Govt greenlights 100MW CBM power tender
Brian Benza | Friday July 8, 2016 18:00
In a statement released recently, the Ministry of Minerals, Energy and Water Resources (MMEWR) announced that it had received an approval from the Public Procurement and Asset Disposal Board (PPADB) to shortlist Tlou Energy and Sekaname Pvt Limited for the CBM tender through the selective tendering method. “The PPADB has approved the ministry’s request to shortlist the two companies for the development of coal bed methane fuelled pilot power plants in Botswana with a combined power production capped at a total of 100MW,” read the notice.
Tlou and Sekaname will each provide 50MW of CBM-fired power plants.
Tlou, which flared its first gas in 2014, says it has the most advanced CBM project in Botswana. It holds 10 prospecting licences covering an area of 8,300 square kms and its flagship the Lesedi project already benefits from significant, independently certified contingent resources of 3.3 trillion cubic feet (TCF) (3C).
Tlou acting managing director Gabaake Gabaake said: “We are elated by this decision and look forward to receiving the full details from the government. Although we always planned to expand our project beyond the 10MW initially envisaged as being fast-tracked for development, a 50MW project is five times larger than expected and a fabulous result for the company. Importantly it provides more certainty to our investment case to increase our power output as we develop our field.
“A larger project also provides more options regarding project development as well as potential benefits from economies of scale.”
In November 2015, the government issued a request to submit technical information for the supply of emergency power to address the country’s chronic power deficiency and to assist in fast-tracking the development of the gas industry in the country.
This is due to the fact that the country imports significant amounts of power from South Africa due to the continued and still unsuccessful remedial work taking place at Morupule B coal-fired power station.
The initial proposal submitted by Tlou Energy was for a 10MW gas-to-power pilot project.
“The next step is for the company to receive full details from the government. Once received, Tlou will commence work on a detailed proposal for the supply of CBM power, including negotiations on the terms of an off-take agreement, network access and project funding,” added Gabaake. Sekaname, on the other hand, is a wholly owned subsidiary of Kalahari Energy. Kalahari Energy is the holder of five prospecting licences in the eastern part of the Kalahari Karoo Basin covering an area of 3,912 square kilometres.
In his address at the recent Botswana Resource Sector Conference in Gaborone, the Minister of Minerals, Energy and Water Resources Kitso Mokaila said CBM has been included into the country’s plans to reduce power shortages, with the government committing to an initial 100 MW of gas power to be brought into the market.
Government is soon set to bring before legislators changes to the Minerals Act, which include guidelines for the development and commercialisation of the CBM industry. Government is looking to add up to 820MW of power into the national grid from both coal and solar-powered plants by 2020.
Independent power producers were expected to develop two 300MW coal fired stations while refurbishment of a 120MW coal-fuelled power plant was expected to be completed by end of 2017. A tender for a 100MW solar power station was also expected to be out soon, with the plant due to be running by 2018.