Energy minister Kgosientsho Ramokgopa says the contract between the government and Karpowership is “dead in the water”, ending the deal that polarised society.
“Karpowership is dead in the water ... it hasn’t met the deadlines. It is something that is buried and behind us,” he told the media on Monday.
Powerships are mobile floating power plants typically deployed after natural disasters, which use liquefied natural gas (LNG) or another fuel source to generate electricity. They dock at ports and transmit the electricity to the mainland via cables.
The government granted the company access to operate at three ports for 20 years in a contract believed to be worth billions of rand. However, environmental groups have been legally challenging the agreement between the state and Karpowership.
In June, The Green Connection scored a victory in the fight to lay bare closed discussions over Karpowership deals after the North Gauteng High Court ordered the government and its entities to hand over confidential documentation to the NGO in its bid to set aside the contracts.
The court told the National Energy Regulator of SA (Nersa), the government and Eskom to hand certain documents to the organisation.
The documents include the draft power agreements to be entered into between Karpowership and Eskom. They also speak to the mechanism for dealing with fluctuations in international LNG prices and expert reports Nersa considered in arriving at its decisions to approve three electricity generation licences to the Turkish firm.
The three licences for Karpowership to operate generation facilities are at the Port of Saldanha Bay, the Port of Ngqura and the Port of Richards Bay.
Some of the information Nersa will also have to hand over is minutes of meetings at which Karpowership generation applications were discussed and approved.
Karpowership SA is the local holding company for the Turkish company Karadeniz Holdings, which operates powerships worldwide.
Higher electricity prices
Liziwe McDaid from The Green Connection said the organisation welcomed the announcement by Ramokgopa that the Karpowership deal is no longer proceeding. The NGO had long argued that signing the proposed 20-year “emergency” contract would have caused even higher electricity prices than those currently proposed by Eskom.
“Imagine the impact, especially since South Africans have already endured many above-inflation price hikes over the past decade. And we cannot ignore the lessons from other African countries that bought into Karpowerships but had their electricity cut because they couldn’t afford to pay,” McDaid said.
“However, while we are pleased the deal is off, there are serious questions that remain. Why, if the Karpowership deal is truly off the table, is the government still opposing The Green Connection and Outa’s court cases? Why are scarce state resources still being wasted on this? And why did the new minister of environment approve the Richards Bay Karpowership environmental impact assessment when the project isn’t moving forward?”
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