Saudi electricity group ACWA Power, which is leading the private consortium selected to build a 306 MW coal-fired power station in Mpumalanga, has confirmed that the project will be the first in South Arica to incorporate circulating fluidised-bed (CFB) technology.

The Khanyisa project and the 557 MW Thabametsi project, in Limpopo, have been selected as preferred bidders following the first bid window of South Africa’s Coal Baseload Independent Power Producer (IPP) Procurement Programme.

Besides ACWA Power, the Khanyisa consortium includes Thebe Investments, Pele Natural Energy, Mazi Capital and the Palace Group, raising the black-empowerment equity participation in the project to 37%. Overall South African ownership stands at 51%, as stipulated in the bidding criteria, with development finance having also been secured from the Industrial Development Corporation and the Development Bank of Southern Africa.

The power station will use discard coal from nearby Anglo American collieries, which ACWA Power claims will reduce the environmental impact of waste coal in the region and eliminate the need to open new coal seams.

President and CEO Paddy Padmanathan also stresses that the plant will comply with South Africa’s “strict” environmental standards and will be built and operated in line with the Equator Principles and World Bank standards.

“Utilising innovative CFB technology, even with this discard coal of low-heat content, the sulphur oxide and nitrogen oxide emissions will be lower than those of coal-fired power stations currently operating in South Africa.”

The dry-cooled station has also been designed as a zero liquid-effluent-discharge plant; while the water to be used in the station will be reclaimed from underground mine operations in the region.

Despite being “technically complex”, the tariff bid by the consortium is still well below the stipulated qualification first year price of 82c/kWh.

Padmanathan argues that the award also “clearly reasserts” government’s stated policy of adding competitive generation capacity through an IPP model that relies on the private sector to finance, develop and operate power plants in South Africa.

He notes that ACWA Power has already participated in the Department of Energy’s renewable-energy competitive bidding programme, where it prevailed with the Bokpoort concentrated solar power (CSP) and the Redstone CSP project. Bokpoort is operational, but power utility Eskom has held back from signing the power purchase agreement for the Redstone project. However, Padmanathan is confident construction will “commence soon”.

“The Khanyisa award demonstrates ACWA Power’s commitment to the South African IPP market and our ambition to create a strong, self-sustaining multi-fuel portfolio,” Padmanathan said.

Some 3 000 jobs are expected to be created during the construction phase and once the plant enters into commercial operation in December 2020, the station will employ 150 people.

The plant will be operated and maintained by a partnership between Palace Group and NOMAC, a wholly-owned subsidiary of ACWA Power.