Why South Africa is using powerships to combat energy shortage

Hanno Labuschagne

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Why South Africa is using powerships to combat energy shortage

Energy minister Gwede Mantashe announced the preferred bidders for the government’s emergency risk mitigation IPP programme in March, which include three liquid natural gas powerships.

The Risk Mitigation IPP Procurement Programme (RMIPPPP) aims to alleviate South Africa’s electricity supply constraints and reduce the use of diesel-based generators.

Two-thirds of the new RMIPPP programme – 1,220MW of the 1,845MW – went to a single company, Karpowership SA.
 
This is going to be a mess. An expensive mess, stacked with cadre deployment, BEE and general trough snuffling.

If I am still alive in twenty years, when these contracts expire, and you feel different you can call me out then.

For starters, the contracts are WAY too, long, and and and and... Every answer the DDG gave has a big "but" hanging over it.
 
These power ships can provide base load power. Solar, wind and battery alternatives cannot.

Still, a pity that Eksdom has mismanaged themselves, and the country, into such a hopeless corner
 
you are better off investing in solar and go off grid, especially if you are a big power user. Any person paying more than R4k a month in electricity will find solar a viable alternative. The problem comes with low power users where the capital expenditure is not justified over a 10 year period. Those are the poor okes who will pay the price for these ships.
 
This is going to be a mess. An expensive mess, stacked with cadre deployment, BEE and general trough snuffling.

If I am still alive in twenty years, when these contracts expire, and you feel different you can call me out then.

For starters, the contracts are WAY too, long, and and and and... Every answer the DDG gave has a big "but" hanging over it.

If an energy provider built a power plant near these ports instead of sailing a boat into a harbour, not much would change here except the price of the electricity supplied.

The world is full of international players in the energy business and these IPPs are private companies out to make a profit. Many of them are involved in the other 5 projects on this programme and many more will be involved in the future projects being released now and in the near future. For all of them, 20 years is a normal design life span of a plant and the O&M contract.
 
you are better off investing in solar and go off grid, especially if you are a big power user. Any person paying more than R4k a month in electricity will find solar a viable alternative. The problem comes with low power users where the capital expenditure is not justified over a 10 year period. Those are the poor okes who will pay the price for these ships.
Disagree a bit as solar is viable from a much lower base. Even if you spending R1k per month (excl. connection fee), off grid is more viable. The problem is capital and many dont have roof space.
P.S: i am basically off the grid :)
 
Before everyone screams conspiracy and money down the drain there is method behind the power ships. Solar and storage are just not a realistically viable alternative. Hang on to those pitchforks for a second, let me explain the reasoning.

  1. The approximately R20 billion a year includes all costs to Eskom. This translates to +-12,100,000,000 kWh @ R1.65/kWh that Eskom can sell to municipalities/direct customers. So the costs are passed on to the customers who actually use the power.
  2. Solar at best will provide 20% capacity factor, i.e. 20% of the nominal installed capacity over a whole day because it's sunshine dependent.
    1. So a 1220 MW power ship can output 1220 MW * 24 hours = 29 280 MWh/day
    2. A similar 1220 MW solar plant can only do 1220 MW * 24 * 20% (at best) = 5 856 MWh/day
  3. To generate the same amount of energy you would need a solar farm 5x as large, however this power would only be available during the day....because of the sun...
  4. To make it available at night you would have to install storage. Currently the price is approx. $500/kWh for a commissioned commercial battery system. Let's say Eskom would get a super sweet deal for $400/kWh. To make that extra 29 280 - 5 856 MWh = 23 424 MWh (23,424,000 kWh) available during the night would cost 23 424 000 kWh * $400/kWh = $9 369 600 000...approx. R136 000 000 000.
  5. But the solar system still needs to be purchased so let's say it costs R10 000/kWp...meaning 1220 MW * 5 (see nr. 3) = 6 100 MW = 6 100 000 kW --> 6 100 000 kWp * R10 000/kWp = R61 000 000 000
  6. So on paper the upfront costs for Eskom would be R136 000 000 000 + 61 000 000 000 = R197 000 000 000....you would say well that's like R3bn cheaper than the power ship deal...but...
  7. You're forgetting about maintenance costs over the lifetime of the systm
    1. The batteries would inevitably have to be replaced at some point during the next 20 years and with a system so large there would inevitably be component failure over the 20 year lifetime. You would require at least 160 million solar panels to put things into perspective...
So it it cheaper? Probably not.
Does Eskom have R200bn today to spend on installing solar + storage? No they don't.
Does it make sense to buy power from power ships and outsource all maintenance and procurement activities for fuel and just pay a per kilowatt hour charge to reduce the strain on the gird? Yes it does.

There is method behind the supposed madness...

Edit: The power ships will only add approximately 3% to the grid's capacity so the risk of a price doubling etc. is not realistic.
 
Crazy, as this should be a short term solution, not something 2/3 of a lifetime of a coal power plant. As I understand it Eskom is not themselves putting up solar and wind farms - they buy the electricity from investor funded farms which are up and running within 2 years. These ships have zero investment value for us anyway, and their pollution needs to also be factored in.

