Durban - Energy and Mineral Resources Minister Gwede Mantashe and environmental groups are on a collision course over the Karpowership deal, with the environmental lobby planning to challenge the deal for the emergency procurement of some 2 000MW of electricity, warning that the ships would cause huge damage to the marine ecology and fishing.
They have also questioned the length of the contract and have called for any deal to be transparent and open to the public.
Last week the Transport Ministry said it had granted Türkiye’s Karpowership access to the three ports of Durban, Ngqura and Saldanha Bay for a period of 20 years in an effort to find solutions to the country’s power crisis.
Karpowership aims to generate power on its floating gas ships and distribute it to South Africa’s electricity grid.
The plan received a boost from President Cyril Ramaphosa last week after he told lawmakers the ships would help ease the prolonged power shortage countrywide.
On Thursday, the Transport Ministry said it had granted the application, which was approved by the minister on February 26, in consultation with the Transnet National Ports Authority. However, the Department of Forestry, Fisheries and the Environment and the National Energy Regulator of South Africa still have to provide approval.
At the weekend, Mantashe said the country had long allowed environmental groups to stifle development, but he was determined that the government would prevail.
Bobby Peek, the director of environmental organisation groundWork, said Karpowership would affect the country’s fiscus, and used the experience of Ghana as an example.
“Ghana’s power producer debt has resulted in the government having to pay R1.4 billion of that debt into the energy sector in Ghana, and that debt is as a result of bringing in Karpowership 10 years ago on a take-and-pay contract.
“When the energy system went into the positive they still had to pay Karpowership. They are presently considering raising $600 million (R11.5 billion)from the International Monetary Fund to take them out of a bankruptcy debate in Ghana.”
Peek said it made better financial sense to take the funds earmarked for the powerships deal and invest it in public-owned renewables such as household low-income energy renewable processes, or within municipalities by using solar power on old mine dumps.
“You can get solar power systems up and running quickly, probably even quicker if you put your mind to it than what Karpowership will be producing, and we would be in control of our own energy.
“If we create ‘Eskoms’ on our roofs we will save Eskom as an energy utility. We have to have complete transparency with these deals, and Karpowership and the government cannot have a deal without it being open to the public and Parliament.”
Greenpeace spokesperson Thandile Chinyavanhu described the decision to grant Karpowership access to the country’s ports, before it has even secured environmental authorisation, as shocking.
“The fact that this was decided on February 26 yet never publicly disclosed is ludicrous.
“The fossil fuel industry thrives off deception and secrecy, and in this instance they are using our power crisis and our desperation for access to energy to lock us into a project that will be bad for the economy.”
Energy experts have welcomed the decision to introduce Karpowerships, but have also called for transparency in whatever deal is made.
Energy expert Professor Wikus van Niekerk said the initiative was a serious solution to the country’s energy problems.
“We need significant generation, and one way is Karpower technology. The price of that solution depends on the international energy rate and the dollar exchange rate.”
Van Niekerk said the government should renegotiate the conditions of the agreement to a 10-year contract instead of over 20 years, as this made better financial sense.
Energy expert Lungile Mashele agreed that the powerships are required as a necessary alternative, adding that it was a pity that the process to acquire them had taken so long.
“Ultimately they should have been online more than a year ago, this would have at least saved us more than one stage of load shedding if we had had them. Once you have the powerships the prerogative is on the utility and on the country to procure their own permanent energy sources.
“The benefit of a powership is that you do not have the upfront capital costs, but you do have like any other fossil-fired plant, whether on shore or offshore, burning of fuel, whether coal or diesel in order to generate steam in order to turn turbines.
“That is the basic technology. The 20-year contract was negotiated primarily because they required the company to build port infrastructure and facilities that are not there.
“If you look at the ports of Saldanha, Durban and Richard’s Bay, they do not have facilities to land gas, to regasify and to process gas.
“In our country we are asking powerships to do everything, and naturally the price is going to be much higher and the whole point of them financing it over 20 years is they are going to be able to amortise this over a long period of time.
“The key benefit of Karpower is that in less than 30 seconds they can dispatch whatever is required on to the grid, therefore helping us avoid grid collapse ultimately.”