Kusile Power Station

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Kusile Power Station
Kusile Power Station - 002.jpg
Kusile construction seen from the N4
CountrySouth Africa
LocationWitbank
Coordinates25°54′59″S 28°55′02″E / 25.91639°S 28.91722°E / -25.91639; 28.91722Coordinates: 25°54′59″S 28°55′02″E / 25.91639°S 28.91722°E / -25.91639; 28.91722
StatusUnder construction
Owner(s)Eskom
Thermal power station
Primary fuelCoal
Power generation
Units operational1 × 800 MW
Nameplate capacity4,800 MW
External links
CommonsRelated media on Commons

Kusile Power Station (formerly known as the Bravo Power Station) in South Africa is a coal-fired power plant under construction by state electricity utility Eskom, about 15 kilometres north of the existing Kendal Power Station near Witbank, Mpumalanga. Both Kusile and its contemporary counterpart Medupi are notable for their size as well as controversial cost and suspected corruption in their construction.[1]

It is expected that Kusile would consist of six 800 megawatt coal-fired generating units for a total generating capacity of 4,800 megawatts.[2]

Coal supply[edit]

In the minutes of a stakeholder briefing, Eskom stated that it "will obtain most of the coal required for Kusile Power Station from Anglo Coal's New Largo operations, south east of the Kusile Power Station."[3]

Eskom’s consultants estimate that 35 new coal mines will be required to support the Medupi and Kusile plants.[4]

Timeline[edit]

  • Department of Environmental Affairs & Tourism issued a positive Record of Decision on 5 June 2007.[5]
  • February 2008: Hitachi Power Africa has been awarded the boiler contract worth R18.5 billion and Alstom S&E has been awarded the turbine island works contract valued at R13 billion."[6]
  • 14 April 2011: Black & Veatch Corp. won preliminary approval for $805.6 million in financing from the U.S. Export-Import Bank for the Kusile plant.[7][8]
  • 31 May 2011: Eskom announced that the Export-Import Bank of the United States (Ex-Im Bank) had given its initial approval for an $805 million (R5.78 billion) loan to help Eskom build the plant.
  • 10 August 2018: A fire breaks out at the station amidst tensions with unions over pay increases causing significant damage.[9]

Delays[edit]

Initially expected to take 6 years to complete, the project was not expected to complete Unit 1 until 2017 (approximately 8 years after initial works began) and the entire project not until 2021. [10] According to a press release by Eskom, a Project Execution Team, led by Frans Sithole, was able to bring Unit 1 online, under full load, on 10 March 2017.[11] In December 2018 Public Enterprises Minister Pravin Gordhan announced that government was initiating a forensic probe into the repeated delays and cost overruns on the completion of Kusile and Medupi Power Stations.[12]

Corruption[edit]

I Hitachi Power Africa, a subsidiary of Hitachi, Ltd., was found by the U.S. Securities and Exchange Commission to have made US$6 million in corrupt payments to a front company for the African National Congress, the ruling political party in South Africa. [13] Hitachi agreed to pay the SEC US$19 million to settle the charges. [13] Hitachi Power Africa is conducting its works at Kusile now under the name Mitsubishi Hitachi Power Systems Africa after a reorganization in February 2014 combining Hitachi, Ltd.'s and Mitsubishi Heavy Industry's interests in the region.

Finances[edit]

Kusile Power Station is estimated to cost R118 billion to complete. [10]

Financial Institution Support[edit]

The following institutions are involved in supporting the Kusile Power Station:[14]

