Two organisations are challenging the national energy regulator in court over the electricity generation licences it has granted to Turkish energy giant Karpowership to provide SA with power through a controversial 20-year deal.
The two groups said on Thursday they were applying for the Nersa licences — which if activated would result in the delivery of electricity to the Eskom grid from gas turbines installed on a fleet of floating powerships in Richards Bay, Saldanha Bay and the Port of Ngqura — to be reviewed and set aside.
Green Connection and The Organisation Undoing Tax Abuse (Outa) filed separate applications in the North Gauteng High Court in Pretoria this week.
Green Connection community outreach coordinator Neville van Rooy said it had objected on the basis that Nersa had granted the licences though the department of forestry fisheries and the environment had refused to authorise the Karpowership projects
He said Green Connection, which includes the East Cape Environmental Network, was concerned about the negative effect of the projects on the environment, climate change and the economy.
“We’re concerned about the impact of Karpowership being granted licences to operate over a 20-year period to fill a short-term electricity supply gap.
“It does not make sense for Nersa to grant these licences to the Karpowership companies in these circumstances, and in doing so Nersa has put the horse before the cart.”
He said Nersa’s decision was not in the interest of the people, electricity users in general and in particular small-scale fishing communities whose livelihoods could be adversely affected by the negative environmental impacts of the Karpowerships.
“Furthermore, Nersa has granted these licences on the back of public participation processes where critical information was redacted from the documents made publicly available, including the terms of any power purchase agreement with Eskom.
“Karpowerships are supposed to be an emergency electricity generation solution, which means that they should dispatch electricity only when there is a shortage.
“This is the only time it makes any economic sense — unless obliged by specific power purchase agreement conditions.
“However, we do not know what these conditions are since this information has been redacted.
“So, are the human, environmental and economic costs of the Karpowerships justifiable since it is only cost-effective to use them in an emergency?
“The Green Connection believes that the Karpowerships are utterly unsuitable to meet the country’s dire short-term electricity generation needs.”
Van Rooy said it was unclear why the Nersa electricity generation licences were rushed through despite environmental refusal, controversy related to an initial emergency bid that waived the need for Karpowership to do an environmental impact assessment and questions about its suitability and sustainability.
“The Green Connection has long wondered why the government seems consistently willing to bend over backward to progress these deals and hopes the court case will reveal its rationale.
“In the long-term, we believe that Karpowership is an unsustainable and inefficient solution to our energy problems.
“The reality is that after the company has bled SA dry for 20 years, these floating kettles will not even belong to the country, but instead will remain the property of the Karpowership companies and will leave at the end of the contract period.
“Additionally, at a time when we should be taking steps to address the climate change crisis, why is the department of mineral resources & energy and energy so keen to lock SA into a 20-year project that will emit significant emissions of methane — a greenhouse gas with more climate warming potential than carbon dioxide?”
Organisation Undoing Tax Abuse accountability division executive director advocate Stefanie Fick said Outa’s application had been submitted in terms of the Promotion of Administrative Justice Act.
“Nersa has displayed a cavalier attitude towards statutory compliance and public concerns throughout its decision-making process to award generation licences to Karpowership.
“By doing so, it has failed to properly exercise its mandate, in terms of the Electricity Regulation Act, and to fulfil its oversight functions ... to ensure that the interests of electricity suppliers are balanced with the interests of customers, the public and the SA economy.
“The decisions to award the licences to Karpowership... were irrational and unreasonable.”
She said the normal public procurement processes for new generation capacity were now anyway overtaking the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPP), the emergency process declared by energy minister Gwede Mantashe in March 2021.
Karpowership spokesperson Nkululeko Dhlamini said the company was confident the bid to overturn the Nersa licences would not be successful.
“However, the delays it is causing to the RMIPPPP programme are unconscionable.”
Nersa spokesperson Poppie Mahlangu did not respond directly to The Herald’s questions but, referring particularly to the Outa application, said this had not yet been received.
“Once Nersa receives [this] application, it will study it and advise whether it will be opposing it.”
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