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Morupule Coal-fired Power Generation Expansion Project

Morupule Coal-fired Power Generation Expansion Project. By Chandapiwa Macheke Martha S. Kelesitse. Introduction. Country background information The project . Country information. Economic overview. Economic growth of the country. Political stability.

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Morupule Coal-fired Power Generation Expansion Project

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  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 – US$600 million and unit cost of US$1,500/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 US$800-1000 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.

  26. 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?

  27. Thank you Cmacheke@gov.bw Kelesitses@bpc.bw http://www.bpc.bw http://www.gov.bw

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