Coega power deal breathes new life into Alcan deal

INDEPENDENT ELECTRICITY producer, the IPSA Group, has signed a preliminary agreement with the Central Energy Fund (CEF) in what is believed to be the country’s first public-private partnership for an electricity generation project. It will be situated in the Coega Industrial Development Zone. Peter Earl, CEO of IPSA, said SA’s first integrated LNG to power project was an important diversification away from the dependence on the coal reserves. The agreement will see IPSA working closely together with PetroSA and iGas for an integrated liquefied natural gas (LNG) to electricity project at the IDZ. In late 2008, IPSA will install the first 520MW of generating capacity. Another agreement will be made to install another 520MW turbine before 2010. “We intend to produce electricity locally in Port Elizabeth to permit the development of the strategic metals processing businesses at Coega which will add considerable value to the raw materials currently being exported from South Africa in their basic state,” says Earl. He added that they aimed to install turbines as fast as possible for uninterrupted electricity supply in the Eastern Cape. The agreement will also pave the way for the 1600MW combined-cycle gas turbine generating facility at Coega – sufficient to meet the needs of the Alcan aluminum plant. The company claims that the Coega combined cycle plant will be the most environmentally-friendly large scale generating unit in the country and, furthermore, eligible for CER carbon credits under the Kyoto Protocol. IPSA and the CEF will look at other possibilities of further power projects expansion in SA, he says.