Kelvin Power Station: study launched to determine feasibility to convert it to gas
The study will also assess the potential for developing the Kelvin site into a gas distribution hub for Gauteng.
A $1.3-million (approximately R18.5-m) feasibility study has been initiated into the prospect of converting the coal-fired Kelvin Power Station into a 450 MW to 600 MW gas-fired power station.
The study will also assess the potential for developing the Kelvin site into a gas distribution hub for Gauteng, Creamer Media’s Engineering News reported on Tuesday.
According to the article, the 12-month study is being funded by way of a US Trade and Development Agency (USTDA) grant, which has been awarded to Novo Energy, a South African integrated natural gas company, owned by Harith General Partners.
USTDA Sub-Saharan Africa regional manager Jacob Flewelling told Engineering News Online that the study will be conducted by EHS Support, of the US, in partnership with Prime Africa of South Africa.
Kelvin Power Station was initially developed and owned by the City of Johannesburg in the 1950s and 1960s.
In 2001, the plant was sold to private investors, transforming Kelvin into the country’s only coal-fired independent power producer, backed by a 20-year power purchase agreement (PPA) with Johannesburg’s electricity utility, City Power.
Kelvin has since changed hands on several occasions and is currently owned by Aldwych, which, like Novo Energy, is also a Harith General Partners investment, according to Engineering News.
Gas sourcing will form a major portion of the study. The study will also assess prospects for using liquefied natural gas (LNG), which could, in future, be imported through Richards Bay in KwaZulu-Natal.
Both pipeline and rail logistics solutions will be assessed for transporting the gas from Richards Bay to Kelvin.
Novo Energy is driving the study, because of the importance of gas supply to the project. Without finding a way to secure gas, at the right price, one can’t even start looking at converting Kelvin to a gas-fired power station.
Although the PPA with City Power is due to expire in the next few years, USTDA believes there will be a strong incentive for City Power to enter into a new contract, particularly if Kelvin were in the position to produce lower-emission electricity from gas rather than coal.
Likewise, there is an incentive for Aldwych to extend Kelvin’s operational life, particularly as the plant is already integrated into the Gauteng network and has all the necessary regulatory licences and permits.
It is also believed there is significant potential to supply gas to industrial customers in Ekurhuleni, which remains one of South Africa’s main manufacturing hubs.
