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Cape Town - Natural gas should be the preferred source to power SA in the near future as it is cheaper than nuclear energy, expert Peter van Berge says.
On November 4 Eskom CEO Brian Molefe told parliament that it was not possible for SA to have an energy mix without the inclusion of nuclear.
READ: Molefe: SA can't do without nuclear
Molefe said there was an urgent need to build more nuclear power plants and that "the nuclear programme was feasible".
Fin24 user and energy expert Peter van Berge explains why natural gas should be the preferred source to power SA in the near future:
Just less than one third of South Africa’s installed capacity will be shut down between 2020 and 2030 and alternative power sources will be needed to plug the 14 620 MW gap that will be left when the old coal-fired power stations are taken down.
SA's current installed capacity from its coal-fired power stations (including unit 6 of the new Medupi power station), hydroelectric power stations, and nuclear power plant amounts to a consistent 41 521 MW electricity.
The capacity from these sources projected for 2030 is thus estimated at 26 901 MW. This will be complemented by a further consistent amount of 8 790 MW upon the full commissioning of the Medupi and Kusile coal-fired power stations.
The 1 338 MW Ankerlig and 746 MW Gourikwa diesel-fired power stations, which are set to be converted to natural gas fuelled plants, were not included because the objective of these two plants is to only supply electricity during periods of peak power demand.
The full commissioning of the Medupi and Kusile coal-fired power stations, accompanied by the anticipated decommissioning of 14 620 MW old coal-fired power stations, will leave South Africa with a future consistent capacity of 35 691 MW electricity, implying a nominal annual generation of 312 653 GWh of electricity.
If a 90% capacity factor is assumed, the future consistent generation of 281 388 GWh electricity per year as sourced from coal, nuclear and hydro in South Africa can be accepted.
Renewable energy sources
In respect of electricity generation from solar and wind as renewable energy sources, South Africa currently has 1 032 MW installed wind power plants, a 100 MW installed concentrated solar power plant, and 1 000 MW photovoltaic solar power plants, that are annually expected to respectively produce 3 054 GWh at a ca 34% capacity factor, 320 GWh at a ca 37% capacity factor, and 2 190 GWh at a 25% capacity factor.
Under construction or in planning are 2 292 MW wind power plants, 400 MW concentrated solar power plants, and 1 360 MW photovoltaic power plants, that could expectedly produce an additional 11 040 GWh electricity per annum.
The abovementioned discussion thus implies that the annual generation of 297 992 GWh electricity in South Africa during 2030 can be taken for granted of which ca 87% will be sourced from coal.
A serious disadvantage of the annual generation of 260 322 GWh electricity in coal-fired power stations is the associated emission of approximately 237 million tonnes CO² per year.
The CSIR has concluded in its report of 2010 that South Africa's projected electricity consumption during 2030 could have an upper limit of 356 110 GWh, implying a predicted shortfall of 58 118 GWh electricity during 2030.
From an environmentally friendly perspective, it would be preferred to comply with this estimated electricity shortfall of 58 118 GWh per annum by installing additional renewable energy (i.e. wind and/or solar) power plants prior to 2030 with an ambitious total capacity of 20 733 MW, as necessitated by an expected capacity factor of 32 ± 18%.
Because of the dependency of wind and solar power plants on prevailing weather conditions, the feasibility of this option will have to be complemented by a proportional energy storage capacity.
It can thus be assumed that South Africa's current installed pumped water storage capacity of 1 580 MW electricity, with an additional 1 332 MW electricity of the Ingula scheme that is currently under construction, may have to be expanded in parallel.
Eskom moratorium
A further complication is that Eskom, due to liquidity problems, has apparently placed a temporary moratorium on issuing budget quotes required to close projects to procure electricity from independent power producers.
These budget quotes specify the infrastructure required to connect private renewable energy projects (i.e. wind and solar farms) to the Eskom grid, and binds Eskom to buy the produced electricity for a period of 20 years at awarded levelised costs of electricity (LCOEs), e.g. US$ 0.09/kWh for wind power and US$ 0.17/kWh for photovoltaic solar power during 2013.
South Africa's programme to procure renewable electricity from independent power producers consequently runs the risk of skidding to a halt.
The current South African government, however, appears to favour the construction of 9 600 MW nuclear power plants by Rosatom (i.e. the Russian state nuclear corporation) in order to comply with a future electricity shortfall.
At an assumed capacity factor of 90% this option will secure the additional consistent production of 75 686 GWh electricity per annum at a negligible carbon footprint of approximately 0.3 million tonnes CO2 being emitted per annum as estimated from a published generic full life-cycle analysis.
If the current expansion of Hungary's Paks nuclear power plant by Rosatom is taken as representative, a capital cost of $7 127 per kW installed capacity can be assumed, implying that the capital expenditure (Capex) of up to nine nuclear power plants with a combined capacity of 9 600 MW could amount to ca $ 68bn.
This anticipated capital cost of $ 7 127 per kW installed electricity is likely to imply a levelised capital cost of $0.11 per kWh electricity for an assumed 30 year Capex payback period.
If a levelised operational cost (inclusive of fuel and maintenance cost) of $ 0.02 per kWh is furthermore accepted, a relative high levelised cost of delivered electricity of ca $ 0.13 per kWh is postulated.
