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31 Oct 2013 April 2014 10 June 2015 July 2015 29 March 2017
20 Nov 2013 April 2014 Sept 2015 March 2016 5 September 2017
GW cannot appeal decision of MDARLEA since no appeal available. 180 days in which to review lapses
EA for 450MW plant granted to Anglo
Application for a PAEL for a 450MW plant submitted by Anglo
Amendment of the EA from 450MW to 600MW granted
PAEL granted by MDARDLEA to Anglo
20 day period within which to appeal EA decision lapses
180 day period from date of EA decision in which to review lapses
GW files notice of intention to Appeal EA decision 3 years 4 months after decision made and 21 months after becoming aware of EA decision
GW becomes aware of EA decision
GW launches review of EA decision
ACWA Power Khanyisa
Thermal Power Station (RF)
(Pty) LtdGENERATION LICENCE PUBLIC HEARING27 March 2018
B
Contents
01
02
Table of Contents
Project Overview
― Key Project Details
― Site Location and Key Interfaces
― Basic Description of Plant Operations
― Examples of regulatory consents
Project Structure and Key Stakeholders
― Project Structure
― Key Stakeholders
Key Developmental Impacts
Legislative and jurisdictional overview
Objection and Responses
Conclusion
www.acwapower.com
Project Overview
03
04
Key Item Description
Energy planning mandate
IRP / Ministerial Determination / Department of Energy Coal Baseload IPP Programme
Scope Develop, Build, Own, Operate and Decommission (BOOD)
Plant Capacity 306 MW (net) (2x153 MW (net) Units)
Technology Circulating Fluidized Bed (CFB) boilers
Dry Cooled condenser
Proven technology
Emissions
Standards
Plant is designed to meet strict IFC/World Bank emission guidelines for a degraded air-shed
area.
Grid
Connection
The facility will be connected by 400 kV transmission line to the existing Eskom Transmission
Network located 2.5km from the Project site
Fuel Source Discard coal beneficiated and supplied from dumps within 4-8 KM from the site – allowing the
productive economic use of very poor quality coal.
30 year fuel supply agreement providing fuel price certainty over the term
Water Source Dirty water (mine waste), reclaimed and treated at the EWRP – 5km away.
30 year water supply agreement providing water price certainty
Construction Period
37 Months Unit 1, 41 Months for the Plant from notice to proceed to the EPC contractor
Offtake 30 year PPA with ESKOM for 100% of the capacity and energy.
ImplementationAgreement
Covers Economic development obligations to Government of South Africa (DOE) for entire construction, commissioning and operations
Key Project Details
Project Overview
05
• The site is located 10 km south of eMalahleni within the SACE (South African Coal Estates) on previously undeveloped land owned by Anglo American.
• 4-8 Km from the fuel source• 5 km from the eMalahleni
Water Treatment Plant –water source
• 3 km from ash disposal site -previously an open cast mine.
