Govt floats tender to convert Orapa diesel plant
Staff Writer | Friday February 27, 2015 15:51
The dual fuel power station is currently running on diesel and the tender is part of plans to convert the plant to Coal Bed Methane (CBM). This is expected to reduce the cost of producing electricity at the power station by up to 60 percent. In a tender notice published in the Daily News on Wednesday, government said invitation was for the purposes of gauging the preparedness of local companies to supply gas on a trail basis.
Last year, the Ministry of Minerals Energy and Water Resources (MMEWR) flighted a similar invitation, but it was only limited to companies that already own CBM exploration rights in Botswana.
Currently, only two companies Tlou Energy and KES have made considerable progress in exploring for CBM in Botswana’s eastern coalfields. “This is an opportunity for the private sector to play a role in the provision of gas, which has a low carbon foot print and it is cheaper than diesel,” said MMEWR minister, Kitso Mokaila in a committee of supply statement distributed to parliamentarians last week.
It is estimated that the two turbines of the power plant consumes up to 17,000 litres of diesel per hour at peak use. Conversion of the power plant to CBM is estimated to the costs of producing electricity from 24 cents (P2.28) per kilowatts to about 10 cents (90 thebe) per kilowatt.
Mining of CBM is, however, still unregulated in Botswana and government plans to review the Mines and Minerals Act to cater for gas mining. The Bill will be tabled in Parliament by July 2015.
The power station has helped ease power shortages by removing Debswana Mines, which consume 85 MW, from the national grid while also providing an extra 5 MW for consumption by other users. Due to the consistent breakdown of the Morupule power station, Botswana Power Corporation (BPC) has heavily relied on Orapa and the 70 MW Matshelagabedi plant to ease power shortages.
Government will inject a further P1.5 billion tariff subsidy into BPC’S coffers after March 31, 2014. For the 2014 financial year, government pumped P1.49 billion as a tariff subsidy into the Corporation enabling it to post a profit for the year of P114 million, being the first such since 2008. In 2013, the sole shareholder had ploughed in P871 million, up from P508 million and P454 million in the preceding years.
In addition, government paid P450 million during the 2014 financial year as premium for the costs the BPC met in securing emergency power. This amount was down from P502.6 million in the previous year, as the higher generation at Morupule B limited the need to plug gaps.