Wärtsilä is among companies eyeing opportunities in SA’s mooted gas-to-power independent power producer (IPP) programme that is expected to deliver 3 726 megawatts of electricity capacity as set out in a 2012 ministerial determinations.
The programme is expected to be a catalyst for the development of a gas industry in South Africa. Given the dearth of available natural gas in South Africa, liquefied natural gas will be imported.
Glossop said Eskom’s current priority was addressing unreliability as a result of increasing renewable energy intermittency and the ageing coal fleet. “That is what keeps them up at night,” said Glossop. He said coal power stations were not supposed to be ramped up quickly “beyond their design capability”.
He said a 5 percent renewable energy penetration heightened system unpredictability. He said gas was the ideal technology for flexibility because of fast start and stop times, as well as low start and stop costs. “Gas allows the other technologies to run the way that they are designed to. What the power system needs is flexibility,” he said.
Glossop said a flexible energy supply created greater system savings than a rigid energy supply. “South Africa must plan for flexibility. That is the only way to enable renewable energy to come into the system,” he said.
Commenting on Wärtsilä’s possible participation in the gas-to-power IPP programme, he said the company was likely to be part of a consortium. One of the company’s recent projects in South Africa was Sasol’s 180MW gas engine power plant project in Sasolburg.
After the October release of the preliminary information memorandum on the gas programme, he said Wärtsilä eagerly awaited the release of the request for qualification. “Until we know more about the programme, it is risky to commit too much,” he said.
Role of gas
Glossop lauded the draft integrated resource plan (IRP) for the substantial allocation towards renewable energy. In the base case scenario of the draft IRP, the Department of Energy has allocated renewable energy technologies a total of 55 000 MW by 2050.
“But something has to support that renewable energy capacity and that is where flexible gas plays a role,” he said.
In a speech earlier this year, Joemat-Pettersson also lauded the benefits of gas. “Such an opportunity to diversify from coal-fired generation brings the future benefit of greater access to international sources of financing which are already closed to conventional coal-fired generation.She said key guiding principles of the gas procurement programme were procurement transparency, competitive bidding, economic and socio-economic development and localisation requirements while minimising the burden on the fiscus.