• 2.5 Km from the 400 KV grid connection point
Project Overview
Site Location and Key Interfaces
Proposed
06Project Overview
Basic Description of Plant Operations- CFB Boiler
Principle
Heating solid fuels in a fluidized bed
through contact with a gas or liquid
In situ injection of absorbent
(limestone) in the boiler to reduce SOx
emissions
Advantages
Highest fuel flexibility (allows the plant
to use discard coal, which ordinarily
would have not been beneficiated)
Admits fuel fluctuations and other
disturbances
Good solid mixing
Lower temperature – lower NOx
emissions
www.acwapower.com
All Key Equipment (Boiler, Turbine, emission control systems etc.) to meet stringent proven technology requirements of the RFP, Sponsors and Lenders
07Project Overview
Examples of Key Environmental and Regulatory consents
www.acwapower.com
Item Authorisation
1. Provisional Atmospheric Emission Licence (17/4/AEL/MP312/14/20) in terms of the National Environmental Management: Air Quality Act
2. Integrated Water Use Licence issued in terms of the National Water Act
3. Environmental Authorisation for the Khanyisa Project issued in terms of the Environmental Impact Assessment Regulations published in terms of the National Environmental Management Act
4. Overhead Line Environmental Authorisation
5. Khanyisa Water Pipeline Environmental Authorisation
6. Rezoning approval (Amendment scheme 2023)
7. Civil Aviation Approval
The Plant will be constructed and operated in accordance with applicable regulatory approvals and
management systems
Project Structure and Key Stakeholders
08
09Project Structure and Key Stakeholders
Project Structure
Anglo Operations Limited
Various FuelCoAnglo
Operations Limited
EPC Contractor (General Electric)
Khanyisa O&M Company(NOMAC + PALACE GROUP)
Limestone supply agreement
Implementation Agreement
Power Purchase, Connection, Self-Build, Ancillary Services Agreements
Coal Supply Agreement
Water Supply Agreement
Wrapped EPC Contract
Wrapped O&M Contract
40%
International Company for Water and
Power Projects (ACWA Power)
ACWA Power Khanyisa Thermal Power Station (RF)
(Pty) Ltd
Landlease agreement
Lenders
Equity
Anglo Operations
Limited
Debt
Foreign Shareholder
Local Shareholders
Thebe Investment Corporation (Pty) Ltd
Palace Consulting Engineers (Pty) Ltd
Pele Energy Group (Pty) Ltd
Hulisani Limited
www.acwapower.com
60%
Eskom
Department of Energy “DoE”
10
Lead Developer and Sponsor – ACWA Power
ACWA Power is a developer, investor, co-owner and operator of a portfolio of power generation and
desalinated water production plants;
Long Term Investor consistently delivering power and water reliably and at the lowest possible cost
Established pipeline greater than $4 billion in SA across renewables and thermal power projects with
circa. $700 million of own investment committed;
Lead developer, investor and operator of the 50 MW Bokpoort CSP Project, with 9,3 hours of storage
and 100MW Redstone CSP Project with up to 12 hours storage;
www.acwapower.com
Project Structure and Key Stakeholders
11
Development Partners/Shareholders
Established in 1992, one of the leading black-owned investment companies
with an asset portfolio of over R6 billion spanning investments in tourism,
mining, renewable energy, infrastructure, telecoms, financial services and
healthcare
Thebe’s business focuses on three work streams namely, integrated energy
and resources, business that constitutes the service industry and the third
being a focus on community development and transformation.
www.acwapower.com
A 100% black youth owned IPP that develops, owns and operates a
diversified power portfolio comprising of wind, solar, gas and coal;
Part of the larger Pele Energy Group that owns and operates 1,200MW of
power projects in operations and/or advanced development;
The group offers asset management, O&M, construction management and
social and enterprise development and advisory services.
A JSE listed investment company with a pipeline of sustainable energy
projects across coal, solar, wind and hydro plants;
Majority black owned company owned company with investment stakes in
GRI (Global wind tower producer), Redcap Energy (80MW), and Rustmo PV
Solar Farm (7MW).
A 100% black owned multi-disciplinary service in EPC and O&M in the power
(generation, transmission, distribution, DSM, metering), water and sanitation,
housing and municipal infrastructure sectors
All Partners will be integrally and actively involved in the implementation of the
Project in different roles
Project Structure and Key Stakeholders
12
EPC Contractor
The Engineering, Procurement and Construction (EPC) will be undertaken under a date certain, fixed price
lump sum turnkey EPC Contract with General Electric (GE) that ensures that the consumer is not exposed to
construction risks.
www.acwapower.com
Global EPC experience including power plant concept, design, manufacturing and
construction;
As EPC, nearly 580 GW in steam turbine generator sets and 835 GW of boilers
worldwide with experience with CFB plants up to 660 MW in plant size;
Committed to RSA since 1898 with 923 local employees
R660 million investment in GE Africa Innovation and Training Centre;
R200 million committed to local supplier development.
