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Directors' report

6. Research, development and demonstration

Research is important to the South African power sector and is normally of a long-term nature. Not all of the research projects will be completed
and considered for implementation during any one period. The projected average returns in avoided and direct cost reductions over the past five
years were more than 5:1 when compared to research expenditure (excluding costs relating to PBMR). In addition, non-quantifiable benefits in
social, environmental and customer satisfaction were realised. Refer to research, development and demonstration expenditure table below.

Research, development and demonstration expenditure


	2006	2005	2004
	(12 months)	(15 months)	(12 months)
Research, development and demonstration, Rm	167,1	227,6	188,9
PBMR, Rm	6,9	35,0	35,0
Total, Rm	174,0	262,6	223,9
Percentage of revenue, %	0,49	0,63	0,66

6.1 Research

Some key research activities undertaken are listed below.

Fine coal research
Between 100 and 200 million tons of ultra-fine coal has been discarded in the Mpumalanga highveld, that has a potential use as fuel for power stations. Approximately 6,0 million tons are added annually. While this coal has a high calorific value, it is unsuitable as fuel for power generation due to the high moisture content. Research has shown that waste heat can be used to dry coal. A design review for a pilot plant was carried out on the technical issues and financial model proposed in the feasibility study. No fatal flaws were identified in the feasibility study proposals and an environmental impact assessment for the project is under way. An amendment to the colliery environmental management plan and an application for a water use licence have been made.

High-voltage direct current research
Eskom has started a large research and development programme to study long-distance high-voltage direct current transmission in sub-Saharan African conditions. The focus of the research is, firstly, on obtaining scientific data and, secondly, the verification of electrical design parameters for transmission lines intended to operate in the 800 – 1 000kV range.

Underground coal gasification
The feasibility of underground coal gasification is currently being investigated by Eskom at the Majuba coalfield, as a means of extracting energy from presently unminable coal resources in one of the most environmentally acceptable manners available. The initial phase for constructing the pilot plant was approved after the successful completion of a prefeasibility study in December 2003, and detailed site characterisation testing in June 2005. The site characterisation objectives were to better understand the suitability of the Majuba coal resource in terms of coal composition and reactivity, and the geology, hydrogeology and rock mechanics of the reserve. It was confirmed that the Majuba coal deposit, specifically the selected site, are technically suitable for this technology.

Underground coal gasification is a process in which coal is converted on site into a combustible gas that can be used for power generation or chemical production. This avoids the need for coal mining, transportation, preparation, the gasification process, and the transportation and disposal of ash. This has cost, labour and environmental benefits. The technology has been researched over the past 50 years, and has been in commercial operation for more than 40 years in the former Soviet Union. The gas was used for heating and power generation. Although this technology is strictly commercially mature, former Soviet technology is only now emerging in the western world with the first pilot plant installed and operating for four years in Australia. There have been many national research and development programmes on underground coal gasification running in the USA, UK, Belgium, New Zealand and, more recently, Spain, operating with the more expensive and non-commercial USA technology. The Chinese have developed another variant, designed specifically to extract remaining coal reserves from previously worked underground coal mines.

Knowledge management

Evaluation of an appropriate platform for the optimisation and delivery of knowledge in the organisation was undertaken. Effective solutions were identified for knowledge retention.

Eskom power series

The Eskom power series of technical books is being developed to capture technical skills from experienced engineers and specialists and making this available to young graduates.

Climate change and rainfall

In 2004, an attempt was made to model possible climatic change projections over a specific region of South Africa to aid planning for water resources and power utility expansion. In 2005, a study was undertaken to determine whether any significant observed trends appear in South African rainfall measured over the past 42 years (1960 to 2001), and whether this was due to climate change. It appeared as if there is a seasonal shift in rainfall towards drier conditions in the early winter over the central summer rainfall region, and wetter conditions in the late winter and early summer over the western coastline and interior. The research did not link the changes in rainfall to climate change.

Coal

Clinker production

Eskom annually produces over 30 million tons of coal ash. A study has proven that it is possible to produce cement clinker from coal ash. This process of recycling ash will have positive economic and environmental benefits.

Emission factor

This project was aimed at improving emission factors in the power generation sector of southern Africa. Emission factors specific to the region were generated through fuel and power plant analysis. The findings include some deviation of emission factors from the intergovernmental panel on climate change default values. The project also generated useful information for improving national greenhouse gas inventories and emission baselines.

