Astronomical costs for power station repairs justified
The benefits and demand for refurbishing Pretoria’s two power station was worth the massive amounts and challenges presented in getting the two entities up and running, the Tshwane metro believes.
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It would cost about R9.5 billion to get Pretoria’s two ageing and crippled power stations up and running efficiently, but the demand for energy justified the astronomical amounts, the Tshwane metro said on Tuesday.
Tshwane mayoral spokesperson, Blessing Manale said all factors had been taken into consideration before the decision had been taken to get the two entities back on the grid.
He was reacting to claims that the cost of refurbishing and introducing new technology to Rooiwal and Pretoria West power stations far outweighed the financial benefits of doing so.
The total project cost to refurbish Rooiwal would be R9,2 billion while Pretoria West would cost some R300 million.
Industry experts and current and former employees at the power stations have rubbished a claim that once up and running at full capacity, Rooiwal and Pretoria West could generate some 900 Mega Watts of electricity.
An engineer currently employed at the mothballed power station said: “It would cost billions and mean that Rooiwal power station will have to be doubled in size to generate 600 Mega Watts as claimed.”
Readers were reacting to a statement by Tshwane mayor Kgosientso Ramokgopa recently that the two power stations were currently running at 15% of capacity merely to keep processes going but that both would be taken over by the private sector in the near future.
Once refurbished and with new and modern technology brought in, Rooiwal would generate 600 MW while Pretoria West power station would add 300 MW to Eskom’s national grid, Ramokgopa told reporters.
He said Tshwane would not sell the two entities, but would lease them to the private sector.
Some 13 multi-national companies had already shown an interest but the two companies appointed by the metro would be announced soon.
“The two power stations owned by Tshwane are currently only nominally functioning and present a considerable drain on the city’s financial resources and without any significant contribution to the supply of electricity,” Manale told Rekord.
“While we agree that the costs of the projects might look astronomical, we believe that the demand and market for energy remain high and profitable.”
Manale said this demand was informed by among others, long-term plans by the metro which included major housing developments in the city, the development of the northern and eastern capital and the continuing growth in Soshanguve and also by manor catalytic projects on the inner city.
In handing over the power stations for lease to the private sector, Manale said several proposals based on high level principles were considered.
These included the funding and refurbishment of the Pretoria West station by the lessee for the use and generation of alternate fuel and the transfer of the assets and improvement to Tshwane at the end of the lease term, which would be 20 years.
He said revised Eskom tariff structures, current coal prices and repairs and refurbishments already undertaken by Tshwane had also been taken into consideration.
To obtain a financial break-even situation under the best operational scenario meant that a reduction of 36% in fuel costs must be achieved and fixed costs must be cut by 47%, Manale said.
He said that at Rooiwal financial key assumptions included the installation of two 150 MW turbine generators and adopting circulating fluidised bed (CFB) technology.
The R9,2bn price tag would include construction, project development and financing and other financial costs.
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