Thabametsi power station

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Thabametsi power station is a cancelled power station in Waterberg, Limpopo, South Africa. It is also known as Grootegeluk power station.

Location

Table 1: Project-level location details

Plant name	Location	Coordinates (WGS 84)
Thabametsi power station	Waterberg, Limpopo, South Africa	-23.671667, 27.528889 (approximate)

The map below shows the approximate location of the power station.

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Project Details

Table 2: Unit-level details

Unit name	Status	Fuel(s)	Capacity (MW)	Technology	Start year	Retired year
Unit 1	cancelled	coal - unknown	315	unknown	–	–
Unit 2	cancelled	coal - unknown	315	unknown	–	–

Table 3: Unit-level ownership and operator details

Unit name	Owner
Unit 1	Thabametsi Power Project Pty Ltd [100.0%]
Unit 2	Thabametsi Power Project Pty Ltd [100.0%]

Project-level coal details

• Coal source(s): Thabametsi mine, SA

Financing

• Source of financing: South Africa Public Investment Corporation, Development Bank of Southern Africa, Industrial Development Corporation, Standard Bank, Nedbank, ABSA, and Rand Merchant Bank

Background

The original proposal was for a 600- to 1,200 MW coal plant near near Lephalale, Limpopo Province, by Exxarro Resources and GDF Suez (now Engie). It would be fueled by Exxaro’s Thabametsi coal mine. In their formal applications for environmental authorization (EA), Exarro and Engie created the shelf company Newshelf 1282. Environmental approval (EA) for a 1,200 MW coal plant was granted in March 2015. The EA was appealed by Earthlife Africa, suspending the approval until the appeal has been decided by the Minister of Environmental Affairs.

On May 15, 2015, Earthlife Africa and supporters marched on the French consulate in Johannesburg demanding that the French government and the French company Engie divest from coal, starting with Thabametsi. After a sustained public opposition campaign, the CEO of Engie announced on a June 3, 2015 radio show that the company was withdrawing from the project.

After Engie's withdrawal, Exxaro said it would press ahead with the coal plant with Marubeni Corporation of Japan as lead developer. In November 2015 Marubeni Corporation submitted a bid to build the plant, at 630 MW. Preferred bidders are planned to be announced in the first quarter of 2016.

In March 2016, groundwork and Earthlife Africa Johannesburg appealed to the SA Department of Environmental Affairs to suspend the environmental authorization of the proposed Thabametsi plant, saying the EIA for the project was vague and flawed. In response, South African Minister of Environmental Affairs, Edna Molewa, called for a climate change impact assessment for the plant. The requirement suspended but did not revoke environmental authorization for the plant.

In March 2017 the High Court in Pretoria, in response to the Earthlife lawsuit, upheld the authorisation of the project but called for a full climate impact report. The court ordered that Environmental Affairs Mininster Edna Molewa reconsider Earthlife's appeal, taking into account a full climate impact assessment.

In June 2017, Thabametsi made its final climate impact assessment available for consideration. Earthlife Africa Johannesburg, with assistance from the Centre for Environmental Rights, submitted comments that the plant's estimated life-cycle greenhouse gas emissions were high and comparable to the country's oldest coal plants.

On 30 January 2018, the Minister of Environmental Affairs upheld the environmental authorisation for the Thabametsi coal-fired power station. Thabametsi – as a preferred bidder under the Coal Baseload Independent Power Producers Procurement Programme – still needs to obtain further required licences and authorisations in order to reach financial and commercial close under the programme, which appears to be on hold pending the finalisation of the Integrated Resource Plan for Electricity (IRP).

In March 2018 Earthlife Africa and groundWork challenged the Minister for Environment’s decision to uphold the authorisation of the proposed plant. The groups and the Center for Environmental Rights also argued before the National Energy Regulator of South Africa, saying the generation licence for the plant should be rejected.

South Africa's draft Integrated Resource Plan for Electricity (IRP), released in August 2018, contains plans for an additional 1000 MW of new coal-fired power on top of existing and under-construction coal plants, namely Thabametsi and Khanyisa power station. The inclusion of coal is being challenged by environmental organizations.

In September 2018, Marubeni said it was proceeding with the coal project, despite plans to halve its coal capacity.

As of September 2018 a High Court is reviewing the challenge over the environmental authorisation for the power station. The plant also has to obtain a generation license from NERSA, and environmental groups say if a license is granted it will be challenged in the High Court.

The government's 2019 Integrated Resource Plan (IRP2019), released in October 2019, states "There is risk of 900 MW of coal procured [presumably Khanyisa and Thabametsi] not materialising due to financing and legal challenges. There is also likelihood of future coal to power capacity not being realised due to financing challenges."

In October 2020, KEPCO said that the company will not invest in any more new overseas coal projects, including Thabametsi. KEPCO will not proceed with financing the plant unless it is fired by natural gas, rather than coal.

On October 30, 2019, the Centre for Environmental Rights filed an appeal against the provisional licensure issued to start the Thabametsi power plant. They cited violations under Section 43 of the National Environmental Management Act, on the behalf of Earthlife Africa and groundWork. By 2020, it was reported that the High Court upheld the appeal, citing that the Minister failed to take into account the climate change impacts of the Thabametsi power plant.

In early November 2020, South Africa’s biggest state pension fund manager the Public Investment Corporation (PIC), and the Industrial Development Corporation (IDC), said they would no longer support the project. Additionally, lawyers representing environmental lobby groups EarthLife Africa and groundWork said South Africa’s environmental ministry had set aside Thabametsi’s environmental authorization for not adequately considering the climate impacts of the project. This means new authorization will have to be secured from the Environment Department.