Electricity voltage regulation

Costs are prohibitively high for the electrification of deep rural areas. Research was conducted to reduce costs and contribute to achieving electrification targets. A proposed solution is electronic voltage regulation. This creates the opportunity to save on electrification costs in rural areas by regulating low-voltage lines instead of extending medium-voltage lines. Fifty regulators installed on existing low-voltage feeders during 2005, provided the operational and financial benefits. Another 100 units are being manufactured and will be installed on existing and new electrification networks during 2006.

Evaluation of battery technology

A proton exchange membrane fuel cell as an alternative to the traditional lead-acid and nickel-cadmium batteries was tested. The objective is to test other power standby devices and to evaluate their performance in the field.

Phase shifting transformer

A phase shifting transformer controls active power flows on an interconnected power transmission network by controlling the phase angle at desired locations. This allows for capacity release, technical loss reduction and power trading. Eskom expertise on power transformers and protection, as well as international expertise on phase shifting transformers compiled the specification for the device in 2005. One of the project objectives is to avoid the construction of new lines by upgrading existing lines.

Line inspection capability for distribution power lines

In response to a need for better technical performance for distribution lines and a high number of claims against Eskom for personal loss of life and assets from members of the public, new mobile computing tools realised financial savings from reduced breakdowns repairs and liability claims. When quantified and netted off against the capital and operational costs, an internal rate of return of 20% was realised.

Fly ash acid mine drainage

There are two research projects on fly-ash and acid mine drainage. The first is focused on the use of a fly-ash wall to block and neutralise acid mine drainage. Laboratory tests were continued to understand the flow and chemical dynamics of acid mine drainage. The second project addressed the co-disposal of fly ash or its aqueous extracts with acid mine drainage. The research has proved the feasibility of producing zeolites from co-disposed solids from acid mine drainage and fly ash. Benefits of this research include a reduction of pollution and neutralisation of waste streams. A further area of research relating to fly ash includes its use for rehabilitation and reclamation of mining land.

Air quality

Matimba study

Research continues into the environmental impacts of power generation activities in Lephalale. This includes a passive monitoring network of ten SO₂ sites. The analysis of SO₂ passive sampling undertaken near Matimba Power Station is ongoing. The samplers are in an area of approximately 1 400km², with the majority upwind and downwind of the Matimba power station and Grootegeluk coal mine.

Air quality impact research facility

Eskom has been conducting ambient air quality monitoring in the Mpumalanga highveld at the Elandsfontein site for over 20 years. A main aim for 2005 was the assessment of the sulphate budget for the site.

Wind

One of the inherent problems associated with imbedded generation, such as wind turbines, is that this energy is lost if load is shed in large areas. The wind turbines are not designed to endure many emergency shut downs when there is no electricity supply. For this reason, the turbines were manually shut down for extended periods during February 2006.

Solar

The research and demonstration for the solar dish stirling system has confirmed that the dish is not yet a commercially viable option. Improvements in technology will be monitored. Due to damage sustained in 2004, the engine had to be sent to Sweden for repairs. It has been recommended that the system be moved to an academic institute for skills development.

Atmospheric chemistry

Research concentrated on monitoring the environmental impact of atmospheric deposition. An extensive passive sampling network has been established to measure monthly sulphur dioxide, nitrogen oxides and ozone concentrations across the north-eastern regions of the country.

6.2 Demonstration

Eskom’s strategic planning takes into account research and development relating to the identification of demonstration plants.

Wind

Solar

Concentrating solar thermal plant

Previous environmental and technical feasibility studies have identified the Upington area in Northern Cape as a viable site for establishing a concentrating solar thermal power plant. In addition, Upington has one of the highest solar resource values in the world.

Eskom will proceed with the next engineering phase of the project. This phase will concentrate on risk reduction efforts and updating the business case for the proposed pilot plant. Discussions with technology partners have been initiated and a draft project plan completed.

Ocean energy
Eskom is investigating the feasibility of ocean energy as a future primary energy source. Current research is monitoring and evaluating various international initiatives. Once these studies have been completed, Eskom will assess the feasibility of different technologies for applicability under South African conditions.

Fuel cell

Eskom and the University of the Western Cape have collaborated on fuel cell research for the past three years. This research was mainly for the development of skills in this field. The primary objective of the project is to develop potentially commercial components for direct methanol fuel cells. A variety of commercial and internally produced proton conductive membranes, catalyst and membrane electrode assemblies were produced. Production methods were improved to gain maximum power output from the direct methanol fuel cell.