In the South African power sector:
Equipment in 74% of the installed base with maintenance support
9.6 GW under execution (Medupi and Kusile) with R 19 billion of local procurement, 1,248 jobs created and R 121 million spent on CSI programmes (bursary, schools etc)
In the South African transportation sector:
233 locomotives to be supplied with > 55% local content and 21 local suppliers;
R 1.2 billion committed spend with Transnet
11 locomotives exported from SA already
In the South African healthcare sector:
6,000 clinical devices in public and private hospitals
Mother and child social entrepreneurs programme
US$ 1 m donated to Nelson Mandela Children’s Trust
The Project has engaged with a extremely experienced, credible and
committed EPC Contractor to ensure successful implementation
Project Structure and Key Stakeholders
13
O&M Contractor The Operations and Maintenance (O&M) of the Project will be undertaken by an O&M Contractor under a
30 year, “turnkey” O&M Contract that ensures that the consumer does not bear O&M cost risks;
The O&M Contractor is a consortium comprising NOMAC (an ACWA Power subsidiary) and Palace.
www.acwapower.com
Wholly owned subsidiary of ACWA Power established in 2005
Provides O&M services for a multi-technology, multi-fuel portfolio of c. 17 GW
and 2.5 m3/day of desalinated water
Integrated HSE and quality management system have been independently
certified under the ISO 9001:2008, ISO 14001:2004, and OHSAS 18001:2007
standards
Established OEM supplier base
Is the O&M contractor on ACWA Power’s South African Bokpoort CSP Project
The Project has engaged with a competent O&M Contractor with knowledge of
the local environment and secured a “turnkey” O&M solution over the term of the
PPA
Project Structure and Key Stakeholders
Key Developmental Impacts
14
www.acwapower.com
Creating new jobs in the country and Mpumalanga Province in particular
Construction/Commissioning phase Operational phase
Duration ofphase
41 months 30 years
Direct Job creation
~ 3000 jobs at peak of construction and ~ 700 on average with commitments towards:• Local employment• Employment of black people, youth
and women
~ 150 permanent jobs with commitments towards:• Local employment• Employment of black people,
youth and women
The above excludes indirect job creation (e.g. manufacturing, coal supply, limestone supply etc.)
Driving the national transformation agenda – significant local/BEE ownership
Project Ownership
Shareholding by South Africa Entities – 60%Shareholding by Black People - ~ 43%
O&M Ownership
Shareholding by Black People - 43%
Fuel Supplier Shareholding by Black People - ~ 70%
15
Job Creation and Local / BEE Ownership
Key Developmental Impacts
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Significant Local Spend
Construction/Commissioning phase Operational phase
Duration ofphase
41 months 30 years
LocalContent Spend
~R4-5 billion on South African procured goods and services
Annual operational spend on resources, goods and services - ~R12 billion over the
project life (excluding fuel)
Preferential Procurement Spend
~R3 billion on preferential procurement (BBBEE, Black Enterprises, EME, QSE, Women owned companies)
~R8.5 billion on preferential procurement (BBBEE, Black Enterprises, EME, QSE, Women owned companies) over the project life (excluding fuel)
16
Local Content
Key Developmental Impacts
www.acwapower.com
During the lifetime of the project, ~R1600 million will be spent towards socio-economic development programmes:
Socio-EconomicDevelopment
Following a needs assessment and considering Khanyisa’s business activities, communities will be targeted for social infrastructure linked to energy and water, education (targeting science and maths) and healthcare
Skills development
Scarce and critical skills needs have been mapped against a learning matrix for bursary and workplace training opportunities, supported by learnerships, internships, apprenticeships and mentorships as appropriate.
Supplier development
Supplier development plan mapped and Preferential procurement policy will seek to maximise opportunities to procure from BEE, EME/QSE, women-owned businesses.
17
Economic development
Key Developmental Impacts
Legislative and jurisdictional overview
18
19
www.acwapower.com
Integrated Energy Plan (DOE)
Integrated Resource Plan for Electricity
(DOE)
IRP 2010 (DOE)
Coal Baseload IPP Programme
(DOE)
Ministerial Determination (in consultation with
NERSA) Dec 2012(DOE)
CONCLUSION OF CONTRACTS
RFP(DOE)
Environmental Consents
(DEA)
EA(DEA)
WUL(DWA)
PAEL( LOCAL
AUTHORITY )
Generator Licence(NERSA)
Review of DEA
decision
Anticipated Appeal
“Provisional” Appeal
Objection
Legislative Overview
Regulatory and Environmental
Consents
Preferred Bidder Award/Project Development
Undertaking(IPP)
20
www.acwapower.com
2006
NERSARegs
Section 34 Determinations
NEMA ACT 107 OF 1998
NEM:AQAACT 39 OF 2004
NWA ACT 36 OF 1998
EA DEA
PAELLICENSING AUTHORITY
WUL DWS
Jurisdictional Overview
ELECTRICITY REGULATION ACT 4 OF 2006 (ERA)
NATIONAL ENERGY REGULATOR ACT 40 OF 2004
Objects the ERA
“2. Objects of Act
The objects of this Act are to -
(a) achieve the efficient, effective, sustainable and orderly development and operation of electricity supply infrastructure in South Africa;
(b) ensure that the interests and needs of present and future electricity customers and end users are safeguarded and met, having regard to the governance, efficiency, effectiveness and long-term sustainability of the electricity supply industry within the broader context of economic energy regulation in the Republic;
(c) facilitate investment in the electricity supply industry;
(d) facilitate universal access to electricity;(e) promote the use of diverse energy sources and energy efficiency;
(f) promote competitiveness and customer and end user choice; and
(g) facilitate a fair balance between the interests of customers and end users, licensees, investors in the electricity supply industry and the
public.”
21Jurisdictional Overview
Powers and duties of NERSA
“4. Powers and duties of RegulatorThe Regulator -
(a) must -(i) consider applications for licenses and may issue licences for -
(aa) the operation of generation, transmission or distribution facilities; (our underlining)(bb) the import and export of electricity;(cc) trading;
(ii) regulate prices and tariffs; (our underlining)(iii) register persons who are required to register with the Regulator where they are not required
to hold a licence; (iv) issue rules designed to implement the national government’s electricity policy framework,
the integrated resource plan and this Act;(v) establish and manage monitoring and information systems and a national information
system, and co-ordinate the integration thereof with other relevant information systems; (vii) enforce performance and compliance, and take appropriate steps in the case of
non-performance;(b) may -
(i) mediate disputes between generators, transmitters, distributors, customers or end users; (ii) undertake investigations and inquiries into the activities of licensees; (iii) perform any other act incidental to its functions.”
22Jurisdictional Overview
Section 34 of the ERA“ Section 34 New generation capacity
(1) The Minister may, in consultation with the Regulator-(a) determine that new generation capacity is needed to ensure the continued uninterrupted “supply of
electricity;(b) determine the types of energy sources from which electricity must be generated, and the percentages of
electricity that must be generated from such sources;(c) determine that electricity thus produced may only be sold to the persons or in the manner set out in such
notice;(d) determine that electricity thus produced must be purchased by the persons set out in such notice;(e) require that new generation capacity must-(i) be established through a tendering procedure which is fair, equitable, transparent, competitive and cost-
effective;(ii) provide for private sector participation.
(2) The Minister has such powers as may be necessary or incidental to any purpose set out in subsection (1), including the power to-…
(3) The Regulator, in issuing a generation licence-
(a) is bound by any determination made by the Minister in terms of subsection (1);
(b) may facilitate the conclusion of an agreement to buy and sell power between a generator and a purchaser of that electricity.”
