Arandis Power courts fuel partners
Arandis Power is committed to construct a 120 Megawatt (MW) power plant, an additional substation, and short power lines to be donated to Nampower after the project has been commisioned. Construction will commence as soon as an amended Environmental Impact Assesment (EIA) has been approved and a Government Implementation Agreement has been obtained from the line ministry, Ezio Vernetti, Managing Director of Arandis Power confirmed.
According to Vernetti, the plant will be run at half capacity and generate 60MW, in line with an agreement signed with power utility Nampower. Additionally, a 45,000 ton storage facility will be constructed in Walvis Bay to house the fuel required for power generation. The rationale, Vernetti explained, was that existing fuel storage facilities in Walvis Bay contain fuel with a sulphuric content in excess of 3%. Arandis Power is seeking to use fuel with a sulphuric content of not more than 2% to reduce the environmental impact of burning fuel in the power plant.
But a fuel partner is yet to be identified. NAMCOR however, appears as the only local supplier and negotiations are still on-going with various potential suitors, Vernetti explained. He added that Arandis Power is looking at two options with regard to the procurement of oil.
The prospective oil suppliers can either utilise a combination of sea and road to get the oil to the facility, or they can use the storage facility in Walvis Bay. Vernetti said 200,000 tonnes of oil will be needed per year to run the plant at full capacity.
Potential suitors, Vernetti explained, would have to guarantee a minimum supply of fuel ,implying that Arandis Power would have the option of acquiring fuel from the open market if the supplier fails to deliver. This will be contractually bound.
The amended EIA makes provision for the solar component to be added to the plant and Arandis Power is counting on its approval by August or latest September. The solar plant would have a capacity to produce 50 MW that would be fed into the national grid at no cost to Nampower Vernetti said. Referring to the solar plant as the 9th engine, the 50MW photovoltaic component will produce at least 127,000 Mega watt hours of electricity per year at zero fuel cost. This electricity otherwise would have been produced by burning approximately 23,000 tons of fuel. According to Vernetti, Arandis Power opted to lcoate the plant in Arandis due in part to the proximity to the harbour town of Walvis Bay, a lack of industrial land in Walvis Bay and the need to avoid the mist belt bound to erode the components of the power plant.Expected to cost N$3 billion, the plant will take approximately 22 months to construct and a local commercial bank, Standard Bank will underwrite the debt. The power plant will create 65 new permanent jobs in Arandis but will employ over 600 people during the 22 month construction period. The Power Purchase Agreement with Nampower is envisaged to run for 20 years.