Eskom Develops UCG Technology Project

Chris Gross Mark Van der Riet

21st June 2007 Houston, USA

SOUTH AFRICAN COAL

Eskom Generated Electricity

2006 : 221216 GWh Net
Coal 93.05%

Gas turbine 0.04% Nuclear 5.10%

Hydro 0.52%

Pumped storage 1.30%

om sk E

G UC

ESKOM UNDERGROUND COAL GASIFICATION PILOT PROJECT

Rationale for Eskoms stakeholding

Opens an opportunity for more rapid deployment of new capacity Showcases a cleaner coal technology plant Introduces potential CDM credits Allows more efficienct utilisation of coal resources Creates a potential for a new petrochemical entity Extends RSA coal reserves, by opening up presently unminable resources, which have a broader geographic availability that at present.

Existing plant age

Eskom's Installed profile
Dashed line = Approved peak demand + 20% Reserve Margin

55 45000

60

65

70

75

80

85

90

95

00

Now 05

10

15

20

25

30

35

40

40000

Grootvlei
Komati

Majuba 4-6

35000

Camden Cahora Bassa Zesco

Majuba 1-3 30000 Megawatt Installed Kendal

Palmiet

25000

Matimba Lethabo

20000

Tutuka Koeberg

15000
Vanderkloof Port Rex Acacia

Drakensberg

Duvha Matla Arnot Kriel

HF Verwoerd

10000

5000

Grootvlei Camden
Ingagane Highveld Salt River Taaibos Wilge

Komati

0 55 60 65

Hendrina 80 85 90 95 Year 00 05 10 15 20 25 30 35 40

70

75

Most stations at mid life refurbishment point.

Long-term energy forecast

Capacity outlook 2005 to 2024

Build base-load plants Build open cycle gas turbine plants (peaking) Build pumped storage plants (peaking) Return to service (mothballed plants) Existing system (Eskom and non-Eskom) Total imports (firm capacity from Cahora Bassa)

Maximum demand Based on a 6% GDP growth, a high 4,4% growth scenario in demand for electricity before demand-side management Total capacity required to maintain 15% net reserve margin on moderate forecast Forecast moderate national peak demand before demand side management Moderate peak demand after demand-side management

Rationale for Eskoms stakeholding

Opens an opportunity for more rapid deployment of new capacity Showcases a cleaner coal technology plant Introduces potential CDM credits Allows more efficienct utilisation of coal resources Creates a potential for a new petrochemical entity Extends RSA coal reserves, by opening up presently unminable resources, which have a broader geographic availability that at present.

UCG-IGCC Comparative Emissions

1000 900 800 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Conv PF CO2 Super PF NOx Conv IGCC UCG-IGCC Nat Gas CC SOx Particulates

700 600 500 400 300 200 100 0

Ref : Australian ACARP LCA study, Case Study B20, June 2002

The only cleaner coal-based technology is the proposed ultra-supercritical PF

NOx/SOx/Particulates kg/MWh net

CO2 kg/MWh net

Rationale for Eskoms stakeholding

Opens an opportunity for more rapid deployment of new capacity Showcases a cleaner coal technology plant Introduces potential CDM credits Allows more efficienct utilisation of coal resources Creates a potential for a new petrochemical entity Extends RSA coal reserves, by opening up presently unminable resources, which have a broader geographic availability that at present.

Resource Utilisation Efficiency

33% of coal resource utilised Thermal Efficiency
33

Mining Efficiency
66

0%

New Ultra-supercritical or Conventional IGCC with Longwall U/G Mine 36% of coal resource utilised

100%

Thermal Efficiency
36

Chemical Efficiency
71

Mining Efficiency
95

0%
Thermal Efficiency

UCG-IGCC 0.5% of resource utilised

Extraction Efficiency

100%

13

25

50

0%

CCGT with CBM

100%

Rationale for Eskoms stakeholding

Opens an opportunity for more rapid deployment of new capacity Showcases a cleaner coal technology plant Introduces potential CDM credits Allows more efficienct utilisation of coal resources Creates a potential for a new petrochemical entity Extends RSA coal reserves, by opening up presently unminable resources, which have a broader geographic availability that at present.

