Coega IDZ gas station gets the thumbs up

Nelson Mandela Bay Mayor Athol Trollip has applauded the announcement of Coega Industrial Development Zone (IDZ) as one of the locations for a gas-to-power station and says this will create much-needed jobs in the region.

Earlier this month, the department of energy announced that the Coega IDZ would be one of two locations for the gas-to-power programme, along with Richards Bay IDZ.

Coega IDZ will have 1 000 megawatts of the power facility allocated to the zone, with the investment into the operation expected to total R25 billion.

“We as the DA-led coalition want Coega to work optimally and to create as many job opportunities as possible. And I believe that it is going to be a very important decision in our strategy to create jobs and to maximise the productivity of our two ports. Very few cities in the world have got two ports and that is one economic advantage that we do have that we need to capitalise on,” he said.

“We are very excited at the prospect of that development, as well as other developments happening in our two ports through Transnet and other government organisations.

“It looks like our two ports, because of their strategic location and the geographic importance, are becoming more and more of an issue, and the fact that they are situated in a very sheltered bay makes them an ideal place for trans-shipment of motor cars, manganese and, now, liquid natural gas,” he said.

The mayor said the alternative means of energy would help in the industrialisation initiatives of Nelson Mandela Bay, where there was massive youth unemployment.

“So if we can get industrialisation going around the Coega and Port Elizabeth ports, then we will be able to address the challenge that is unemployment,” he said.

Sandisiwe Ncemane, Coega Development Corporation (CDC) Business Development Manager for energy projects, said the gas-to-power project was key for energy security, diversity and socioeconomic development.

“This project will allow the Coega IDZ to become a diverse energy user, in conjunction with building the local energy sector. The project will also serve as a significant source of socioeconomic growth.

“The implementation of this gas-to-power project will allow greater energy independence, which will boost South Africa’s GDP. It will also help create direct and indirect jobs,” Ncemane said.

She said the CDC had proved its readiness for gas-to-power and had established itself as the ideal location for both renewable and conventional energy.

The CDC conducted a prefeasibility study under the guidance of the department of energy, which confirmed suitability and viability of a gas-to-power station to be located at the Coega IDZ.

Coega IDZ, consisting of 14 zones with a total of 11 500 hectares, is already home to the 342MW Dedisa Peaking Power Plant (PPP), designed for conversion to gas-driven.

The Dedisa PPP, as a testament to the CDC’s ability to implement mega infrastructure projects, became operational in 2015 after its construction was completed on record time.

Kevin Hustler, Nelson Mandela Bay Business Chamber CEO, said the Bay was positioning itself as the energy hub of South Africa, hosting a basket of strategic energy projects in the region.

“In order to grow the economy for the people of Nelson Mandela Bay, we need alternative sources of energy to counter the burden of above-inflation electricity prices and ensure security of supply to the broad representation of manufacturers and businesses in the region that necessitate electricity at a globally competitive price.

“Industry in Nelson Mandela Bay has been affected by its deteriorating competitive edge due to the significant increases in electricity pricing since 2008.

“Developing the electricity and energy potential of the region would greatly benefit organised business in the Nelson Mandela Bay region,” he said.

He added that converting more gas to electricity at Coega would not only relieve pressure on the country’s electricity grid, but having gas as an additional utility in the mix would make the industry more cost-competitive and boost investor confidence in the region.

Hustler also welcomed the potential of job creation through the project.

“The Nelson Mandela Bay Business Chamber in particular welcomes the job-creation possibilities that will be associated with a megaproject of this nature, as well as the energy security that a gas-to-power project will bring for the region,”
Hustler said.

Read Fin24's top stories trending on Twitter:

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot