The debacle surrounding South Africa\u2019s bid to secure emergency power supplies has highlighted a dysfunctional energy policy that\u2019s subjecting Africa\u2019s most-industrialized nation to intermittent blackouts.<\/p>\n
Since March, the energy department has identified companies it wants to provide almost 2,000 megawatts of electricity to the grid by August next year.<\/p>\n
But a losing bidder has alleged that the selection process was corrupt and sought to reverse it in court, environmental activists have raised objections and lawyers are at odds over whether ship-based power plants can be moored in the nation\u2019s ports.<\/p>\n
Delays to the projects, which now appear to be almost inevitable, will extend debilitating energy shortages that president Cyril Ramaphosa said are a \u201cmassive risk\u201d for the economy, and further damage South Africa\u2019s reputation as a feasible place to do business.<\/p>\n
In addition to Turkey\u2019s Karpowership, which is in line to supply 1,220 megawatts of power, some of the world\u2019s leading energy companies – TotalEnergies, Electricite de France, Scatec ASA and ACWA Power – are involved in the bids.<\/p>\n
\u201cWhat does this do to other potential bidders? The answer is it alienates them,\u201d said Martin Kingston, vice president of the country\u2019s biggest business group,\u00a0Business Unity South Africa. \u201cThey need to believe there\u2019s a transparent process.\u201d<\/p>\n
South Africa has been dogged by electricity outages – known locally as load shedding – since 2005, with the near-monopoly state power utility Eskom unable to meet demand from its old and poorly maintained plants.<\/p>\n
Its plans to build new capacity have been riven by corruption, cost overruns and government vacillation over what form of energy to use and the role private producers should play.<\/p>\n
Ramaphosa took a major step toward alleviating the crisis last week, announcing that companies will be allowed to build their own power plants with\u00a0up to<\/span>\u00a0100 megawatts of generating capacity without requiring a license.<\/p>\n While the decision was taken in the face of opposition from Gwede Mantashe, his energy minister, and will effectively break Eskom\u2019s monopoly, it won\u2019t provide immediate relief.<\/p>\n The emergency power projects and own-use generation needs \u201cto come through in order to arrest load shedding within the next year or two,\u201d said Jevon Martin, head of energy and decarbonization at Sibanye-Stillwater, the country\u2019s biggest precious-metals miner and a major power consumer.<\/p>\n \u201cEskom is not going to turn around their generation performance overnight.\u201d<\/p>\n A High Court case filed by losing bidder\u00a0DNG Energy\u00a0in April that\u2019s likely to be heard next month poses the biggest threat to the short-term projects.<\/p>\n DNG\u2019s executive director Aldworth Mbalati has alleged that he was approached by a relative and a business associate of Mantashe\u2019s and a meeting was brokered with government officials who asked for a bribe.<\/p>\n DNG is seeking to either be given Karpowership\u2019s contract, or alternatively have all the winners interdicted from completing their deals with the government.<\/p>\n Mantashe, energy department officials and Karpowership have denied wrongdoing and the other winners have said DNG threatens South Africa\u2019s energy security.<\/p>\n \u201cAn interim interdict would cause catastrophic knock-on consequences for South Africa\u2019s ability to increase its generation capacity,\u201d Oya Energy, a winning bidder, said in its court documents.<\/p>\n \u201cThis will translate into even further strain on an already strained national grid.\u201d<\/p>\n
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