Rationale for Eskoms stakeholding

Opens an opportunity for more rapid deployment of new capacity Showcases a cleaner coal technology plant Introduces potential CDM credits Allows more efficienct utilisation of coal resources Creates a potential for a new petrochemical entity Extends RSA coal reserves, by opening up presently unminable resources, which have a broader geographic availability than at present.

Eskoms UCG Routemap

UCG technology potential noted - April 2001 Ergo Exergy Technologies Inc. (Canada) contracted in Scoping study - Nov 2002, highlighted potential at Majuba colliery Pre-feasibility study - Dec 2003, confirmed Majuba potential Detailed site characterisation study - July 2005, confirmed the potential 20th January 2007 Eskom commissioned a 3000 Nm3/h pilot plant on Majuba coalfield 31st May 2007 first electricity generated from UCG gas at Majuba
Events since Zeus UCG Workshop 2006

Eskom UCG Research Site

Outer Water Sampling Zone Research Zone

Inner Water Sampling Zone

Production Area

Directional Hole

Majuba UCG flare 20 Jan 2007

Majuba UCG electricity 31 May 2007

The first electricity from Majuba UCG gas was generated at 15:00 on 31st May 2007. This marks the first new electricity generation from UCG gas since 1958, in Angren, Uzbekistan. The 100 kWe diesel engine generator has been converted to run on a maximum of 80% UCG gas, with 20% diesel. The diesel is required to lubricate the engine internals.

100 kWe generator starting up on UCG gas

UCG Pilot Plant Challenges

Geological setting dolorites & schedule impact Insufficient geological & hydrogeological exploration data Unique products, due to unique coal and geological setting Equipment leadtimes Cost escalation & time creep Lengthly analytical service setup Surface plant technical difficulties and maintenance Energy efficiency (specifically diesel)

NOTE : The UCG process has remained robust throughout

Present UCG Activities

Accelerating process development Optimising the pilot plant operations Developing co-firing with coal into Majuba Power Station boilers Skills development & technology transfer Optimising, planning, detailed engineering & costing of the next phases Research into challenges : Dolorites & drilling problems Coal seam drying Well linkage Environmental impacts Heat & mass balances Materials

Dolorite Intrusions

ESKOM UNDERGROUND COAL GASIFICATION COMMERCIALISATION

Eskom UCG Development Path

Timescale

01/2007

05/2008

12/2008

12/2010

08/2011

Phase 1A-1 3,000 Nm3/h 6 MWth flare

Phase 1B 70,000 Nm3/h 28 MWe cofire

Phase 2 125,000 Nm3/h 25 MWe cofire

Phase 3 625,000 Nm3/h 250 MWe cofire

Phase 4 630,000 Nm3/h 350 MWe IGCC

RD&D
Comm

EIA

Engineering & Investment

Procurement Commercial 3,700,000 Nm3/h 2100 MWe IGCC

Construction

Co-firing & 350 MW UCG-CCGT

Compressor Plant
450 000 Nm3/h Air

Fuel Solution
Gas Treatment Plant & Flare
630,000 Nm3/h Gas

UCG Module
125,000 Nm3/h Gas

Majuba P/S

UCG Module
125,000 Nm3/h Gas

UCG Module
125,000 Nm3/h Gas

UCG Module
125,000 Nm3/h Gas

Final Gas Treatment - GT

630,000 Nm3/h Gas

Gas Compressors
2 x 315 000 Nm3/h Gas

UCG Module
125,000 Nm3/h Gas

Capacity Solution

350 MWe IGCC

Thank You & Acknowledgements

Eskom Resources & Strategy - ERID Eskom Generation - Primary Energy & Technology Majuba Power Station UCG Team EON Consulting Servies Ergo Exergy Inc. Specialist consultants