The government has revealed plans to develop and pilot a coal bed methane (CBM) fueled power plant. Ministry of Mineral Resources, Green Technology and Energy Security said that the project was undergoing procurement.
Following approval of two companies, Sekaname and Tlou Energy as preferred bidders for the project by the Public Procurement Disposal Asset Disposal Board (PPADB), negotiations with the two companies were due to start in earnest.
“As per the PPDB Act, the negotiations outcomes will go through an approval process by PPADB prior to awarding of the tender,” said the ministry in a statement.
Coal bed methane fueled power plant
According to Tlou, a proposal submission was for the development of CBM-fired power plants up to a maximum of 100MW. It outlined a staged development starting with up to 10MW of power generation to facilitate the success of the downstream project by requiring relatively minimal upfront capital expenditure, thus reducing risk. The company said based on the electricity price guide provided by the government in Tlou’s tender of about US $0.12 per kWh, a 10MW project could generate gross revenue of about US$10 million per year.
“The effort put in by our team over recent years has been phenomenal and this result makes it all worthwhile. The company will now progress with additional work on the ground to deliver a gas‐to‐power solution that can bring significant benefits to the country and to our shareholders,” said Tlou managing director, Tony Gilby
The project is government’s initiative geared towards facilitating development of gas industry in Botswana. Coal bed methane is a clean energy source capable of earning the country carbon credits and positively improve the country’s energy mix,
Botswana has a significant energy shortage and generally relies on imported power and diesel generation to fulfill its power requirements.