Platinum’s potential power source

2015-04-05 15:00

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Fuel cell technology will ease the burden on electricity grid and give mining houses a new energy source

South Africa is starting to put money behind fuel cell power generation technology in the hopes of creating a whole new market for its most valuable resource, platinum.

In the process, a long-term plan for locally manufactured fuel cells is coalescing, which could provide a model for mineral beneficiation in hi-tech manufacturing. The kicker is that it actually has the wholehearted support of the mining industry.

The Chamber of Mines this week launched its new 100 kilowatt fuel cell – an odd, brightly coloured appendix to the century-old building in downtown Johannesburg.

It is the first building base load fuel cell in South Africa and is meant to demonstrate that the technology can be cost-effective “in the long run”, according to the chamber’s chief operating officer, Roger Baxter.

It is the result of a public-private partnership involving local group Mitochondria Energy, which was commissioned by the department of trade and industry (the dti) to develop a commercialisation strategy.

The chamber project received a R3.2?million loan from the Industrial Development Corporation (IDC) to cover a feasibility study, while the chamber invested R5?million.

According to spokesperson Sidwell Medupe, the dti has spent R7.5?million on the project.

“The intention is to develop the market and see large-scale manufacturing of fuel cells and beneficiation of platinum in South Africa, and this feasibility work feeds into the establishment of a platinum-based special economic zone,” said Medupe.

The special economic zone aims to lure major manufacturers of fuel cells to South Africa with incentives – and the promise of a market for the technology.

At the launch event, attention had already shifted to a much larger fuel cell project in the works at Impala Platinum.

Mitochondria is again at the helm, with possible funders including the IDC, the Development Bank of Southern Africa, as well as the Japan Bank for International Cooperation.

Fuel cells are being supplied by Japan’s Fuji Electric.

The Impala project will also be “supported by the dti in one way or another”, according to Medupe.

Impala intends to install 18 100kW units like the chamber’s one to provide 1.8 megawatt electricity to its Springs refinery complex. The refinery has enough excess hydrogen gas to fuel the installation – a major boost to its viability.

The IDC has a “joint development mandate” with Mitochondria, which gives it an option to buy 25% of individual projects like the one at Impala, according to spokesperson Mandla Mpangase.

“There are a number of fuel cell projects under development that the IDC will consider funding.

“The focus is on developing projects for fuel cells that use platinum in order to stimulate demand,” he said in response to questions.

Fuel cells don’t have to use platinum and there are variants using a variety of other catalysts. The virtue of platinum-based cells, however, is that they run “cold” – at temperatures lower than 200°C, says Raoul Goosen, a specialist in green technologies at the IDC.

Impala is already talking about a second phase involving 22MW in fuel cell capacity, although this second phase still “needs much more detailed techno-economic work”, according to Impala spokesperson Johan Theron.

Among other things, the bigger installation requires a solid long-term gas supply – the big challenge to any widespread use of fuel cell technology.

The “hurdle price” that makes using fuel cells feasible is complicated, says Theron.

“In the current environment, if you can source gas competitively, you should be near breakeven – depending on how you use the power,” he adds.

The variables include the cost of gas, the capital cost of installing the cells and whether there is a way to recycle the heat generated.

If you get all that right, it will deliver value, says Theron.

“Unless you believe Eskom will fix their problems, increase capacity and lower future electricity prices.

“Then there is the small matter of possible future carbon taxes and offsets,” notes Theron.

In the long run, fuel cells are becoming more viable despite themselves.

With every new Eskom price increase, fuel cells look better in comparison.

The same dynamic is playing out on an international level with the real competition to fuel cells – diesel generators – losing ground due to the long-term rise in diesel prices.

Displacing diesel generators is the first thing to do, says Goosen.

The biggest hurdle, however, is the stupendous capital cost of the fuel cells themselves.

A 5kW diesel generator costs a little more than R20?000, but a 5kW fuel cell comes at a price tag of more than R300?000.

If the initial cost is financed over a long term, the cost difference disappears and fuel cells can actually be cheaper because they require little maintenance, have long lives and low running costs.

That is where the IDC’s financing can help stimulate demand. The only solution to the high initial cost is mass production, which requires a ready market. The ready market is what South Africa needs to create.

“It is a bit of a chicken-and-egg situation,” says Goosen.

Fuel cells like the chamber’s are basically assembled order by order because there is so little demand, he tells City Press.

The emerging government plan centres on what trade and industry minister Rob Davies called an “early harvest” of applications for fuel cells.

These are off-grid industrial estates, cellphone towers and data centres. As with most South African industrial policies, the idea is that South Africa can be the major player across the continent.

At the launch this week, Davies stressed that the looming free trade deal between the Southern African Development Community and the East African Community will give South Africa preferential market access in a free trade zone spanning “from Cape to Cairo”.

The 200?000 towers underpinning the cellular networks across Africa are a particular target.

The thinking around them is to use small 5kW fuel cells powered by methanol, says Goosen.

Methanol has the advantage (over hydrogen) of being a liquid, transportable in barrels or trucks.

According to Mashudu Ramano, chair of Mitochondria, fuel cells herald a new era of energy supply that is decentralised, on-site and sustainable.

At the launch, he pushed for a South African commitment to install 1?000MW of fuel cell power by 2019 – a very unlikely target given that Impala’s 1.8MW will take almost a year to set up.

The grand long-term vision echoes the now mostly forgotten attempt to roll out the so-called pebble bed modular reactor under the then trade and industry minister Alec Erwin.

The idea is still to reshape the power system by cutting out the inefficient long-distance transmission lines South Africa relies on to move power from the coal mining regions to the rest of the country.

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