Khanyisa power station

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The Khanyisa Power Station was a proposed 300 to 600 megawatt (MW) coal-fired station for the Emalahleni area of South Africa.

Location

The map below shows the approximate location where the plant would have been built, near Kleinkopje colliery in Mpumalanga.

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Background

Anglo Coal

The power station was going to be located on the site of Anglo American Thermal Coal’s Kleinkopje colliery in Mpumalanga. It would have been fueled by discarded coal from the colliery and would have functioned as an independent power producer. According to AATC, the initial commercial operations date for the project was 2015, but owing to some challenges faced by the project, it would probably go into production in 2017. Problems included: (1) the amount of coal at local mines would not have been sufficient to fuel the plant for its entire lifespan; (2) approval still needed to be received from multiple regulatory bodies.[1]

In April 2013, Anglo American regional head of strategy Ian Hall told Mining Weekly that the project would be deferred "to a more appropriate time" due to lack of demand in the platinum market. The sole offtaker for all the electricity from the plant is Anglo American Platinum (Amplats).[2]

In July 2014, Anglo Coal said it was continuing to evaluate the commercial options for the project. Anglo Coal said its discarded coal could support a 300- to 450MW power plant for Anglo’s South Africa operations, including its platinum mines, for 40-50 years. However, Anglo said it had no intention to finance, build, or operate a power station, but would seek an Independent Power Producer to do so.[3]

In January 2019, Nedbank pulled out funding for the project. Nedbank South Africa cites that it's no longer funding coal power producers due to its commitment to “green” funding, responsible lending, and supporting sustainability initiatives.[4]

ACWA Power

Saudi Arabia's ACWA Power expressed interest in the project.[5] In 2015, Anglo Coal transferred all duties and responsibilities related to the Khanyisa project to ACWA Power. ACWA Power planned to bid the Khanyisa IPP Project under the Department of Energy’s Coal Baseload Programme. ACWA Power proposed increasing the approved capacity from 450 MW to 600 MW.[6]

ACWA submitted a bid for a 300 MW Khanyisa discard-coal project in Mpumalanga under South Africa’s baseload coal Independent Power Producers (IPP) Programme. All site-related environmental authorizations for the project were secured. The department expected to announce preferred bidders in July 2016.[7]

IPP Selection Process

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 Baseload Independent Power Producer Programme (CBIPPP). Under the Programme, 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. The tariff would increase to R1.1c once cost of connection was included.[8][9]

High Court ruling casts uncertainty over project

In a March 2017 ruling, the North Gauteng High Court confirmed that a climate-change assessment must be done prior to the authorization of any new coal-fired power station in South Africa. According to a May 2017 assessment by the Daily Maverick, the ruling cast doubt on the future of the KiPower power station and the Colenso power station.[10] In September 2017, groundWork, represented by the Centre for Environmental Rights, instituted two new court applications in the Pretoria High Court challenging decisions by the Department of Environmental Affairs to authorize the KiPower and Khanyisa plants without first conducting an assessment of climate impacts.[11]

In September 2017, environmental justice organization groundWork, represented by the Centre for Environmental Rights, instituted two new court applications in the Pretoria High Court challenging the decisions of the Minister of Environmental Affairs and the Department of Environmental Affairs to authorize Khanyisa without a full assessment of the plant's climate change impacts.[12]

South Africa's draft Integrated Resource Plan for Electricity (IRP), released in August 2018, contained plans for an additional 1,000 MW of new coal-fired power on top of existing and under-construction coal plants, namely Khanyisa and Thabametsi power station. The inclusion of coal was challenged by environmental organizations.[13]

As of September 2018, the challenge to the plant's environmental authorization without a climate change impact assessment was under review in the Pretoria High Court. The plant also had yet to obtain a generation license from the National Energy Regulator of South Africa (NERSA), and environmental groups made clear that if a license was granted, it would be challenged in the High Court.[14]

The government's 2019 Integrated Resource Plan (IRP), released in October of that year, stated "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."[15]

In a July 21, 2020, South Africa’s Water Tribunal in Pretoria upheld an appeal to scrap the two water use licenses granted to the project in 2017 by the Department of Water Affairs and Sanitation. The appeal was brought by the environmental group groundWork, who argued the water use licenses for Khanyisa underestimated climate risks including disruptions to rainfall. The tribunal said that “the effects of climate change are a relevant factor to be considered” under the 1998 National Water Act. The tribunal’s ruling meant ACWA would have to re-submit applications for water use, requiring new rounds of public and expert consultation, likely to take months.[16]

