Small towns could pay the price for big cities' power
August 15, 2007
By SAMANTHA ENSLIN-PAYNE
Durban - The Mpumalanga town of Ermelo is booming, and this could be a sign of things to come for Lephalale in Limpopo.
But the benefits power stations bring, such as job creation and a boost to local economies, can be overshadowed by costly environmental damage.
Ermelo is a case in point.
In 2004 Eskom began spending R5.2 billion to return to service the 1 580 megawatt Camden power station near Ermelo. The power station, which was commissioned in 1969, cost R126 million to build.
Now construction of the first power station to be built in 20 years, a R80 billion 4 500MW power station called Medupi at Lephalale, has begun.
Medupi will boost Eskom's base load capacity, improving the reserve margin between available supply and demand, which, at about 8 percent, is dangerously slim.
The first unit at Medupi will come on stream from 2011. By 2015, this dry-cooled thermal power station will be fully operational.
Along with other Mpumalanga power stations - Grootvlei near Balfour and Komati between Middelburg and Bethal - the Camden plant was mothballed in the 1980s during a period of surplus generating capacity. But with slim reserve margin and rising demand, reviving these power stations is one measure to add capacity.
A further 2 161MW will come on stream when Grootvlei and Komati are returned to service between the end of this year and 2011.
Ermelo is experiencing something of a heyday.
Three shopping centres with major national chains have sprung up and housing estates are being built. Empty houses are being reoccupied and more bed and breakfasts are opening to cater for contractors.
Seventeen years ago, when Camden closed down, Ermelo's economy struggled. For years, many shops on the town's main street stood empty.
Athol Stark, the chairman of Grass and Wetlands Tourism, which operates in southeastern Mpumalanga, says: "When one of the town's largest employers pulled out and most Eskom people left, there was apprehension about the future of the town. The perception that Ermelo was in a slump meant those thinking of investing dropped their plans."
But with a concerted effort by locals to market tourism drawcards such as rock art, a Stone Age settlement and a lake district of 270 lakes in a 20km radius, the town managed to pick itself up prior to Camden's revival.
Stark says the news a few years ago that Camden was to be demothballed "was a nice big cherry on the top of the cake which had already been delivered".
The billions being spent on Camden's return to service is mostly going to big contractors based elsewhere. But a reasonable number of local people have been employed.
"Increased disposable income for locals and from contractors has had a definite kickback in the town's economy," Stark says.
The prospects for Lephalale could be equally promising.
During the construction of Medupi, 9 000 jobs will be created. People will need to be fed, accommodated and entertained during the eight years of construction.
Coupled with this is the R3 billion expansion of Exxaro's Grootgeluk coal mine, which has a long-term contract to supply about 8.5 million tons of coal to Medupi a year.
The area already has one power station, the 4 000MW Matimba, where 750 people are employed.
When work began on Camden, it had "an unprecedented impact on the goodwill of the town", Stark says.
But the goodwill is quickly being eroded. Since it began operating one unit last year and several more this year, Camden has cast a shadow over Ermelo, and residents are becoming vocal in their opposition.
Camden, a coal-fired power station, is not sourcing its coal from the nearby mine. Instead, thousands of coal trucks rumble through Ermelo, delivering coal day and night. There have been fatalities, roads have been damaged, and residents have had to contend with coal dust and noise.
Some of these trucks, which are also on their way to Majuba power station between Volksrust and Amersfoort, have resulted in guesthouses on the main route into town closing down to due the traffic volumes.
"A small municipality is now faced with the burden of a national problem," Stark says. It does not have the financial capacity to repair damaged roads and has too few traffic officers to monitor traffic.
Stark says each of 750 trucks travels through Ermelo three times a day, meaning that every 39 seconds, a coal truck drives through the town.
Steve Lennon, Eskom's managing director of resources and strategy, says coal transport has picked up a lot. Some of this is for Eskom power stations, but some is for export. Eskom is investigating mining at the coal mine near Camden.
Eskom said in its annual report that purchases from short- to medium-term coal contracts were below target because of a shortage of suppliers caused by the delay in issuing mining licences.
The construction of the Ermelo-Majuba railway line has been approved by the government. The line will be operational by 2011, but until then, road transport and general freight rail will be used.
In Lephalale coal will be transported from Grootgeluk to Medupi on a conveyor belt. But other issues have sparked concern.
Richard Worthington, a spokesperson for EarthLife Africa Johannesburg, which appealed against the environmental approval for Medupi, says there is concern over inadequate studies done as part of the environmental impact assessment (EIA), which did not specify the desulphurisation technology that would be used.
The record of decision gave the power station the green light on the basis that it adhere to the law. But air quality standards have not yet been drawn up, which means there is a risk that Medupi might not have the appropriate technology to meet emission standards. It might then successfully argue that it is too costly to comply.
"Making a record of decision conditional on the setting of standards worries us," Worthington says.
Earthlife Africa is concerned about new coal-fired power stations in the absence of an energy development plan that meets the criteria for integrated energy planning.
According to the information in the EIAs on the new coal power stations, these plants will result in national greenhouse gas emissions increasing by about 25 percent, Worthington says.
The macroeconomic impact of additional coal-fired power stations has not been researched.
The full cost of coal-fired power stations is not borne by the operator. There is a cost for society. Ermelo is a case in point.
"It is almost unbelievable that a small town like Ermelo and other towns around us must pay such an astronomical price with our health and welfare so that other cities can be provided with energy," Stark says.
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