Sunday, January 16

Karpowership SA licensing process ‘fatally flawed’ – lobby group

Environmental lobby group The Green Connection has on record opposing floating power plants as a power generation solution, and has now told South Africa’s National Energy Regulator (Nersa) that the electricity generation licensing process has “fatal flaws” during his oral presentation at public hearings on Thursday.

The Green Connection made these comments regarding Karpowership SA’s electricity generation application, adding that the floating power plant has a potentially devastating impact on the marine environment, as well as the livelihoods of local coastal communities. .


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In March, Minister for Mineral Resources and Energy, Gwede Mantashe, announced that eight preferred bidders were selected for the Risk Mitigation Independent Power Producer Procurement Program (RMIPPPP) to reduce the country’s dependence on expensive peaking plants and fill the short-term electricity supply gap. These proposals included three gas-to-power “powerhouse” projects to be located in Saldanha Bay Western Cape, Ngqura Eastern Cape and Richard’s Bay in KwaZulu-Natal.

The strategic leader of the environmental justice organization, Liziwe McDaid, said: “Our presentation highlights that the information was written in the application process and is therefore incomplete. This is disturbing. Why the secret? Where is the transparency? What do these newsrooms hide? ”

According to The Green Connection, the implications of Eskom having to sign a long-term (20-year) Power Purchase Agreement (PPA), along with the implications of Nersa granting a long-term generation license are two of the main conflicting points with the proposal of Karpowership SA.

“Our concern is that South Africans could be shocked and end up paying even higher electricity prices.

“The proposed contract with Karpowership SA is particularly alarming, as it could supposedly last two decades. Twenty years can hardly be seen as an ’emergency’ energy solution ”.

Public hearings on Karpowership generation license applications begin this week
The environment department rejects the authorization of the Karpowership plan

Section 10 of the National Energy Regulation Law (Nersa) stipulates that each decision of the energy regulator must be made within a procedurally fair process in which affected persons have the opportunity to present their views and present facts and evidence. relevant to Nersa. The Green Connection cited this in their statement.

McDaid argues that wording in the information submitted in the application process illegally restricts and disrupts the ability of interested and affected parties (I & AP) to analyze aspects of the application and obtain expert opinions.

She says this becomes an obstacle for concerned citizens who want to present their views to Nersa, based on facts and information relevant to the generation license application.

The Green Connection says its submission includes an extensive list of critical issues that have been drafted, demonstrating procedural injustice.

This includes a summary of the PPA and any version of the PPA. The details of the contractual agreements with Karpowership SA and its financial information, including projections regarding the proposed commitment, were also drawn up.

Read: Karpowership remains ‘fully committed’ to South African projects

McDaid also warns that given the risk of longer contracts for Eskom, especially when electricity is generated by burning fossil fuels, the electricity tariff will be almost three times higher (1.69 R / kWh) with Karpowership SA.

This is compared to the most recent solar and wind projects contracted during the last renewable energy bid window (0.62 R / kWh) by the power company. She says this low rate per kilowatt represents the benchmark for lower-cost new electricity generating capacity.

“While renewables offer largely predictable rates, on the other hand, fuel-based projects transfer risk to Eskom. This is because fuel is treated as a ‘transfer’ cost, which means Eskom is potentially exposed to both fluctuating fuel prices and the rand-dollar exchange rate, ”McDaid said.

“This means that if the price of fuel goes up, Eskom and the consumer pay more. The electricity generation landscape is likely to change significantly in the next 20 years, and a two-decade lockdown represents a significant risk to Eskom and the country’s economy. ”

Palesa Mofokeng is a Moneyweb intern.

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