Troubled Eskom to ‘repurpose’ old thermal plants

Coal Insights Bureau

South Africa’s state-owned power utility monopoly Eskom Holdings SOC Ltd which supplies close to 95 percent of the country’s thermal energy need, is moving away from coal as a survival strategy burdened with aging plants and demand slump and to take benefit of financial incentive for using renewable energy.

The decision comes at a time when the power major has suffered three consecutive years of loss touching $1.3-billion in the year ending March 2020.

“As older power stations approach their economic end of life, we are investigating the impact on surrounding communities when the time comes for retiring or repurposing existing coal-fired units or stations; this will inform plans for shutting down these power stations. The use of operational units at these stations is being reviewed for extended use beyond 2025 or until sufficient new capacity comes online,” André de Ruyter, Group Chief Executive said in the recently released annual report.

“We are considering a repurposing programme to investigate projects that may provide alternative employment, and potentially create opportunities and jobs to support economic activity using the available power station land and infrastructure. Conceptual mitigation plans are being investigated, such as repowering with renewables or gas, repurposing or extension of existing services. To this end, we are implementing our Just Energy Transition Strategy, specifically regarding the repurposing of power stations,” he added.

As older power stations approach their economic end of life, we are investigating the impact on surrounding communities when the time comes for retiring or repurposing existing coal-fired units or stations; this will inform plans for shutting down these power stations. André de Ruyter, Group Chief Executive

Energy transition strategy

Eskom has set up the ‘Just Energy Transition Strategy’ initiative focuses on:

♦ Commitment to a lower carbon future

♦ How repurposing and renewables plans contribute to meeting this goal

♦ Impact of this approach on all environmental goals – air quality, carbon emissions and water, with no compromise on environmental integrity

♦ Impact of this approach on socioeconomic factors, including dealing with shutting down coal-fired stations

♦ Medium- to long-term technology requirements and the associated financing and policy enablers

♦ How to attract and sustain financing for initiatives

Based on a life of plant of 50 years, approximately 12,000MW of coal-fired capacity is expected to be shut down by 2030.

The pace of this transition must consider the capacity of the electricity supply system, elements of the value chain, employees, suppliers and communities surrounding the power station to adapt.