Medupi Power Station

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The Medupi Power Station is a coal-fired power plant currently under construction in Lephalale, South Africa.

Location

The undated satellite photo below shows the power station under construction in Lephalale.

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Background

The project comprises six 800 megawatt (MW) units to be provide a total installed capacity of 4,800 MW installed capacity. In November 2007 the public electricity utility, Eskom, stated that "the first unit is scheduled to be commissioned in 2012, with the last unit scheduled for commissioning by 2015."[1]

In July 2013 Eskom said that plant would be delayed until 2014, and fully commissioned by 2017, due to rising costs.[2]

The plant is projected to emit 32 million tons of Carbon dioxide equivalent a year. Eskom is in the process of developing a submission to seek carbon credits under the UNFCCC's Clean Development Mechanism.[3]

The power station will be Eskom's first supercritical plant and when completed will be "the biggest dry-cooled power station in the world".[1] The power station site was selected on the basis of its proximity to the Waterberg Coalfields and to an existing transmission system, the availability of land, acceptable coal prices and "the availability of alternative ash disposal options". Eskom bought the 883 hectare site from Kumba Coal, which is now known as Exxaro Coal.[1]

World Bank loan

On April 8, 2010 the World Bank voted to approve a $3.75 billion loan as requested by the South African government for the Medupi station. The United States abstained from voting on the measure.[4] It was the first World Bank loan to the country since the fall of Apartheid in the mid-1990s.[5]

World Bank Panel criticizes bank loan approval

In December 2011, an 18-month investigation by the World Bank Inspection Panel concluded that the bank insufficiently took health, water scarcity and pressures on local services into account when approving the loan, yet the decision did not violate World Bank climate change policies because the World Bank does not have explicit emission targets. The panel did say that it found the World Bank's steps to mitigate Medupi's estimated 25 million metric tons of greenhouse gas emissions lacking, and that the World Bank's statement that its partnership with South Africa will lower the country's emissions trajectory was "overly optimistic ... given that Medupi will emit significant levels of GHG emissions." The inspection panel was most critical when it came to water, finding that the expansion of the Grootegeluk coal mine to supply Medupi will result in significant water scarcity and pollution problems.[6]

Coal supply

The coal for the power station would be sourced from Exxaro Coal's Grootegeluk coal mine, which would increase production by 16 million tonnes a year to cater for the new power station.[7]

While Eskom have embarked on a major construction program, it has encountered difficulties with the Medupi power station. "Schedule forecasting has been sub-optimal on the project. In response to this, project management is engaged in intensive negotiations with MPS-JV, Alstom and Hitachi to improve the current forecast program to completion. Re-opening of negotiations for already placed contracts to ensure a 5% cost reduction," it states on its website.[8]

In December 2009 Eskom notified Exxaro that it wanted to change the terms of the coal supply contract "including the coal price escalation mechanism and the coal delivery ramp-up. Indications are that the date for first coal delivery to the power station, in terms of the CSA, has been confirmed to be during the first half of 2012, aligned to the commercial start-up of the power station." In response to this hiccup, Exxaro put the expansion of the Grootegeluk coal mine on hold.[9]

According to a 2011 Sierra Club report, Eskom’s own consultants estimate that 35 new coal mines will be required to support Medupi and Kusile.[10]

Costs

In 2007 the estimated cost of the station was R56 billion. By 2013 the final cost was an estimated R150 billion. According to Business Day, the price tag would "make Medupi the most expensive coal-fired power station on the planet (per unit of output)."[11]

Lobbying for Clean Development Mechanism funding

Eskom is seeking approval from the Kyoto Protocol's Clean Development Mechanism for funding for the project. "When you look at CDM, you look at the baseline of a country. South Africa is currently based on subcritical coal. This is supercritical. It is cleaner," said Mandy Rambharos, Eskom's climate change and sustainability manager.[12]

World Bank spokesman Roger Morier said that CDM funding for the project could be an option."The Medupi power plant will be the first in Africa to use cleaner super-critical technology, making it one of the most efficient large-scale power plants on the continent. World Bank financing for Medupi and the wind/solar components, however, only meets a small part of Eskom's overall financing needs," he said. "As Eskom looks for additional financing for its critical energy program, the CDM could be one of options it considers," he said.[12]

Lisa Friedman from ClimateWire reported that there are currently two doxen "new grid-connected fossil fuel power plants using a less GHG-intensive technology" being considered for CDM funding. One, the Mundra Ultra Mega Power Project in Gujarat, India, has already been approved and two others are close to the final decision stage.[12]

Project Decision making timetable

Significant developments in the construction of the power station have included:

  • 2005: Eskom proposed to build the power station
  • 2006: Department of Environmental Affairs and Tourism approved the project
  • May 2007: the Minister for Environmental Affairs and Tourism rejected appeals lodged against the decision and approved the project
  • August 2007: Ceremonial ground-breaking at the site
  • September 19, 2008: coal contract was concluded with Exxaro.[8]

Opposition

Local opposition and permit violations

Local farmers in the Limpopo province brought in an environmental expert to analyze impacts of the sand mining on the Limpopo River and to identify alternatives. The expert determined that the damage being done to the river was possibly irreversible, and that Eskom was sand mining without adequate permits from the Ministry of Mining.[13]

Environmentalists Oppose World Bank Loan to Eskom

World Bank & Coal Power in South Africa .

