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Sappi selected as preferred bidder of Ngodwana biomass project

It is not often we hear a little good news. These days with the hot topic of electricity on the tongues and minds of all South Africans, it is perhaps a good reason to heave a huge sigh of relief when we hear that plans are in place to look at alternate means of producing electricity.

With the Department of Energy under stress to find a solution to our energy crisis and a nation close to rising up-in-arms against our only power producer. With economists hitting back at the growing power crisis by cutting SA’s economic growth outlook for 2015, saying that country faces a deepening and prolonged energy crisis from electricity supply disruptions effectively “condemning” SA to two years of sluggish growth, it has become a matter of finding a solution or have a national strike on our hands.

So, it is (pardon the pun) great to see a light at the end of the tunnel when paper and chemical cellulose maker, SAPPI recently announced that they have been selected as preferred bidder in the Ngodwana energy biomass project in the Department of Energy's 4th window Renewable Independent Power Producers Procurement Programme (REIPPPP).

Situated at the SAPPI Ngodwana Mill site in the Elands Valley, the Ngodwana Energy project is expected to produce 25MW (could be upgraded to 55MW), which would make it the largest biomass to power producer in South Africa. 

At this stage SAPPI representatives are not committing to a timeline, stating that the project is still only at the bidding stage. The process now goes to public participation and final documentation before a decision is reached.

The Project will contribute to the growth and development objectives of the National Government, Mpumalanga province, the communities and businesses in the vicinity. Significant ongoing value is created due to the nature of biomass projects and the monetary and job creation spend across the project value chain; from collecting biomass from local  plantations, through plant and equipment contracts, to community impact through the Trusts and the economic development and socio-economic development spend as well as shareholder returns.

"Sappi is pleased to be able to contribute to the increased availability of renewable energy in South Africa" commented Alex Thiel. "Sappi will continue to focus on extracting maximum value from the renewable and sustainable wood fibre that we grow. This project builds on our earlier R3bn investment at Ngodwana Mill and further strengthens our presence in Mpumalanga province".
In addition to Sappi Southern Africa and its project partners Fusion Energy and KC Africa, an Ngodwana Energy Employees Trust and an Ngodwana Energy Community Trust will each hold a 5% stake in the project.

The benefits of using biomass fuel for electricity generation are clear:

  • Biomass power has a high load factor (Base Load) in the region of 200 000MwH per annum (90 % in comparison to other technologies which have 30 - 40% availability factors);
  • The value chain creates higher employment in operations;
  • This is technology proven over many years;
  • The forestry industry is not as affected by seasonality and climatic conditions in contrast with annual crop supply chains; and
  • Unlike coal the forestry industry can reinvest in raw material supply by replanting trees for future use as an energy source.

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