This postulation is aligned with the price of US$ 0.1235 per kWh electricity that will be produced by the 4 800 MW Akkuyu nuclear power plant to be commissioned in Turkey prior to 2022 at a Capex of $20bn with a payback period of 15 years.
Even with the anticipated 50% capital cost overrun of the Medupi coal-fired power station, it is still expected that electricity from Medupi will be cheaper at a levelised cost of produced electricity of ca $0.10 per kWh.
Natural gas vs Nuclear
As an alternative to nuclear power plants from which 75 686 GWh of additional electricity should be obtained during 2030, gas-fired power stations with a total capacity of 9 600 MW, also at an assumed 90% capacity factor, could be considered.
In favour of a gas-fired power station is a construction time of 20 to 30 months in contrast to 60 to 80 months required for the building of a nuclear power plant.
In addition, global engineering and project execution capability for gas-fired power stations are very accessible, and high operational flexibility is a typical advantage of an open-cycle gas turbine (OCGT) power plant as it can go from complete standstill to maximum output in just a few minutes.
Although the specific carbon footprint of a gas-fired power station is much larger than a nuclear power plant, it only amounts to approximately 50% of the carbon footprint of a coal-fired power station.
The annual generation of 75 686 GWh in gas-fired power stations will thus be associated with the emission of 34 million tonnes CO² per year.
The generation of 75 686 GWh electricity per year from 3 gas-fired power stations, each with a plant lifetime of 30 years, will require a total of 16.2 tcf natural gas that could be sourced from Mozambique's current proved reserve of 100 tcf.
Assumed in this estimated demand for 16.2 tcf of natural gas, was (i) a lower heating value (LHV) of 46 MJ per kg natural gas, and (ii) 1.4 kWh electricity can be generated out of 10 cf of natural gas.
Mozambique gas supply
The alternative of extracting shale gas from the Karoo is, however, not only environmentally contentious, but also problematic since the original estimated total reserve of 485 tcf may turn out to be only 9 tcf.
Two 150 MW gas-fired power stations were furthermore recently successfully commissioned by Sasol (one in South Africa and one in Mozambique) that are both powered by natural gas sourced from Mozambique.
One of these two, the 180 MW Ressano Garcia gas-fired power station, was commissioned in Mozambique during 2014 at a capital cost of $ 1 389 per installed kW electricity, implying that a levelised capital cost of US$ 0.02 per kWh could be regarded realistic.
The eventual levelised cost of produced electricity is, however, estimated as $ [7.14 x (natural gas cost, $/GJ) + 31.13] per MWh.
An assumed natural gas feed cost of US$ 4/GJ would thus imply a levelised cost of produced electricity of ca $0.06 per kWh.
Should the location of ca 3 000 MW gas-fired power stations close to the Rovuma basin in northern Mozambique be considered, an input of 810 MW is expected to produce an output of 750 MW through a 1 400 km long transmission line to South Africa, á la the Cahora Bassa hydroelectric power station.
The resultant levelised cost of electricity delivered in South Africa would thus amount to $ [0.00771 x (natural gas cost, $/GJ) + 0.03362] per kWh .
A liquified natural gas (LNG) import facility is, however, planned for South Africa, possibly at Saldanha Bay, to feed one 3 126 MW gas-fired power station for which companies such as Shell, Mitsubishi and Sasol are expected to bid.
It is estimated that a LNG tanker with a typical capacity of 3 billion cf will feed a 3 000 MW power station for a period ca 6 days, and the cost implication of this shipping requirement could be: (natural gas feed at US$ 1.00 - 4.00 per GJ) + (onshore liquefaction at US$ 2.00 - 4.00 per GJ) + (shipping at $ 0.50 - 2.00 per GJ) + (storage & regasification at $ 1.00 per GJ).
The cost of natural gas as delivered by an import facility might thus vary between an expected minimum of US$ 4.50 per GJ and an expected maximum of $ 11.00 per GJ.
The levelised cost of electricity of this option as delivered in South Africa is thus expected to vary between $ 0.06/kWh and $ 0.11/kWh, as estimated from US$ [0.00714 x (natural gas cost, US$/GJ) + 0.03113] per kWh.
Grand Inga dam
The conclusion is thus reached that if a natural gas cost of less than approximately $12.5/GJ can be assumed, gas-fired power stations should be preferred to nuclear power plants as an economic feasible option to provide in South Africa's anticipated 2030 electricity shortfall of ca 76 000 GWh.
This approach will also bring about a reduction in the overall carbon footprint vis-á-vis new coal-fired power stations.
In respect of a long-term view, it would be advisable for the South African government to pro-actively engage itself in the development of the Inga hydroelectric dams in the Congo river to indeed turn this project into the world's largest hydroelectric scheme to benefit the whole of Africa south of the equator.
The current capacity of the Inga I and Inga II hydroelectric power stations are respectively 351 MW and 1 424 MW, but upon completion of the Grand Inga dam somewhere in the 2020's an additional capacity of 39 000 MW is envisaged with an expected annual production of 250 000 GWh electricity at an implied 73% capacity factor.
*Dr Peter van Berge is a chemical engineer who worked at Sasal Technology’s Research and Development division for almost 30 years.