Nuclear

Eskom’s future involvement in PBMR (Pty) Limited will be as a shareholder, once the conditions precedent to the signed shareholders’ agreement between itself, British Nuclear Fuels Limited, and the Industrial Development Corporation of South Africa have been fulfilled. Eskom will be the host of the demonstration power plant at its nuclear site at Koeberg in the Western Cape, should the environmental impact assessment and the nuclear licensing processes be successful.

Eskom, through the Generation Division, is managing these processes, and is carrying out the associated assessments and reviews of PBMR design and safety analyses prior to submitting its reports and safety case to the relevant authorities.

Although some detail design still needs to be done, plant design has progressed to the point where long-lead materials and hardware have been ordered for the core structures and the core barrel. The supply contract for the main helium circuit pressure boundary was placed in December 2005 and that for the turbo-machinery is expected to be placed in the second half of 2006.

Orders for two test facilities to perform heat transfer tests, at high-pressure and high-temperature, to verify and validate thermo-hydraulic calculations and analyses, were placed in late 2005.

A contract for a helium test facility was placed in November 2004. This facility will enable tests of the critical components of the reactivity control system, reserve shutdown system and the fuel handling system, such as valves and measuring equipment, in helium at operating conditions. Final completion of commissioning of the facility at Pelindaba is planned for the second half of 2006.

Commercialisation of the technology and the launch of production units will follow in approximately 2013 once the technology has been proven on the demonstration power plant. Key work activities undertaken during the review period were:

progressing the design of the demonstration and pilot plants which, in the case of the former, resulted in securing the basic design baseline in late 2005
the development of the safety analysis report for the demonstration plant, which, when completed, will be submitted to Eskom for review and acceptance, prior to the issue of the documents to the National Nuclear Regulator
support to the environmental impact assessments for both the demonstration and pilot plants

The PBMR project is one of the most technologically advanced capital investment projects undertaken in South Africa since 1994. The successful deployment of this leading technology has the potential to make a significant contribution to local and international energy supply. In addition, it will contribute to the transformation of South Africa’s current resource-based economy to a more knowledge-based economy.

Environmental impact assessments have been conducted for the project, both for the demonstration power and pilot fuel plant. As far as the demonstration plant was concerned, the original design by PBMR was for a 302MW(t) PBMR plant. An environmental impact assessment for this plant commenced in 1999 when Eskom appointed a consortium of independent consultants. An extensive scoping and specialist study programme was undertaken, including comprehensive public participation through numerous interactions (focus group meetings, open days and public meetings), with periods for comment being provided during the scoping and environmental impact assessment phases. This culminated in the submission of the final environmental impact report to the Department of Environmental Affairs and Tourism (DEAT) in October 2002. The evaluation of the final report by DEAT and an International Review Panel appointed by DEAT was undertaken, leading to the issuing of a positive record of decision by the department’s Director-General (DG) in June 2003.

Appeals against the record of decision were submitted to the DEAT minister during July and August 2003. An application was brought before the Cape High Court on behalf of Earthlife Africa (Cape Town) in September 2003 to have the record of decision reviewed and set aside. The court judgement was handed down in January 2005. In this judgement the Cape High Court ruled in favour of the applicant, set aside the record of decision, and required the DEAT “to afford the applicant and other interested parties an opportunity of addressing further written submissions to him along the lines as set out in this judgment and within such period as he may determine and to consider such submissions before making a decision anew on the second respondent’s application.”

Since the completion of this environmental impact assessments, the decision was taken by PBMR to increase the power output of the plant from 302MW(t) to 400MW(t). This change in output requires that aspects of the assessment and public participation process be repeated, but for the sake of prudence, the parties agreed that a reapplication would be made and the assessment re-run. However, much of the information generated during the previous assessment and recorded in the resultant environmental impact report is still valid in the context of the 400MW(t) demonstration plant.

The new application for this project was submitted in August 2005. During the scoping phase of the technical aspects of the 302MW(t) and 400MW(t) plant were compared. The existing specialist studies were evaluated for completeness in view of changed input data, and the relevant impacts will be reassessed during the environmental impact assessment phase. During the reporting period, the final scoping report was issued for public and authority review and the plan of study for the environmental impact assessment submitted for approval. It is expected that risk will be completed during 2006.

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