On November 11, 2020, Marubeni said it will join co-sponsor KEPCO in pulling out of the Thabametsi coal plant project, stating: "As per our policy that we will not develop any new coal power project, we are in process of the withdrawal from the (Thabametsi) project with the Government of South Africa."

On November 30, 2020, 'Business Day' reported that Thabametsi agreed to the setting aside of its environmental authorisation, settling the litigation with Earthlife and groundWork, and notified the government that it was cancelling the project.

In December 2020, the environmental authorization was officially set aside by the Pretoria High Court.

IPP Selection Process

In 2016 Marubeni submitted the plant for the first round of South Africa’s Coal Baseload Independent Power Producer Procurement Programme (CBIPPPP). Preferred bidders are expected to be chosen in July 2016.

In October 2016, energy minister Tina Joemat-Pettersson announced that Thabametsi power station and Khanyisa power station were the preferred bidders for round one of the country's first Coal IPP program. Under the program, Khanyisa would begin operation in December 2020 and Thabametsi would begin operation in March 2021. The winning bids were 80c/kWh for Khanyisa and 79c/kWh for Thabametsi. The tariff would increase to R1.1c once cost of connection is included.

Marubeni is developing the project with KEPCO of South Korea.

Climate Change Assessment

In June 2017, the project completed its climate and paleontological impacts assessment.

Earthlife Africa Johannesburg, with assistance from the Centre for Environmental Rights, submitted comments on the project's climate change impact assessment. The comments included the following:

• The technology proposed for the Thabametsi plant means that South Africa will be bringing online a new coal plant which will emit the same amount or even more climate-changing greenhouse gas than Eskom’s old coal plants. This means that Thabametsi is clearly not going to be “newer and better” than South Africa’s existing coal fleet; but, in fact, from a greenhouse gas emissions perspective, it is going to be worse;
• The impact assessment has not considered the external costs of the project’s greenhouse gas emissions, such as costs arising from climate change impacts on human health; water availability; and changes in agricultural productivity, which would be required in order to reflect the true costs of building and operating a coal-fired power station, particularly one as emission-intensive as Thabametsi;
• The impact assessment has failed to consider how the power station will exacerbate the vulnerability of the communities and environment in the Lephalale area to the impacts of climate change. This is a fatal flaw;
• The impact assessment fails to propose any measures to substantially and adequately mitigate the plant’s emissions. Short of implementing carbon capture and storage – which is neither technically nor financially feasible – it is not possible meaningfully to mitigate the greenhouse gas emissions of a coal plant – Thabametsi’s assessment says as much. The mitigation measures proposed in the climate impact assessment simply look at maintaining the status quo of the plant’s already high greenhouse gas emissions. The climate impact assessment also has no means of ensuring that the water availability risks to the power station are avoided – this is beyond Thabametsi’s control. Because the significant climate impacts cannot be avoided, the assessment fails to recommend – as it should – that the power station cannot go ahead; and
• In light of the staggering climate impacts of the proposed Thabametsi power station, which will be emitting significant greenhouse gas for at least 30 years (up until 2050 at least), it would be unlawful for the environmental authorisation to remain in place.

Funding

Marubeni and Kepco plan to get US$2 billion for the project from 12 lenders, including South Africa Public Investment Corporation, Development Bank of Southern Africa, Industrial Development Corporation, Standard Bank, Nedbank, ABSA, and Rand Merchant Bank. In October 2016 KEPCO announced that it planned to invest US$133 million in the project. The sponsors are aiming to reach financial close on the plant by March 2018.

Three of the South African commercial banks, Nedbank, Standard Bank and FirstRand, which had been considering financing for Thabametsi have announced that they are withdrawing from the project.

In November 2020, Reuters reported that Thabametsi's construction had been put in further doubt following confirmation from South Africa Public Investment Corporation, the biggest state pension fund manager, and the Industrial Development Corporation that they would no longer be supporting the project. It was also reported that the Development Bank of Southern Africa was reassessing the project to determine if it conforms with its policy of a "just transition towards a low carbon economy".

Fuel supply

The fuel for the proposed power station would be supplied from Exxaro’s Thabametsi coal mine, a prospective opencast greenfields mine, which would supply up to 3.8 million tonnes per annum. Exxaro secured approval for the Thabametsi coal mine in June 2014. The mine was forecast to start output in the second half of 2017. The first phase of the mine would coincide with the development of the coal plant.

Public opposition

In March 2016, groundwork and Earthlife Africa Johannesburg appealed to the SA Department of Environmental Affairs to suspend the environmental authorization of the proposed 1200MW Thabametsi, 600MW KiPower and 1050MW Colenso power stations, saying the EIAs for the projects are vague and flawed. All three plants will be located in drought disaster areas, and the Highveld and Waterberg, in which Thabametsi and KiPower are set to be built, have been declared air quality priority areas under the Air Quality Act. The companies bidding to develop Thabametsi are required to conduct climate change and palaeontological impact assessments.

In March 2017 the High Court in Pretoria, in response to the Earthlife lawsuit, upheld the authorisation of the project but called for a full climate impact report. The court ordered that Environmental Affairs Mininster Edna Molewa reconsider Earthlife's appeal, taking into account a full climate impact assessment.

Articles and Resources

Additional data

To access additional data, including an interactive map of coal-fired power stations, a downloadable dataset, and summary data, please visit the Global Coal Plant Tracker on the Global Energy Monitor website.