Medupi finished — but R154 billion over-budget

Eskom announced that the Medupi Power Station project’s last of six generation units has attained commercial operation status and was handed over to the power utility’s Generation division.

The capital cost of the project is R122 billion so far, and Eskom said it expects to spend no more than R135 billion in total on completing the plant.

However, energy expert Chris Yelland said in 2019 that the cost-to-completion estimate for Medupi was R234 billion when factoring in flue gas desulphurisation and capitalised interest during construction.

Based on this estimate, the Medupi project will overrun its initial R80 billion budget by R154 billion.

Stated differently, Medupi will cost the South African taxpayer almost three times what it was originally budgeted to.

“What remains for the Medupi project is the last part of implementing the agreed technical solutions related to the boiler design defects on the balance of plant,” said Bheki Nxumalo, group executive for Eskom’s Group Capital Division.

“Once these repairs are completed during the next 24 months, Medupi will reliably deliver power to the national grid at full capacity, helping increase energy security for the country.”

Built close to Eskom’s Matimba power station in the Lephalale district of the Limpopo province, Nxumalo said that the commercial operation of Medupi’s Unit 1 is a historic milestone as it signifies the completion of construction for the power station.

The project began in May 2007 and has a planned operational life of 50 years. Medupi is rated to generate 4,764MW of power.

The commercial operation status means technical compliance to statutory, safety and legal requirements have all been met.

The unit was officially declared commercial after the completion of the unit optimisation, control demonstration, as well as the 72-hour and the 30-day reliability run, which have put all performance guarantees into effect.

Unit 1 was first synchronised to the national grid on 27 August 2019 and reached the full load of 794MW on 05 December 2019. During this testing and optimisation phase, Unit 1 contributed intermittent power to the country’s electricity supply.

It was on 23 August 2015 when the first unit, Unit 6, attained commercial operation status. Over the following six years four other units were built and brought to commercial status, providing electricity to the national grid.

Eskom said it has been working with the nearby communities in the Limpopo province since construction of the project began.

More than 4,600 artisans, technicians, engineers and managers were formally trained by Eskom’s contractors — exceeding its local skills development target of 3,071. Over 60% of the beneficiaries were local residents and from Limpopo province.

As part of the Medupi legacy project, Eskom said it invested more than R2.9 billion on socio-economic development initiatives to address some of the immediate social needs of the local communities.

At its peak during construction, the Medupi project directly employed more than 18,000 people on building activities, while another 2,000 supporting employees were employed on site.

Medupi Power Station

The Medupi Power Station uses direct dry-cooling systems due to the water scarcity in the Lephalale area and is the fourth-largest coal-fired plant and the largest dry-cooled power station in the world.

The power plant incorporates supercritical technology, which is able to operate at higher temperatures than Eskom’s earlier generation of boilers and turbines.

This technology lets the power plant operate with greater efficiency, resulting in better use of natural resources such as water and coal and will have improved environmental performance.

Earlier this year, energy expert and managing director at EE Business Intelligence Chris Yelland summarised the major work that still lies ahead to fix the design problems at Medupi and Kusile:

  • Mills: Eleven modifications were agreed to be implemented – initially in a matrix across the five mills of Medupi Unit 3 in order to determine the performance of the modifications and their interdependencies.
  • Pulse jet fabric filter (PJFF) plant: The modifications include redirecting the flue gas inlet to the bag filter, and equipment changes to the pulsing systems used for cleaning the fabric filter bags during operation. A new set of fabric filter bags are also to be installed after the modification.
  • Gas air heater (GAH): Modifications to the gas air heaters include internal erosion protection and modifications to the pin rack driving the rotation of the gas air heaters.
  • Hot air duct erosion: Solutions for erosion protection in the various hot air ducts include fitting of ceramic tiles and combinations of ceramic tiles and wear resistant metal plates in the hot air ducts.

Yelland said that that it has become clear there is still a long way to go before the Medupi and Kusile coal-fired power stations will operate at the level of performance originally intended.

“Indeed, it is becoming apparent that this performance will likely never be achieved,” he said.

“The direct costs of the efforts to improve the performance of Medupi and Kusile, the indirect costs of their poor performance on lost production and lost sales, and the cost to the economy due to load shedding, is truly enormous and still to be calculated.”

Now read: Eskom’s R146 billion plan to move away from coal

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Medupi finished — but R154 billion over-budget