Diesel power plants to cost a heavy P29 billion

Brian Benza
Staff Writer | Tuesday June 22, 2010 00:00

 

Government has funded the construction of two diesel power stations - one in Orapa, the other at Matshelagabedi - which will together generate 160MW from a diesel consumption rate of 292,000 litres and 50, 000 litres respectively for a maximum of eight hours a day that the power picking plants will run for.

According to the World Bank, these power picking plants will cost Government US$4 billion (P29 billion), the equivalent of five percent of the country's Gross Domestic Product.

Responding to a question from a BIDPA official who wanted to know why the country was burning diesel instead of coal to plug power shortages authorities were first warned of in 1998, the Minister of Minerals, Energy and Water Resources, Ponatshego Kedikilwe, acknowledged the government's lack of sufficiently swift reaction to the matter but also blamed lack of resources for the delay in devising a plan to build own resources.

'At that time, it probably could have been cheaper to build our own resources,' he admitted. 'But I believe we were lulled by the Eskom tariffs which were extremely cheap. Complacency might not be the word to use but we might have acted more quickly than we did.'

In 1998, South Africa issued a white paper to Botswana and other countries it exports power to, warning them of looming power shortages. However, the government only began to act by building its own power station, Morupule B, six years later.

It currently costs an average of P3 per KW per hour to generate electricity from diesel while electricity from coal only costs about P0.50 per KW per hour.

The P29 billion that diesel power plants will cost is almost three times more than the P11 billion for Morupule B power station that will generate 600MW by the end of 2012. While admitting to government's lack of quick reaction, Kedikilwe also said at that time, priority was in other areas.

'Apart from the fact it was difficult to put resources together in the way we have done now with the help of the World Bank and private financial institutions, the government had other important priorities such as education and water provision,' he said.

His Permanent Secretary, Gabaake Gabaake, said while the projects will cost the government a lot of money, the country cannot do without electricity, which drives the economy.

He put it bluntly: 'It is better to have expensive power than no power at all. Imagine what would happen to the mines and other sectors of the economy if there was no power?' Regarding the accuracy of the cost of fuelling the power picking plants, Gabaake said while he could not dispute the World Bank's figures as diesel is very costly and it will be consumed in very large quantities, he doubts that the amount will rise to US$4 billion.

'These plants will only run when the deficit is very high, maybe for just a couple of hours a day,' he said. 'Hence, I do not believe we will spend that much.'