2020: DEFF finds plant's environmental authorization expired

In February 2020, the Department of Environment, Fisheries and Forestry (DEFF) ruled that Khanyisa’s environmental authorization had lapsed on October 31, 2018, and that the activities it undertook in relation to the project were unlawful. ACWA disputed the DEFF’s ruling.[17]

According to the NGO groundWork, "ACWA will need to apply afresh for an environmental authorisation for the Khanyisa plant – a process that will likely take several years."[17]

According to the NGO Center for Environmental Rights, "without a valid environmental authorisation, ACWA cannot legally commence building the power plant. It also cannot reach commercial or financial close under the Coal IPP Programme without an environmental authorisation, risking its 'preferred bidder' status under the Coal IPP Programme."[17]

2021: Court agrees the plant's environmental authorization expired

In a May 27, 2021 order, the Pretoria High Court agreed that the environmental approval for the power station had expired. According to the Centre for Environmental Rights, which represented groundWork in the legal matter, the court's decision "is effectively the final nail in the coffin" for the proposed coal plant. Without a valid environmental authorization or a water use license, ACWA cannot legally commence building the power plant.[18]

Financing

Three of the South African commercial banks, Nedbank, Standard Bank and FirstRand, which had been considering financing for Khanyisa and Thabametsi announced that they were withdrawing from the projects.[19][20]

Public opposition

Life After Coal/Impilo Ngaphandle Kwamalahle campaign

The Khanyisa project is opposed by the Life After Coal/Impilo Ngaphandle Kwamalahle campaign, a joint effort by EarthLife, groundWork, and the Centre for Environmental Rights aimed a discouraging investment in new coal-fired power stations and mines, accelerating the retirement of South Africa's coal infrastructure, and enabling a just transition to renewable energy systems.[11]

Project Details

  • Sponsor: ACWA Power
  • Parent company: ACWA Power
  • Location: Witbank, South Africa
  • Coordinates: -26.76955, 29.200974 (approximate)
  • Status: Pre-permit development
  • Capacity: 300 MW
  • Type: Circulating fluidized-bed
  • Projected in service:
  • Coal Type: Waste coal[2]
  • Coal Source: Anglo's collieries in eMalahleni, formerly Witbank[2]
  • Source of financing:

Articles and resources

References

  1. "Khanyisa power project brings new technology to South Africa ," Mining Weekly, July 26, 2013.
  2. 2.0 2.1 2.2 Martin Creamer, "Anglo power project deferred," Mining Weekly, April 29, 2013
  3. "Gearing up with coal," Financial Mail, July 31, 2014
  4. Nedbank no longer funding coal power producers The Herald, accessed June 2019
  5. "Saudi power group poised to make coal IPP bid, as it sets 5 000 MW regional target," Mining Weekly, June 5, 2015
  6. "Khanyisa Coal Fired Power Station – Draft EIR," ACWA Power, July 14, 2015
  7. "ACWA to reach beyond Bokpoort CSP in South Africa," voiceofrenewables, May 18, 2016
  8. "Thabametsi and Khanyisa take first in SA coal baseload IPP," ESI Africa, October 11, 2016
  9. "FACTS SHEET, Bid Window 1: Coal Procurement Programme," Department of Energy, October 2016
  10. Khanyisa: Environmentalists challenge new coal-fired power station," Daily Maverick, May 2, 2017
  11. 11.0 11.1 "Another Two Proposed Coal Power Plants Taken to Court," Mining Review, September 12, 2017
  12. "Another two proposed coal power plants taken to court," Mining Review, September 12, 2017
  13. "Life After Coal, Greenpeace Africa slam inclusion of new coal in electricity plan," Centre for Environmental Rights, August 28, 2018
  14. "Why South Africa’s new coal-fired power station IPPs will never be built," Mining Review, September 25, 2018
  15. Integrated Resource Plan (IRP2019), South Africa Dept. of Energy, October 2019
  16. "South Africa tightens restrictions for new coal power in landmark ruling," Climate Home News, August 6, 2020
  17. 17.0 17.1 17.2 "Another nail in the coffin for doomed Khanyisa private coal plant project," Center for Environmental Rights, February 18, 2020
  18. "Final nail in the coffin for proposed Khanyisa Coal Power Station," Centre for Environmental Rights, June 3, 2021
  19. Thabametsi coal power plant Bank Track, June 2019
  20. Amanda Watson, "So. Africa: Major banks pulling out of funding coal-fired plants due to environmental & social concerns," The Citizen, April 22, 2019

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External resources

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