TWO Independent Power Producers (IPP) have expressed an interest to explore the feasibility of establishing gas to energy technology in the City of uMhlathuze.
At Tuesday’s Exco meeting, Council heard that a large consortium and a second company called Gas2Power had met the minimum requirements for the Request for Proposal (RFP) stage and would be granted 12 months to complete the necessary feasibility studies.
The consortium comprises Origin Group Investment Holdings, Core Project Management, Ukubusa Empowerment Solutions, Kholofelo Solutions, Umhlanga Oil, Dr Syd Kelly and Maithu Consulting & Project Management.
Earlier this year the two bidders made a formal presentation to the municipality outlining their proposed location of the plant, environmental impact, business plan, proposed connection point to the City’s electricity grid and the economic benefits.
The proposal further included the technical expertise to design, supply, install and operate a local plant meeting international best practices.
Greenhouse gases
Coal-fired power stations are considered to be a major contributor to the emission of greenhouse gases, which in turn is a driver of climate change.
Alternative sources of energy have therefore received the green light from government.
Government has proposed a carbon tax of R120 per ton of CO2e (carbon dioxide equivalent).The tax will come into effect on 1 January 2016 and increase by 10% a year. Thresholds will apply in the first five-year phase.
Carbon tax is designed to create incentives for companies and individuals to change their behaviour and consumption patterns to reduce the reliance on fossil fuel.
The City is estimated to have 15 698 tonnes of CO2 emissions which amount to R1 883 760 of carbon tax.
On submitting a successful proposal, a Power Purchase Agreement (PPA) of a minimum period of 20 years will be signed between the municipality and the IPPs in line with the Municipal Finance Management Act and the Municipal Systems Act.
Compliance with NERSA licensing requirements is compulsory and a report will be submitted to Council on completion of the feasibility study.
