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IPSA has finalised the testing and commissioning of South Africa's first privately financed independent power plant, which is also South Africa's first independent gas-fired power station.

The Newcastle Cogeneration Power Plant has been constructed within a period of fourteen months of the start of construction. It is a producer of both steam and electricity with a nominal power capacity of 18 MW and the capability to deliver just under 1 million tonnes of steam per annum. It operates as a combined cycle gas turbine (CCGT) plant, again the first in South Africa, using two Siemens Tornado gas turbines with two Aalborg steam boilers capturing the waste heat and turning the super-heated steam into additional electricity from a steam turbine. The plant provides steam and electricity to three industrial companies on site including Karbochem, a South African synthetic rubber manufacturer, and a joint venture between SASOL and Air Liquide of France.

The equipment for Newcastle was originally installed in a facility designed to supply a paper plant in Bury, East Lancashire in the United Kingdom. IPSA has successfully acquired, dismantled, shipped to South Africa and constructed it and is now commissioning it in Newcastle. This complex process was supervised by IPSA's own project team and it is our proposed model for future similar energy efficient power plants in South Africa.

Historically, electricity in South Africa has been produced in conventional coal-fired power stations. These typically have a 35 per cent. thermal efficiency, which means that two thirds of the energy burned in those plants is wasted and vented back into the atmosphere as yet another contribution to global warming. IPSA's Newcastle plant operating as a CCGT has a thermal efficiency of nearly 56 per cent., which means that it produces around 40 per cent. less CO2 than a conventional coal-fired plant for every kilowatt hour of electricity it generates. This is one of the lowest emissions of CO2 of any thermal power plant in South Africa. For this reason the management of IPSA believes that the Newcastle plant will be eligible for carbon credits under the United Nations Clean Development Mechanism under the Kyoto Protocol. A project design document is being drafted (July 2007) for submission to the UNFCCC executive board. In view of the high baseline for thermal power generation in South Africa from low efficiency coal-fired power plants which are heavy producers of CO2, the directors of IPSA believe that Newcastle Cogeneration could qualify for a material level of Carbon Emission Reductions ("CERs") which would be an important source of revenue once the plant enters commercial production.

The second phase of the project is the construction of a power plant of approximately 25 MWe and 110tph of steam. Negotiations are already underway to increase the capacity installed on the site to meet both regional and national power needs. The current plan is for the installation of 50 MWe of new capacity at Newcastle, which is estimated to require a capital investment of US $25 million.