Ramaphosa’s ‘quick fix’ for load shedding has a major flaw

 ·16 May 2023

President Cyril Ramaphosa is pushing ahead with implementing Karpowerships as an emergency procurement plan – but the ships won’t be able to come online immediately and might take a year to become functional.

This is according to the CEO of Organisation Undoing Tax Abuse (OUTA), Wayne Duvenage, who spoke with 702’s John Perlman regarding the procurement plan and its issues.

The first point of contention is the current 20-year term of the present contract on the table, as Ramaphosa initially described the option as a temporary solution.

“Karpowership is only a viable solution if it entailed a short-term contract (five years maximum) to get us over the hump, as it were, and if the costs weighed up against the potential loss to the economy due to worsening load shedding,” said Duvenage.

He further noted that a 20-year contract would cost the country R200 billion. However, with the rise in costs and drop in rand value, it will more likely cost around R500 billion.

Setting aside whether or not South Africa can afford to pay for the ships, Duvenage said that the time it takes for them to come online is an issue – especially if this is an emergency procurement option.

“Remember, Karpowerships is not going to just come and dock and start providing electricity,” he said.

He added that these ships would take roughly a year before they started generating electricity and adding supply to the grid.

Responding to Perlman’s questions regarding the contract period, Karpowership SA said that a 20-year contract was not their choice and that they have ‘nothing against’ shorter contracts.

However, Duvenage added that at the cost of R500 billion for a 20-year contract, the set-up costs and margins to make a short contract viable for the power producer would likely render the price unaffordable for South Africa.

Additionally, Duvenage said that viability and environmental studies that not been completed, raising concerns as to why Ramaphosa supports such an option without “all the boxes being ticked”.

Duvenage plans on challenging this in court for the sake of transparency. He said South Africans should know how Nersa and Karpowership arrived at their decisions and the financial implications.

“We will continue to defend the public’s rights so that there is absolute transparency. This is a decision in the country’s best interests and not only in the interests of Karpowership SA and the government,” he said.

Whether or not Karpowerships will be a reality has been questioned over the course of the last few years.

The proposed power ships have faced major backlash from environmentalists as they would have dire consequences on marine life. This backlash ultimately led to multiple delays to Eskom’s plans to use gas-fired plants on ships.

One of the most notable developments, giving the ships a second chance, was made on 5 May, when the Department of Forestry, Fisheries and the Environment dismissed a complaint by a nonprofit against Karpowership’s plan to moor a similar plant at Saldanha on South Africa’s west coast – indicating a further push for the emergency power.

Read: South Africa’ unintentionally’ beats climate goals due to load shedding

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