In late February 2010, climate change activists and concerned individuals from about the world expressed concern that the World Bank would fund new coal-fired power stations proposed by the South African government-owned utility, Eskom. One of the projects is the Medupi power station, a 4800 megawatt plant under construction in Lephalale in the country's northern region of Limpopo.

Groups opposing the project, which includes Climate Justice Now, groundWork and the Federation for a Sustainable Environment, vowed to pressure country directors within the World Bank to vote against the loan and also said they would revive the World Bank "bond boycott" that was launched last decade to end structural adjustment programs and anti-environmental project funded by the Bank.[14]

Inger Andersen, World Bank's director for sustainable development in Africa, said the loan would support the "responsible use of coal as an interim resource for power generation, given lack of viable alternatives". The opposition groups countered, that if granted, the loan would destroy the image the World Bank is portraying of a climate-friendly financier. In order to power the new coal plants, over 40 new mines would have to be opened up in the region. The proposed plants would also increase utility rates to consumers. Large environmental groups such as the Sierra Club have signed on to a petition that opposes the loan.[15]

On March 8, 2010 it was announced that the UK and US threatened to withhold support for a World Bank loan intended to help South Africa build the new coal-fired power station. The UK and US opposed to the loan because they believe it will make it harder for South Africa to deliver emission cuts.[16]

On April 8, 2010 the World Bank voted to approve a $3.75 billion loan as requested by the South African government. The United States abstained from voting on the measure.[17] It was the first World Bank loan to the country since the fall of Apartheid in the mid-1990s.

Critics, however, were not pleased with the World Bank's decision to fund the coal plant, even though the loan had provisions for other energy technologies like wind and solar. "I think it's pretty clear the World Bank is telling the people of South Africa that they're not taking their commitments to alleviating poverty and climate change seriously," said Mark Kresowik, corporate accountability and finance representative for the Sierra Club's 'Beyond Coal' campaign. Other countries that abstained from the vote included the U.K., Netherlands and Italy.[18]

Project Details

  • Sponsor: Eskom
  • Parent company:
  • Location: Lephalale, South Africa
  • Coordinates: -23.7049731, 27.563839 (exact)
  • Status: Construction
  • Gross Capacity:
    • Unit 1: 794.8 MW
    • Unit 2: 794.8 MW
    • Unit 3: 794.8 MW
    • Unit 4: 794.8 MW
    • Unit 5: 794.8 MW
    • Unit 6: 794.8 MW
  • Type: Supercritical
  • Projected in service: 2017
  • Coal Type: Bituminous
  • Coal Source: Grootegeluk coal mine
  • Source of financing: World Bank

Articles and Resources

Sources

  1. 1.0 1.1 1.2 Eskom, "Medupi Power Station", Eskom website, November 2007.
  2. Paul Burkhardt, "Eskom South Africa Power Plant Delayed to 2014 as Costs Rise," Bloomberg, July 8, 2013.
  3. Jocelyn Newmarch, "Eskom Seeks Medupi Carbon Credits", AllAfrica.com, April 28, 2010.
  4. "U.S. abstains on vote to proliferate coal in South Africa" Climate Progress, April 8, 2010.
  5. "South Africa wins $3.75 billion coal loan" Climate Wire, April 9, 2010.
  6. Lisa Friedman, "Auditors find World Bank skipped policy steps in approving huge South African coal plant" E&E, December 2, 2011.
  7. "Coal giant aspires to be 'zero carbon footprint' company", Business Report, June 6, 2008.
  8. 8.0 8.1 Eskom, "Status Report on Capacity Expansion Projects", Eskom website, accessed May 2010.
  9. Exxaro, "Medupi coal supply and off-take agreement update", Media Release, December 8, 2009.
  10. "Move Beyond Coal, Now!: Voices from the Front Lines of the Global Struggle" Sierra Club report, Sep. 2011.
  11. David Gleason, "Medupi farce may cost trillion-plus," Businss Day Live, July 10, 2013.
  12. 12.0 12.1 12.2 Lisa Friedman, "New South African Coal Plant Seeks Emission Credits for 'Cleaner' Coal", New York Times, June 2, 2010. (This story is originally from ClimateWire).
  13. "Move Beyond Coal, Now!: Voices from the Front Lines of the Global Struggle" Sierra Club report, Sep. 2011.
  14. "Eskom told to charge companies fair rates ", Business Report, February 23, 2010.
  15. "Eskom's R29 billion World Bank loan runs into opposition", Business Report, February 23, 2010.
  16. "World Bank split over controversial 'clean coal' investment" Cath Everett March 8, 2010.
  17. "U.S. abstains on vote to proliferate coal in South Africa" Climate Progress, April 8, 2010.
  18. "South Africa wins $3.75 billion coal loan" Climate Wire, April 9, 2010.

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