The much anticipated blue print that will give Mmamabula and other Independent Power Producers the green light has come as a disappointment to CIC Energy as it may delay the project further.
South Africa’s Department of Energy last week released the executive summary of the draft integrated resources plan (IRP2010) for public comment.
“CIC Energy is disappointed by the first draft of the IRP2010 as it is not a realistic solution to the electricity crisis in South Africa,” Erica Belling, the company spokesperson said.
Mmamabula is an export oriented project that was to fill South Africa’s power shortfall, but the publication of the draft means Africa’s largest economy may require CIC electricity at a later time.
The realisation of the project is dependent on Eskom or South Africa signing the Power Purchase Agreement (PPA) that will allow CIC to link its grid to the South African one.
The other power off-taker for the project is Botswana Power Corporation (BPC), but its signature is dependant on Eskom signing first.
The draft IRP2010 has revealed a gloomy picture of the power situation in South Africa from next year until 2016 as the country will experience continuous power black outs.
In turn, Botswana, which relies heavily on imported electricity from Eskom, will suffer.
South Africa is concerned about the delays in commissioning of Medupi and Kusile power stations.
Mmamabula had positioned itself to fill this gap as it is the most advanced large IPP project under development and well positioned to be able to supply substantial quantities of electricity to South Africa in the shortest possible time frame.
The IRP2010 draft affects the timetable and puts the project in further jeopardy although some international companies have become interested in the Botswana Stock Exchange (BSE) listed company.
“While CIC Energy’s Mmamabula Energy Project is catered for in the draft IRP2010, the timeframe for the start of commercial operations is well beyond what CIC Energy has been planning for,” Belling added.
However, the company is still hopeful that the final paper to be concluded before Christmas will be positive.
Mmamabula, comprising 2 x 600 MW (combined 1200 MW) units, was expected to start supplying the Eskom grid by 2013, but it appears the draft by South Africans may take that to a period after 2015, according to estimates.
“We hope that the final IRP2010 that is expected to be promulgated in November or December is modified to become a more realistic plan for South Africa, with a sooner start-up date for the Mmamabula Energy Project,” Belling said.
Belling said it was too early to say what the implications the draft will have on the project itself are.
“However, the draft IRP 2010 highlights the importance of the other projects, both to CIC Energy and to Botswana in terms of developing the Mmamabula coal field and helping to provide energy security to the country.”
CIC Energy plans to participate in giving feedback on this draft.