23Jurisdictional Overview
DETERMINATION UNDER SECTION 34(1) OF THE
ELECTRICITY REGULATION ACT 4 OF 2006
BASELOAD IPP PROCUREMENT PROGRAMME 2012
Published under Government Notice 1075 in Government Gazette 36005 of 19 December 2012
The Minister of Energy (“the Minister”), in consultation with the National Energy Regulator of South Africa (“NERSA”), acting under has determined as follows:section 34(1) of the Electricity Regulation Act 4 of 2006 (as amended) (the “ERA”) and the Electricity Regulations on New Generation Capacity (published as GNR. 399 in Government Gazette No, 34262 dated 04 May 2011) (“Regulations”),
1. that baseload energy generation capacity is needed to contribute towards energy security, including 2500 megawatts (MW) to be generated from Coal, which is in accordance with the capacity allocated to “Coal (PF, FBC, Imports)”, under the heading “New build”, for the years 2014 to 2024, in Table 3 of the Integrated Resource Plan for Electricity 2010-2030 (published as GN 400 of 06 May 2011 in Government Gazette No. 34263) (“IRP 2010-2030”);
24Jurisdictional Overview
Requirements of section 10 of the ERA
“Section 10. Application for licence(1)
(a) A person who has to hold a licence in terms of section 7 must apply to the Regulator for such a licence in the form and in accordance with the prescribed procedure.
(b) Such an application must be accompanied by the prescribed application fee. (2) Any application contemplated in subsection (1) must include -
(a) a description of the applicant, including vertical and horizontal relationships with other persons engaged in the operation of generation, transmission and distribution facilities, the import or export of electricity, trading or any other prescribed activity relating thereto;
(b) such documentary evidence of the administrative, financial and technical abilities of the applicant as may be required by the Regulator;
(c) a description of the proposed generation, transmission or distribution facility to be constructed or operated or the proposed service in relation to electricity to be provided, including maps and diagrams where appropriate;
(d) a general description of the type of customer to be served and the tariff and price policies to be applied;
(e) the plans and the ability of the applicant to comply with applicable labour, health, safety and environmental legislation, subordinate legislation and such other requirements as may be applicable;
(f) a detailed specification of the services that will be rendered under the licence;(g) evidence of compliance with any integrated resource plan applicable at that point in time or
provide reasons for any deviation for the approval of the Minister; and(h) such other particulars as the Minister may prescribe”
25Jurisdictional Overview
Objections and Responses
26
Objection to generation licence application: groundWork
In summary, groundWork objects on the following basis (as extracted from their objection):
1. The application for a generation permit should be rejected as it is incomplete;
2. The redaction or withholding of portions of the application and annexures denies affected persons a meaningful opportunity to review and submit comments and objections on the proposed application;
3. Environmental pollution from the Khanyisa Power Plant would violate the Constitution and applicable environmental legislation;
4. The Khanyisa would not be in public interest; and
5. The Khanyisa would not be in line with the objects of the ERA.
groundWork’s objections can be divided into two categories: The complaint about the redaction of the licence application made available to the
public; and
groundWork seeks to persuade NERSA to reconsider decisions outside of its jurisdiction; and
27
groundWork Objections
NERSA and groundWork are fully appraised of the confidentiality constraints.
The need for the redaction of confidential information goes to the integrity of the bid process and is aligned with section 217 of the Constitution and PAIA
ACWA Power has tendered to make its confidential information available to groundWork for inspection.
On 6th April 2017, NERSA made a ruling in this regard confirming information that is confidential and information that NERSA has ruled not to be confidential has been provided
Redacted information
28Objection to generation licence application: groundWork
NERSA’s jurisdiction and powers are created by and confined to NERA and NERSAA. NEMA does not confer any authority on NERSA NERSA has no jurisdiction to grant or refuse:
Environmental Authorisations Water licences Atmospheric emission licenses
NERSA has been consulted in terms of Section 34(1) of the ERA regarding: the types and percentages of energy sources
groundWork’s objections have no place in this forum.
NERSA’s Jurisdiction
29Objection to generation licence application: groundWork
Conclusion
30
31Conclusion
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The application is in compliance with the requirements of the ERA
This presentation is intended to amplify ACWA Power’s application to NERSA for a generation licence in terms of section 7 of the ERA, as well as to support ACWA Power’s response to groundWork’s objection.
Thank you
Key ACWA Power Contact:
Prabashen Govender
Project Director : ACWA Power
Email : [email protected]
Mobile : +27 83 273 11 22