Apart from the fact battery tech is getting cheaper and better (and re-using 2nd hand EV batteries is viable for static storage) there are also other storage technologies for renewables like hydro, mine shafts (do we have any old mines), fluid batteries (which are more efficient I understand), molten salt, and other forms. It's true renewable energy is variable hence why storage is important, but the ships should be used until we can get our new coal stations fully online to act as the base load generation. Where are our incentives for home users etc to be installing more solar and wind themselves? I have my own solar with some battery storage so I only draw off-peak power from about midnight to 9am daily. If there was more of this we'd smooth out our demand curve more. We have all this compliance for houses with plumbing, electrical, etc so why not require a minimal amount of solar/battery to be installed with new houses. I just the feeling that for 20 years no planning or maintenance has been done - now we face a crisis, and it will cost us big time. Some EV vehicle fleets in the EU are using their batteries to help stabilise the grid.

To think Cape Town had two coal power plants right next to their harbour - both were decommissioned due to end of life, but also masses of air pollution. It is just such a pity that firstly our base load coal stations should have been up and running many years back, and that I fear any 'cleaner' nuclear solution will take 10+ years for us to build.
 
Before everyone screams conspiracy and money down the drain there is method behind the power ships. Solar and storage are just not a realistically viable alternative. Hang on to those pitchforks for a second, let me explain the reasoning.

  1. The approximately R20 billion a year includes all costs to Eskom. This translates to +-12,100,000,000 kWh @ R1.65/kWh that Eskom can sell to municipalities/direct customers. So the costs are passed on to the customers who actually use the power.
  2. Solar at best will provide 20% capacity factor, i.e. 20% of the nominal installed capacity over a whole day because it's sunshine dependent.
    1. So a 1220 MW power ship can output 1220 MW * 24 hours = 29 280 MWh/day
    2. A similar 1220 MW solar plant can only do 1220 MW * 24 * 20% (at best) = 5 856 MWh/day
  3. To generate the same amount of energy you would need a solar farm 5x as large, however this power would only be available during the day....because of the sun...
  4. To make it available at night you would have to install storage. Currently the price is approx. $500/kWh for a commissioned commercial battery system. Let's say Eskom would get a super sweet deal for $400/kWh. To make that extra 29 280 - 5 856 MWh = 23 424 MWh (23,424,000 kWh) available during the night would cost 23 424 000 kWh * $400/kWh = $9 369 600 000...approx. R136 000 000 000.
  5. But the solar system still needs to be purchased so let's say it costs R10 000/kWp...meaning 1220 MW * 5 (see nr. 3) = 6 100 MW = 6 100 000 kW --> 6 100 000 kWp * R10 000/kWp = R61 000 000 000
  6. So on paper the upfront costs for Eskom would be R136 000 000 000 + 61 000 000 000 = R197 000 000 000....you would say well that's like R3bn cheaper than the power ship deal...but...
  7. You're forgetting about maintenance costs over the lifetime of the systm
    1. The batteries would inevitably have to be replaced at some point during the next 20 years and with a system so large there would inevitably be component failure over the 20 year lifetime. You would require at least 160 million solar panels to put things into perspective...
So it it cheaper? Probably not.
Does Eskom have R200bn today to spend on installing solar + storage? No they don't.
Does it make sense to buy power from power ships and outsource all maintenance and procurement activities for fuel and just pay a per kilowatt hour charge to reduce the strain on the gird? Yes it does.

There is method behind the supposed madness...

Edit: The power ships will only add approximately 3% to the grid's capacity so the risk of a price doubling etc. is not realistic.
If I can do solar plus storage for under R1.50/kWh for a single house, why would a bigger grid sized solar plus storage system cost more per kWh. Surely your have scale on your side and not paying R5 000 per kWh for lithium batteries or R8 000 per kW for solar panels.

I could probably spec a central micro grid for the 20 houses in my road with off the shelf inverters currently on the market with 500kWh of lithium for under R1.40/kWh. Only thing I really need is the space for the panels, inverters and batteries. Pylontech batteries are about R5 200/kWh currently. I'm sure if I ordered 100 UP5000(4.5kWh) pylontech batteries directly from them it would be less than R4 000/kWh.
 
Why South Africa is using powerships to combat energy shortage

Energy minister Gwede Mantashe announced the preferred bidders for the government’s emergency risk mitigation IPP programme in March, which include three liquid natural gas powerships.

The Risk Mitigation IPP Procurement Programme (RMIPPPP) aims to alleviate South Africa’s electricity supply constraints and reduce the use of diesel-based generators.

Two-thirds of the new RMIPPP programme – 1,220MW of the 1,845MW – went to a single company, Karpowership SA.

It's the quickest way to STEAL MONEY. ANC is not developing longterm proper solutions as those making the decisions now may not be here long enough to cash in. Its blatant misuse of the peoples money and they should be charged
 
That answer to the last question is fckin bonkers

Couldn't get any cheap solutions short term (fair...I can see that)...so we went with the expensive (fair...sht happens) and then

opted for the long-term commitment, to ensure reasonable electricity unit cost

uhm what? So of all the options they went for the most expensive and then decided now let's lock in this rate for the next two fckin DECADES?

Watch this will be exactly like eTolls. Terrible contract...but cast in stone so now the country is contractually bound & thus stuck short of causing a diplomatic incident.

It is possible that CPI escalation on the renewable projects might be much higher than the US Dollar / Rand exchange rate and gas price escalation applicable to the powership projects.
It is also possible that I win the lotto next year. I don't plan my spending now based on lady luck delivering though

These power ships can provide base load power. Solar, wind and battery alternatives cannot.
Baseload with LNG? That's gonna be a fun electricity bill

RMIPPPP: Seems like all the government indicates bad ideas by repeating letters in acronyms for their brain farts...
Risk mitigation cause they are trying really hard not to call this emergency procurement ;)
 
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