Power generation in South Africa received a significant boost this week, with a new gas-powered plant becoming fully operational and boasting a production capacity of 140 megawatts. Sasol Ltd. (NYSE:SSL), a chemicals and energy company based in Johannesburg, is behind the project, with help from the Finnish manufacturing contractor Wärtsilä (HEL:WRT1V).
Sasol said in a statement on Wednesday that the facility, located in the industrial town of Sasolburg, in the northern part of the country, is now South Africa's largest gas-engine-power plant and will eventually help the company reduce its own carbon dioxide emissions by a million tons annually. The facility also reduces Sasol's reliance on South Africa's domestic power grid, which is a boon for Eskom, South Africa's state-run electricity supply company. Although South Africa has the continent's largest economy, it's barely able to meet its energy demands -- especially during the current winter season, when daily demand can reach 32,000 MW.
Sasol's new plant created 44 permanent jobs, in addition to the 500 temporary jobs created during construction, Enca.com, a South African news service, said.
Eskom is behind schedule on a new power plant called Medupi, in the northern province of Limpopo. Although the facility was expected to be completed this year, it's now unlikely to become operational until 2014. The delay, owing to contractor difficulties and labor disputes, has left officials worried about South Africa's ability to meet growing demand.
“The Medupi power station must come on before winter 2014. To date, winter 2013 has proved to be a challenge but a challenge that we’ve been able to deal with," South African Chamber of Commerce and Industry CEO Neren Rau, said this week, according to domestic news outlet Eye Witness News. “We need to up our game in terms of showing the world that South Africa will not tolerate low levels of quality and failure to deliver.”
Nearly nearly one-fifth of South Africans live without access to electricity at home.
The Sasol facility was completed ahead of schedule and under budget. It was a rare spot of good news for a struggling power industry, especially since the turn toward natural gas marks a departure from the more common, but less efficient, coal-powered means of electricity generation in South Africa.
"This plant is a significant milestone for Sasol, as we begin to ease our load on the national grid and contribute to our own energy efficiency targets," Sasol executive Lean Strauss said. "We are proud of this new facility and it demonstrates how we can add versatility to natural gas."