Multilateral development banks

  • African Development Bank - $500 million corporate loan, November 2008

Banks

  • Bank of America - advisory service, October 2010
  • Bank of Tokyo Misubishi UFJ - 705 million euro syndicated loan, December 2009
  • Barclays - advisory service, October 2010
  • BNP Paribas - corporate loan as part of 1,185 million euro syndicated loan
  • Credit Agricole - corporate loan as part of 1,185 million euro syndicated loan
  • Credit Mutuel-CIC - corporate loan as part of 1,185 million euro syndicated loan
  • Credit Suisse Group - helping with the sale of a stake
  • Deutsche Bank - 705 million euro syndicated loan, December 2009
  • FirstRand Bank Ltd - 705 million euro syndicated loan, December 2009
  • HSBC Group - 705 million euro syndicated loan, December 2009
  • JPMorgan Chase - advisory services
  • KfW IPEX-Bank - 705 million euro syndicated loan, December 2009
  • Natixis - corporate loan as part of 1,185 million euro syndicated loan
  • Nedbank Group - 705 million euro syndicated loan, December 2009
  • Rand Merchand Bank - 705 million euro syndicated loan, December 2009
  • Societe Generale - corporate loan as part of 1,185 million euro syndicated loan
  • Standard Bank - 705 million euro syndicated loan, December 2009

Export Credit Agencies

  • COFACE - corporate loan as part of 1,185 million euro syndicated loan
  • Euler Hermes Kreditversicherungs-AG (Hermes) - 705 million euro syndicated loan, December 2009
  • Export-Import Bank of the United States (Ex-Im Bank) - $805 million, April 2011

Investment Funds

  • Public Investment Corporation (PIC) - R 9 billion (US $1.2), May 2010

Environmental impacts[edit]

The plant is expected to emit an estimated 36.8 million tonnes of CO2-equivalent per year once it is completed.[15]

A 2011 report "The True Cost of Coal: The monstrous price of South Africa's coal addiction" by Greenpeace Africa and the University of Pretoria’s Business Enterprises unit calculated the full costs of the Kusile plant, from climate change to water use, and the impact on health and the environment. It was estimated that the damage caused by Kusile will cost South Africa between R31.2 billion and R60.6 billion a year, and that just 30% of Kusile’s externality cost would be able to generate five times the coal station’s proposed power with renewable energy. Roughly 70% of the total cost was water-related.

Opposition[edit]

In November 2011, Greenpeace activists chained themselves to a gate and some climbed a crane to protest the Kusile power station and South Africa's dependence on coal, a few weeks before the country will host a global conference on climate change. Authorities arrested nine people, who were ordered to return to court Nov. 21 on charges of trespassing and malicious damage to property.[16]

See also[edit]

References[edit]

  1. ^ "Eskom and the multi-billion rand mega projects that could have saved SA". Fin24. 2019-02-13. Retrieved 2019-02-13.
  2. ^ Terence Creamer, "Eskom begins standing its ground, but regaining credibility will be tough", Engineering News, June 6, 2008.
  3. ^ Eskom Holdings Ltd, "Second Key Stakeholder Meeting between Eskom and Topigs SA", August 19, 2009.
  4. ^ "Move Beyond Coal, Now!: Voices from the Front Lines of the Global Struggle" Sierra Club report, Sep. 2011.
  5. ^ Eskom, New Build News", November 2007.
  6. ^ "Eskom Announces Major Contracts for Bravo Project", Media Release, February 29, 2008.
  7. ^ "South African Coal Plant Wins U.S. Backing Over Environmentalist Protests" Mark Drajem, Bloomberg, April 14, 2011.
  8. ^ "Ex-Im Bank Gives Preliminary Approval For $800M Loan To South Africa Power Plant" Wall Street Journal, April 14, 2011.
  9. ^ "Eskom investigating cause of fire at Kusile power station". www.timeslive.co.za. Retrieved 2019-01-01.
  10. ^ a b "Worker killed at Kusile Power Station". SABC. 2015-09-15.
  11. ^ "Kusile unit 1 goes on full load". www.eskom.co.za. Retrieved 2018-04-09.
  12. ^ Khumalo, Sibongile (2018-12-06). "Eskom opens forensic probe into Medupi, Kusile". Fin24. Retrieved 2019-01-01.
  13. ^ a b "DA Laying Charges Over Hitachi Payment to ANC 'Front' for Medupi, Kusile Contracts". Times Live. 2015-09-29.
  14. ^ "Kusile Coal Power Plant, Bank Role," BankTrack, accessed April 22, 2011
  15. ^ Andreas Spath, "US To Finance Dirty Coal Power In South Africa" Care 2 Care, May 30, 2011.
  16. ^ "Greenpeace protests South African coal-fired power station; police arrest 9" Washington Post, November 6, 2011.