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South Africa: cogeneration opportunities

In a country ranked among the top energy-intensive economies in the world, South Africa is going all out to find strategies to tackle its ever-increasing power demands.
With national power producer Eskom reportedly set to face severe supply-demand challenges within the next three years, electricity cogeneration is emerging as a possible means of reducing industrial electricity demand.

National Energy Regulator of South Africa (Nersa) senior engineer Ferdi Kruger says that co-generation is an important field for the regulator, providing an opportunity to harness energy that is currently being lost. “There is a substantial market for energy that is currently being wasted, either through industrial processes or flared waste gas,” he says.

In addition, cogeneration can reduce pollution by using waste to produce electricity.

Considering that local industry consumes as much as 47% of the total energy consumed in the country, electricity cogeneration, through heat and gas, is one way for industrial entities to reduce their dependence on national power, while limiting greenhouse-gas emissions.

Cogeneration - the simultaneous generation of heat and power - has been used in energy-intensive industries that have large concur-rent heat and power demands.

Kruger comments that cogeneration plants can be established from almost any heat- or gas-producing process.

“We are currently in the process of drawing up guidelines to assess cogeneration projects in the hope of identifying and financially assisting the better ones,” comments Kruger.

He says that three models for cogeneration have been entertained so far.

The first is where cogeneration is a purely internal matter and electricity is produced for the entity's own use. The second is where the individual client generates power that is not its core business and sells the power station to a private concern, which generates power for the client's use. This involves the establishment of a power-purchase agreement between the two entities. Finally, individual concerns may sell gas to independent concerns, which may, in turn, establish power stations and sell the energy to Eskom.

Kruger says that the guidelines currently being developed are aimed at both retrofitting existing industrial plants as well as greenfield projects that could be developed to include cogeneration infrastructure. Guidelines for cogeneration projects are likely to be finalised by the end of the year.

Although the lack of consistent guidelines has brought about a reluctance to critically evaluate cogeneration projects, Kruger encourages industrial customers to prepare their presentations for approval in 2007.

He estimates that cogeneration activities in South Africa could realistically generate a preliminary figure of about 1 000 MW, some 2,5% of the country's demand.

Kruger points out, however, that the cogeneration catch lies in its price tag.

Additional information: More at Engineering News
News date: 04/09/2006

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