Karpowership gets another lifeline for gas-fired port facility

Environment Minister Barbara Creecy dismissed appeals from five environmental groups looking to block Karpowership SA from applying for approval to install a 450 megawatt gas-fired facility at the port of Richards Bay on the northeast coast of KwaZulu-Natal.

On Tuesday, Creecy gave the Turkish company another lifeline to proceed with its application to provide power to South Africa.

This is the latest development in a drawn-out environmental approval process that has faced many delays and rejected appeals over more than three years. 

Karpowership seeks to supply 1 220MW through South Africa’s three ports of Coega, Saldanha Bay and Richards Bay. But its environmental application to moor a ship-mounted power plant at the port of Saldanha Bay was suspended after allegations that the views of small-scale fisheries were misrepresented. 

The department also found that Karpowership had limited assessments when it came to determining the damage of underwater noise and the impact on fish and livelihoods.

The company has offered to cover the shortfall in generation and end load-shedding but the terms of the contract have been brought into question. 

The department of mineral resources and energy selected Karpowership as the preferred bidder for the emergency power procurement programme over the next 20 years in a deal worth more than R218 billion at the time. 

These terms are being renegotiated by minister of electricity Kgosientsho Ramokgopa for a short-term contract with the company to five years.

To keep the grid from collapsing, Eskom has been burning a lot of diesel, which Ramokgopa acknowledged was costly. He added that the country was looking at emergency procurement but they were also looking at options which could provide electricity in the long term.

Some of the options include importing power from neighbouring countries, Ramokgopa said, with electricity available within six to 12 months after agreements were approved.

In April 2022, lobby group Outa took legal action against the National Energy Regulator of South Africa (Nersa) for granting three licences it argued were not in South Africa’s interest.

DA shadow minister of mineral resources and energy, Kevin Mileham, said the party was going to contest the Karpowership contracts should the minister fail to get an agreement on five years.

“The Karpowerships contracts should only be five years and only be renewed depending on need. The DA has put the ANC government on notice that we are ready and prepared to take action if any decision is taken to sign a 20-year contract with Karpowership,” he said.

Karpowership will still need to get final environmental approval, sign a power-purchase agreement with national power utility and renew its right to access the national grid, which expires at the end of this month.

In a response, Karpowership said it welcomed the lifeline from the minister: “The minister’s decision is a significant boost towards the finalisation of Karpowership’s projects in South Africa,” it said. 

Eskom’s low energy availability at power stations has affected its ability to generate enough capacity to provide for usage during peak hours in the country, and improving the energy availability is one of the key pillars of the just energy plan.

Mandisa Nyathi is a climate reporting fellow, funded by the Open Society Foundation for South Africa