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.

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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?

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