Eskom to invest R1bn to diversify its energy mix

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    ESKOM plans to invest R1bn over the next five years in underground coal gasification (UCG) research projects as it aims to diversify its energy mix and lower its carbon footprint.

    UCG is the process of converting in-situ coal reserves into gas, which Eskom plans to use as a feedstock for power stations. The large-scale commercial use of UCG in South Africa is not expected before 2020 but the technology is particularly promising as it may enable the exploitation of coal reserves that are not always viable to mine.

    Eskom, which has spent R1bn over the past decade to investigate UCG, estimates the technology could more than double the current recoverable coal reserves in South Africa.

    Its pilot project in Mpumalanga already provides gas to Majuba power station, although the scale of the project is small, contributing up to an estimated 30 megawatt (MW) of Majuba’s 600MW to the grid.

    Eskom and petrochemical giant Sasol both use Canada’s Ergo Exergy Technologies as technology partner. Steve Lennon, group executive: sustainability at Eskom said this week the companies would join forces to do further research and development work on UCG with the aim of improving the quality of the gas.

    “We’ve been looking at UCG for more than 10 years. What we’ve seen as we’ve undertaken this research is that UCG has great potential in South Africa in several areas. It will allow us to open up coal reserves that are not currently mineable,” Mr Lennon said.

    “We have identified a number of sites that could be suitable. The potential applications in South Africa are enormous.”

    In May, coal miner Exxaro signed formal agreements to partner with Linc Energy, which operates the world’s only commercial UCG operation in Uzbekistan, to develop UCG projects in sub-Saharan Africa. In terms of the deal, Exxaro will pay an upfront licence fee of A$20m (R190m) for the technology and a further A$7m if the initial Exxaro UCG project passes agreed performance tests, expected in 2017, Exxaro said.

    Some of the benefits of UCG include exploiting poor-quality or very deep coal reserves, and shortening the time line needed to benefit from the reserves as new mines do not have to be built. Challenges include adapting the technology, which requires the drilling of holes to pump air and oxygen into the coal reserves, to suit the geology of individual deposits.

    Test results on the effect of UCG on underground water reserves, one of the main concerns around the exploitation of shale gas reserves, have been “very positive” to date, Mr Lennon said.

    Eskom and Sasol will partner on the second phase at Majuba’s UCG project, which will allow the demonstration of the technology on a “much bigger scale”,  Mr Lennon said. The second phase of the project is still subject to environmental approval and the awarding of a water-use licence.

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