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Morupule Coalfired Power Generation Expansion Project

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Title: Morupule Coalfired Power Generation Expansion Project


1
Morupule Coal-fired Power Generation Expansion
Project
  • By
  • Chandapiwa Macheke
  • Martha S. Kelesitse

2
Introduction
  • Country background information
  • The project

3
Country information
4
Economic overview
5
Economic growth of the country
6
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.

7
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

8
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

9
Morupule Power Project
10
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.

11
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.

12
Morupule Power Station
13
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).

14
Botswana National Grid
15
Power Statistics
16
Unit electricity sales by sector
17
Current Tariff Structure
18
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.

19
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)

20
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.

21
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.

22
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.

23
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 US600
    million and unit cost of US1,500/kW.
  • Expected year of project commencement 2006

24
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
    US800-1000 million for 600 MW new capacity.
  • The cost and access to these technologies is a
    barrier.

25
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.

26
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?

27
Thank you Cmacheke_at_gov.bw Kelesitses_at_bpc.bw h
ttp//www.bpc.bw
http//www.gov.bw
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