Joburg to get gas-fired power plants

Harith General Partners, which funds infrastructure development across Africa, is pushing ahead with plans to build the first gas-fired power plants in South Africa’s industrial hub of Gauteng and is exploring options to source the fuel.

The fund manager wants to build two gas-fired plants at the site of its coal-fired Kelvin Power Station, which lies east of Johannesburg close to the city’s main airport. The government’s energy blueprint, known as the Integrated Resource Plan, includes proposals to bring gas to the region from 2023 at the earliest, and that target isn’t ambitious enough, according to Sipho Makhubela, Harith’s chief executive officer.

“It’s further out than we would desire. We are working on shortening that time frame because we can’t wait that long,” he said in an interview last week. “The bottlenecks are holding us back.”

South Africa has suffered intermittent power outages since 2008 because of inadequate generation capacity and the poor state of some plants owned by state utility Eskom Holdings SOC Ltd.

Coal Dependency

The country is also almost entirely dependent on electricity generated from coal and is under pressure to reduce its greenhouse gas emissions. Gas, while a fossil fuel, is less harmful to the environment than coal. The new plants could jointly produce between 450 megawatts and 700 megawatts of power, depending on the technology used, Makhubela said.

“The economy needs security of supply, especially base-load supply,” he said in reference to power that’s accessible around the clock. “This would be base-load supply.”

A first gas plant that’s 60% owned by Harith and 40% held by the Public Investment Corp., which manages state workers’ pensions, could be built on the site of an idle Kelvin unit. The second plant could then be constructed on another site once a power purchase agreement is concluded between Kelvin and the City of Johannesburg, he said.

Harith is considering bringing in liquefied natural gas by road or rail, or buying gas from Sasol Ltd. to fuel its new plants.

Elsewhere on the continent, Harith expects to conclude a road deal in East Africa soon, a port project in West Africa, rail deals in southern Africa and expand its telecommunications interests, Makhubela said. Still, energy remains a key focus.

“The energy pipeline never stops running,” he said.

Now read: Eskom in a death spiral – IRR

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Joburg to get gas-fired power plants