South Africa’s plan to stop blackouts with floating power stations draws fire

 ·2 Feb 2023

The Organisation Undoing Tax Abuse (Outa) plans to take the National Energy Regulator of South Africa (Nersa) to court over licences granted to the Turkish power company Karpowership.

As load shedding in the country hits new records, immense pressure has been placed on the government to take urgent action.

Talk regarding renewables and alternative generation sources is plentiful, with the floating gas-fired plants from Karpowership rising to the surface – a plan backed by energy minister Gwede Mantashe.

However, according to Outa, there is a suspicious level of secrecy around the financial implications of the Karpowership deal, which is estimated to cost more than R200 billion for a 20-year contract.

The organisation has urged for more transparency and accountability regarding government long-term contracts as it is in the public interest to see the full record of transactional history and the methodology behind pricing structures.

On 23 January, Outa filed an application to compel energy regulator Nersa to provide “a complete, unredacted record” of the regulator’s decisions to award generation licences to Karpowership to operate power ships in the ports of Saldanha Bay, Coega and Richards Bay.

This move by Outa follows years of protest and probing against the deal and a primary application filed last year in April that called on the court to review and set aside Nersa’s decisions to award generation licences.

Both Nersa and Karpowership oppose the application.

When outlining what the group suspects the government is hiding, Outa said: “Nersa and Karpowership have unequivocally indicated that they will not provide an unredacted record to Outa, or even identify the information being withheld.”

“There is also no explanation for how providing the information would prejudice Karpowership,” said Outa.

“The record provided is voluminous, with neither an index nor a list of the sections which were redacted. However, the financial information from the Karpowership application is missing from the documents provided,” stated the civil organisation.

Outa has also rejected a recent statement by the energy regulator that said power from the Karpowership would cost R2.80/kWh. The group argues that it would actually cost closer to R5/kW – roughly three times the cost of alternative generation solutions.

The Karpowership deal has also faced backlash from environmental groups that argue that the presence of the ships along South Africa’s coastline would have disastrous knock-on effects on the sea quality and its ecosystem.

Karpowership has resubmitted an appeal to the environmental department and intends to proceed with it.

The company currently provides electricity to various countries in Africa and beyond, primarily through its ships powered by liquefied natural gas.

Read: Big risks over state of disaster in South Africa

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