
“We estimate that South Africa could install up to 20 gigawatts of gas-fired power plants to diversify base-load capacity by 2030,” analysts said in a report, suggesting “Gas can be provided through imports, local shale gas resources (if proven), or both.”