The JSE-listed group has already increased its power generation to beyond the 500 MW it previously produced, which represented about one-third of Secunda’s 1 500-MW power demand.
It recently completed the installation of two open-cycle gas turbines (OCGTs), which added 200 MW to its generation mix. The plants are fuelled by gas piped to Secunda from Mozambique and are based on standard General Electric frame 9E technology.
Manager for strategic sourcing of utility energy Piet van Staden says that work is now proceeding on the installation of heat recovery steam generators that will convert the facility into a combined-cycle gas turbine by June and add a further 80 MW of capacity.
In total, the 280-MW capacity expansion will cost about R2,5-billion to complete, but is considered a sound investment from both an economic, as well as from a security of supply perspective.
The project has been approved by the National Energy Regulator of South Africa (Nersa) to access Eskom’s medium-term power purchase programme, or MTPPP, which is funded through the tariff.
The Secunda facility is one of only a handful of plants that have been sanctioned as MTPPP recipients, whereby power will be sold to Eskom at rates better than the prevailing electricity tariff up to the point where the price path intersects with that of the incentivised tariff.
Van Staden says that Sasol is interrogating a range of other electricity-related projects in order to contribute to mitigating what could be a consolidated shortfall of 1 500 MW in South Africa between 2011 and 2016, ahead of the introduction of new Eskom base-load capacity.
Besides the 280 MW from Secunda, Sasol is considering various demand- and supply-side projects that could reduce that deficit by about 200 MW.
Another own-generation option could include the development of gas-fuelled generating capacity of 140 MW at Sasolburg. However, part of that capacity would be used to replace a 70-MW power plant at the complex – the existing plant has been operating for 55 years and needs to be retired.
Van Staden acknowledged that the Secunda project had been made less complicated by the fact that “no electrons” would be fed into the Eskom grid – Sasol was effectively buying back all it sold to Eskom in real time.
Therefore, no wheeling is necessary, while dispatching was internalised.
By contrast, projects being considered by Anglo American and Xstrata to produce electricity using discard coal would have to be wheeled. Xstrata confirmed its own-generation plans when announcing that it would be proceeding with a R4,9-billion ferrochrome expansion.
The Secunda OCGTs began operating in July, after Nersa licensed them in May and Eskom confirmed a power purchase agreement under the MTPPP.