Kelvin Power

THE PRIVATE ENTITY PROVIDING MUCH-NEED GRID STABILITY

​KELVIN POWER

KEEPING JOBURG

Switched On Kelvin Power represents much-needed grid stability for South Africa’s largest city, operating as the only large privately-owned coal power plant in the country Writer: Tom Wadlow | Project Manager: Lewis Bush

J

ohannesburg, despite its relatively young age, is Africa’s most prosperous and developed metropolis.

In 1886, then President Paul Kruger declared what is now known as George Harrison Park as open for digging, signalling the start of the Witwatersrand Gold Rush and precursor to the construction of an entire city that started out in the form of a tent-based mining camp.

2 | Africa Outlook issue 78

The Witwatersrand Basin is the largest known gold deposit in the world, its riches helping to fast-track Johannesburg’s development into South Africa’s largest city and economic beating heart.

Such heavy mining and industrial endeavours, not surprisingly, consumed enormous amounts of energy, much of it being provided by nearby coal mines and power stations.

ENERGY & UTILITIES

Africa Outlook issue 78 | 3

​KELVIN POWER

Sebenzana Sebenzana and its current clients are greatly encouraged by the early fruits of better investment, operations, and maintenance decisions on critical assets underpinned by Sebenzana’s Smart Asset Management Platform (SAMP).

Two years ago Sebenzana set out with the audacious task of bringing traditionally “offline” data, information and expert insights into relevant augmented data sets for use with “online” process data to enhance predictive asset analytics.

Sebenzana’s offering to the energy and industrial sectors is to leverage our traditional consulting expertise and expert network with our evolving Smart SAMP Platform to get better, value adding, decisions made and implemented on clients’ critical physical assets.

With our existing clients we have witnessed significant business value creation and savings where we have honed in on critical assets to get them “producing” better.

However, over the past 30 years the regional economy has gradually transitioned away from its historical dependence on energy-intensive mining and manufacturing sectors towards a more diverse, increasingly services-related range of activities.

Today, more than 600 companies are listed on the Johannesburg Stock Exchange, while almost all SA financial services firms and many of the large mining houses still base their headquarters in the city.

But while heavy industry is no longer the consumer of energy it once was, 4 | Africa Outlook issue 78

modern-day Joburg still requires huge amounts of electricity to function on a daily basis – coal dominates the picture both here and in South Africa as a whole, accounting for 59 percent of the country’s energy supply.

In Johannesburg, the major power station is under increasing pressure to provide the power needed for the city to continue growing.

“The shortage of supply is hampering economic development,” comments Paul Collier, General Manager at Kelvin Power.

“The energy supply of the country is constrained with the planned additional capacity struggling to meet the demand. Further, the deferral of maintenance to try and compensate for the shortage of supply is proving to be costly and plants are out for longer with intermittent maintenance.

“The Department of Minerals Resources and Energy needs to provide policy certainty to address the diversification of the energy

mix to address the climate change challenges. Eskom is currently heavily reliant on coal generation plants and with the increasing costs of coal, the electricity tariff is becoming unaffordable to a majority of residents and it is unattractive to investors.”

STABILISING SUPPLY Enter Kelvin Power. The largest privately-owned coal-fired plant in the whole of South Africa, its facility currently provides enough electricity to fulfil up to 12 percent of Johannesburg’s energy demands and introduces much-needed competition to what is a highly monopolised industry.

“It is very important that the government brings in new industry players on a significant scale to help build new power stations,” Collier continues.

“This will create competition amongst the players with different technologies, which in turn will help bring the cost of electricity down.

ENERGY & UTILITIES

Office: +27 11 447 8843 Email: enquiries@sebenzana.com Woodmead Office Park, 26 Stirrup Lane, Woodmead, 2191, South Africa www.sebenzana.com

Sebenzana has transitioned to an engineering technology service provider that serves the owner-operators of critical high-value assets. Based on our years as a leading independent engineering advisory services firm we have established a Smart Asset Management Platform which leverages our plant specialists and operations and maintenance engineering experts to create business value through better investment, operations, maintenance and production decisions on critical assets. We assist with the management of physical assets across a wide range of industries including power, manufacturing, petrochemical, oil and gas, and heavy engineering.

Sebenzana’s SAMP enables owner-operators of critical, high-value assets to integrate deep engineering expertise with insights from analytics using a broad base of relevant data sets to inform investment, operations and maintenance and production decisions to maximise the business value created by these assets.

Outlook Creative Services

Outlook Publishing’s awardwinning in-house team is now utilising its extensive production skills to offer a full and bespoke range of editorial, design and marketing services via its new Outlook Creative Services division.

Is the supplier and distributor of water treatment chemicals, activated carbon, ion exchange resin, reverse osmosis membranes, plant & equipment to municipal water purification, mining, Breweries, industrial water purification and various other applications.

