Morupule Coal-fired Power Generation Expansion Project By Chandapiwa Macheke Martha S. Kelesitse
Introduction • Country background information • The project
Political stability • The Constitution of Botswana established a nonracial democracy which maintains basic freedoms. • One party (BDP) has been in power since independence. • Elections occur regularly (every 5 years) with many political parties (15) competing for leadership.
Botswana and the UNFCCC • Party status: UNFCCC – January 1994 • Kyoto Protocol – July 2004 • Reporting: INC – at COP-7 (2001 October) • Projects: • US Country Study Programme • Enabling Activity ($350 000) • Top Up ($100 000) • Preparation of TNA report • Capacity building of relevant government institutions, NCCC and DMS
Brief overview of the TNA report cont • Major findings • Potential for EST in coal application and biogas • Abundance of solar • Wastewater from water treatment plants. • Wind technologies • Energy efficiency • Treatment of brackish water • Agricultural technologies
Botswana Power Corporation • Botswana Power Corporation (BPC) is wholly owned by the Government of the Republic of Botswana. • Utility was established by an Act of Parliament. • BPC responsible for the generation, transmission and distribution of electricity in Botswana.
Project Background • BPC currently owns and operates 132 MW mine-mouth, dry cooled power plant at Morupule. • Morupule Power Station is situated near Palapye, in the Central District of Botswana.
Project Background (cont..) • Current system peak demand is 434 MW. • Demand satisfied through internal generation at Morupule ( net 120 MW) and imports. • BPC has Power Purchase Agreement (PPA) with Eskom which expires in Dec. 2007, for firm imports of up to 410MW. • The Southern African region faces diminishing surplus generation capacity, which is expected to be exhausted by 2007/10. • BPC is an active member of Southern African Power Pool (SAPP).
Project Description • BPC commissioned a generation expansion feasibility study. • Study recommended implementation of 400 MW by 2009/10, and a further 100 MW in 2018, and final 100 MW in 2023. • The project will be accommodated within the existing property at Morupule Power Stn.
Project Description (cont..) • As part of the feasibility, a coal resource assessment was done. • A 25 year mine plan developed indicated a resource in the order of 150 million tones of coal available. (national reserves – 32 billion tonnes total)
Project Description (cont..) • Nature of the coal is sub-bituminous with sulphur content averaging 1.5 %, ash content of 21%, moisture 4%, and ave. CV of 23 MJ/kg. • The base case for this project is conventional pulverised coal-fired boilers with ESPs.
Technical Aspects of the Project • The project is intended to immediately generate additional 400 MW from 4 x 100 MW units with a design life of 25 years. • The EIA scoping study for the project has been completed. • As a mitigation measure, the environmental performance of the project could be improved through use of cleaner coal technologies.
Technical Aspects of the Project (cont.) • We need technologies that reduce the quantities of emissions(NOx, SO2, particulates) including high efficiency technologies for coal to electricity conversion process (reduction of CO2, NOx). • Coal cleaning, low-NOx burners, scrubbers, Electrostatic Precipitators. • subcritical pulverised fuel, atmospheric fluidised bed combustion.
Finance/Economic Aspects of the Project • The current legislative framework does not allow direct private equity participation into BPC. • BPC intends to finance the project partly through equity, and balance through debt/grants. • The project (400 MW) is planned as follows: • 2009: 1st Phase – 2 x 100 MW • 2010: 2nd Phase – 2 x 100 MW • Estimated cost of 4 x 100 MW units – US$600 million and unit cost of US$1,500/kW. • Expected year of project commencement – 2006
Finance/Economic Aspects (Cont…) • The cost estimate include capital and all soft costs (project management costs, financial costs, interest during construction. • Employing high efficiency boilers or other cleaner coal technologies, costs could range US$800-1000 million for 600 MW new capacity. • The cost and access to these technologies is a barrier.
Finance/Economic Aspects • The capital cost estimates, indicate that an electricity price of US 2.75 c/kWh (BWP 13.75 thebe/kWh) at the power station busbar is sufficient to cover the total cost of the expanded power station over a 25-year design life period. • Currently, the cost of generation stands at BWP 9.50 thebe/kWh (US 1.90 c/kWh) as compared to the price of imports at BWP 11.50 thebe/kWh (US 2.30 c/kWh). • Indications are, expanding Morupule will have smaller impact on tariffs than continued imports from Eskom. • Therefore, from an economic, financial and tariff impact perspective, the project is feasible.
Morupule Power Project Engineering, Procurement and Construction Contracts • Once contracts for owners engineer and financial advisor in place, the procurement process for civil, electromechanical contracts, etc will be initiated Big Question… • How can BPC Project benefit from UNFCCC mechanisms? • How the UNFCCC process can assist BPC in the selection of the technological options?
Thank you Cmacheke@gov.bw Kelesitses@bpc.bw http://www.bpc.bw http://www.gov.bw