Eskom set to fire up Limpopo's economy
August 27, 2006
By Justin Brown
Johannesburg - Lephalale is a sleepy hollow surrounded by savannah and acacia trees at the heart of the Waterberg bushveld, with a skyline dominated by the twin smoke stacks of the 4 000 megawatt Matimba power station.
Lephalale's population will triple over the next 10 years as Eskom expands its electricity generation network and the nearby Grootegeluk coal mine grows to supply the new power station.
Two years back, Limpopo's annual gross domestic product was R93 billion.
In July there were good economic tidings for the province's 5.4 million people.
Eskom said it would build its first new power station since the 1980s near Lephalale at a cost of R26 billion.
The new power station in Lephalale would change the face of the Waterberg bushveld, Lephalale mayor Rosina Mogotlane said this week.
Power generation is the major activity in Lephalale, making up three-quarters of the value of the local economy.
About 7 500 jobs will be created during the construction phase of the second Lephalale station and during the expansion of the Grootegeluk mine, which is owned by Kumba Resources.
Grootegeluk is South Africa's largest coal mine.
Last year it produced 17.7 million tons of coal, of which 14.2 million tons went to Eskom.
Kumba wants to expand Grootegeluk's annual coal output to 45 million tons over the next 15 years to meet growing electricity demand and more exports.
"The new power station at Lephalale will have a very significant impact on the economy of the Limpopo province.
"It will also give Limpopo the chance to facilitate investment in the processing and value addition of coal," said Moses Tseli, Limpopo's department of economic development, environment and tourism spokesperson.
The expanded coal mining at Grootegeluk opens the way for more economic opportunities such as the conversion of coal into chemicals, coal bed methane and coal briquetting.
Philip Lloyd from the University of Cape Town's Energy Research Centre said the Bergius process could use Grootegeluk's coal to produce aromatics, which are used to make petrol and plastics.
The Bergius process is a method of extracting liquid hydrocarbons for use in synthetic fuel from coal. The process was discovered by the Nobel prize winning German chemist, Friedrich Bergius, in 1921.
Petrochemicals group Sasol uses the Fischer-Tropsh process technology, also developed by German scientists in the 1920s, at its facility in Secunda in Mpumalanga to turn coal into fuel.
Sasol had extensive coal resources in the Waterberg coalfields, said spokesperson Johan van Rheede.
Sasol and the South African government are in talks over the possibility of building a Sasol 4 CTL plant to meet growing fuel demand. Sasol 3 was completed in early 1980s.
The Waterberg coalfields are in the Limpopo province and extend into Botswana.
Earlier this month, the South African and Botswana governments agreed to build a power station in the Waterberg coalfields in Botswana.
Implementing the Bergius process would give South Africa another exportable technology such as Sasol's Fischer-Tropsch process, Lloyd said.
He said the feedstocks that could be produced from the Bergius process would be polyethylene, polypropylene and styrene, which can be used to make chemicals and plastics.
"There is almost certainly room for three world-scale downstream plants, to meet the likely local demand once we are no longer reliant on imported materials," Lloyd said.
"There is great potential in producing chemicals from Grootegeluk coal."
AngloCoal is exploring the commercial potential of coal bed methane in the Waterberg area.
Coal bed methane is the methane found in coal seams.
Methane from coal is a well-established source of gas in the US and Australia.
Gas from coal accounts for about 7 percent of the total natural gas output in the US.
Another opportunity that the Council for Scientific and Industrial Research is looking at is coal briquetting, a process to combine fine coal power into regular-sized lumps.
The new station forms part of Eskom's R97 billion five-year expansion to boost South Africa's electricity supply in the face of increasing demand.
Earlier this week, an Eskom official who declined to be named said that the utility could build eight power stations in the Waterberg over the next 20 years as South Africa's energy supply almost doubled.
"There are big opportunities in the Waterberg. Eskom has a very clear focus on the Waterberg - more and more so," he said.
At a time when the Witbank coal fields are declining, it is estimated that the Waterberg holds 40 percent of South Africa's remaining coal resources.
The Waterberg has 163 billion tons of coal reserves and 3.54 billion tons of coal that can be mined.
The Eskom official said that it would make sense for half of the eight new power stations to be built in the northern parts of South Africa's major coalfields, located in the north eastern part of the country, and the remaining half to be established in the southern parts of the coalfields.
A batch of new power stations could pose a pollution threat to the Waterberg area, which the UN has declared a biosphere reserve and a natural heritage site.
The Matimba power station was built in the 1980s due to concerns about the air pollution levels around Witbank.
The expansion of electricity generation in the Mpumalanga Highveld and Gauteng would be limited due to pollution in those two areas, opening the way for power stations to be built in the Waterberg, said Kumba Resources manager Piet Nel.
The department of environment and tourism has demanded that Eskom reduce the sulphur emissions from the new power stations in the Waterberg by 70 percent.
However, an Eskom official said such a demand would be "ludicrous".
Peter Lukey, the department's chief director of air quality management and climate change, said the 70 percent reduction in sulphur emissions was "a guideline" and the department would make a final decision regarding the new power station within the next weeks.
Power stations resulted in a "dramatic increase in emissions", Lukey said.
Emissions from power stations can include sulphur dioxide, which causes acid rain, and carbon dioxide, which results in global warning.
These stations also emit nitrogen oxide.
Carbon capture was expensive and the process was only at the experimental phase, Lukey said.
South Africa's emissions guidelines were "strict" relative to international standards, he added.
The department would ensure that new power stations did not damage the environment or human health.
Lukey indicated that the department might be less onerous about the Lephalale area than a new power station located in the Vaal area, which was very polluted.
Matimba is the largest direct air-cooled power station in the world, and is an innovation brought about by the severe water shortage in the area.
Water affairs and forestry department's Beyers Havenga said the department was investigating options to meet strong water demand from Lephalale until 2025.
Water demand at Lephalale was expected to grow from 26 million cubic metres in 2005 to 63 million cubic metres by 2025.
Rail utility Spoornet is considering to move more coal for export from the Waterberg.
Spoornet intends to ship coal from Lephalale to the Richards Bay coal terminal, Maputo, Saldanha or the Port of Ngqura at Coega.
Thirty million tons of coal could be exported from the Waterberg, which could justify the investment by Spoornet.
Kumba Resources was exporting 3 million tons of coal from Grootegeluk and by 2018 exports should climb to 13 million tons, Nel said.
"There is a lot of potential in the Waterberg," he said.
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