F O R M O R E I N F O R M AT I O N V I S I T: www.outlookpublishing.com/creative-services

www.negchem.co.za

Africa Outlook issue 78 | 5

​KELVIN POWER

OFF-GRID Of South Africa’s installed capacity of 51,309 MW, renewables account for just 4,533 MW, well under 10 percent.

There is thus a huge opportunity to diversify the country’s supply, and with that comes the possibility of exploiting off-grid solutions.

Collier comments: “Battery storage is one of the many options Kelvin will be considering during the technical studies to be conducted in the near future. This will be with a view to assist the city with peak demand electricity, as the power is located closer to the city’s network infrastructure.

“Disruptive technology such as off grid renewable technologies, including storage, will be a defining trend in 2020. They have the advantage of being commissioned quickly and can be decentralised from the main grid.

The input cost for electricity generation is minimal, except for the capital required to put up the plant.”

6 | Africa Outlook issue 78

“It will also attract much needed investment into the country and thereby create opportunities of employment for local communities.

This will help enable the government to deploy resources in other sectors of the economy where it is needed the most, such as education and healthcare.”

Kelvin Power, which is majority owned by Anergi, is situated in Ekurhuleni, Kempton Park. The power generated from the plant is supplied to City Power Johannesburg (SOC) under a Power Purchase Agreement, commonly known as a PPA. The site is made up of two stations (Kelvin A and Kelvin B) although at present only the latter is operating, producing energy at an average output of 200 MW, enough to provide stability to Johannesburg’s grid. In terms of headcount, around 290 permanent staff are employed, a figure which Collier expects to remain constant for the foreseeable future.

Kelvin also relies on a range of partners in its day-to-day operations, ranging from coal suppliers to technical contractors who have the necessary skills to work on an older plant.

Collier himself arrived at the company having gained experience in other African nations, initially starting out in the UK.

ENERGY & UTILITIES

“It happened more by chance,” Collier recalls when asked how he began in the energy industry. “I was on medical leave from the army when I saw an advert in the paper for positions at two power stations operated

by National Power.

“My father worked in power stations all his life, so I was familiar with the processes. I applied and after a lengthy evaluation process, I was offered a position in operations at Drax Power Station near Selby, in north Yorkshire.

“During the training the plant was acquired by AES, an American power company. At the time they had over a hundred businesses in about 40 different countries. They did things a bit differently to what we were used to in the UK, with a lot of opportunities to travel and grow in experience.

“I went to Cameroon on a seven-week assignment that ended up lasting two and a half years. Since then I have worked back in the UK for a few years, but predominantly my time has been spent in Africa. I have been in Ghana and Kenya, but a majority of the time has been here in SA.”

FUELLING THE FUTURE ENERGY MIX The priority for the GM now is very much to lead Kelvin Power into a new-generation future, one which

could be defined by a conversion into a gas-fired station.

In August 2018, it initiated a $1.3 million feasibility study led by South African natural gas company NOVO Energy, the assessment being funded

by US Trade and Development Agency (USTDA) grant and looking into the possibility of converting the plant into a 450-600 MW operation.

The results of the study are expected by the end of 2019, with Kelvin Power also in the process of commissioning a development company to look into all other options regarding the future of the site.

But Collier remains hopeful of the prospects to convert to gas and bring some highly anticipated diversification into Johannesburg’s power supply.

He adds: “The study mainly concentrates of the infrastructure and the logistics required to bring gas to the Kelvin site from either export or local markets. It is focused on the security of supply and pricing point to ensure an affordable and competitive electricity tariff.”

Developing Kelvin into a gas distribution hub for the Gauteng region, South Africa’s industrial heartland, is also being assessed, a move which could pave the way for it to become even more strategically important in the years to come.

For now, however, Collier’s immediate priorities rest with maximising the coal-fired operation already in place, the GM’s concluding remarks reflecting both this and the excitement that lies ahead.

“My priority for 2020 is to ensure a mutually beneficial relationship with our key customer by meeting and exceeding an agreed objective of ensuring the citizens of Johannesburg have a sustainable security of supply of electricity, now, and in the future,” he says. “Embedded in the relationship is the consistent and cost-effective electricity tariff.

“Beyond this, I am optimistic about the future of Kelvin Power and will strive to maintain the partnership with the City of Johannesburg in our quest to transform the regional energy picture.

“The Kelvin site and the infrastructure around it are key to the development of a new power generation plant.”

​ ELVIN POWER K Tel: +27 (0) 11 573 2500 info@kelvinpower.com www.kelvinpower.com

Africa Outlook issue 78 | 7

​KELVIN POWER Kelvin Power, 3 Zuurfontein Road, Spartan, Kempton Park Tel: +27 (0) 11 573 2500 info@kelvinpower.com www.kelvinpower.com

PRODUCED BY AFRICA OUTLOOK MAGAZINE