The government has revoked its approval for Turkey’s Karpowership to provide emergency power in SA without the required environmental permits, the department of environment, forestry and fisheries (DEFF) said on Tuesday.
Though the department gave a directive to the company to produce emergency power, it was under the impression that it was to support SA’s health-care system in the Covid-19 crisis, only to find out later the permission was instead to aid the company’s intended participation in the government emergency power procurement tender.
The department said it had now withdrawn the directive.
Karpowership is part of Turkey’s Karadeniz Energy Group and the first company to globally build and contract power ships. These are vessels equipped with fuel and their own grid substations on board that can simply plug into existing infrastructure onshore and feed power into grids.
Under the National Environmental Management Act, a section 30A directive, such as that granted to Karpowership gives permission to carry out an activity without obtaining environmental authorisation to prevent or contain an emergency situation or the effects of one.
"When the company had initially submitted (its) request it had indicated that the country’s electricity supply was under threat because of the increased pressure on the health-care system as a result of the Covid-19 outbreak. The motivation for the request was to ensure an uninterrupted supply of energy to the health-care sector, something which Eskom was unable to guarantee," the department said.
Verbal authorisation was given on June 26 and the directive was confirmed in writing on July 6.
The department said it emerged later that Karpowership had applied for the verbal directive in advance in preparation for possible implementation of the government’s integrated resources plan and in the event of the company being selected as an emergency power producer as part of the tender process that was formally launched by the department of mineral resources & energy and energy (DMRE) at the weekend.
The DEFF said this information was not disclosed to it, and the authorisation was withdrawn. "The company has since accepted the notice, and indicated that it does not intend to challenge the department’s decision to revoke the verbal directive," the department said.
Karpowership global sales director Patrick O’Driscoll said Karpowership SA had participated in all government procurement processes to date in an open and transparent manner, and it would continue to do so. By Tuesday night the company had not received any formal notification about the directive being revoked by the DEFF.
"We have, however, noted a number of inaccuracies that have arisen in some media reports on the matter," said O’Driscoll. "Karpowership SA will issue a response in the coming days."
Even as load-shedding resumes in earnest, some SA energy experts have, however, expressed concern that power ships could prove to be an expensive solution to the country’s power problems.
While Karpowership has previously told Business Day it could produce power at R1.70 a kilowatt-hour, experts continue to express scepticism about the true cost-competitiveness of the offering.
O’Driscoll said that the company looked forward to submitting its solution in response to the DMRE’s tender for emergency power.
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