Environment minister allows Karpowership SA to push ahead with floating gas power plants in Richards Bay and Saldanha

  • Bloomberg reports that Karpowership SA will push ahead with bids to secure environmental approval to install two ship-mounted power plants in South Africa at Richards Bay and Saldanha ports.

After being refused environmental authorisation in 2021, Karpowership appealed to environmental Minister Barbara Creecy. The Minister decided to remit the matters back to the Department of Forestry, Fisheries (DFFE) so that various gaps and defects could be addressed by Karpowership. Karpowership subsequently submitted revised final Environmental Impact Assessment (EIA) reports in January 2023. However, in the 320MW gas power ship Saldanha application, Karpowership withdrew its final EIA report, and applied to the Minister for extension and condonation to submit a generic Environmental Management Programme. This application was refused by DFFE.

Creecy has now overturned this decision. She will allow Karpowership SA to pursue environmental approval at Saldanha on the west coast.

Creecy has also dismissed appeals from five environmental groups that sought to block the company from applying for the approval to install a 450MW floating gas power plant at the port of Richards Bay on the northeast coast, according to a ruling seen by Bloomberg.

Related news: The value in Karpowership SA deal is in gas supplied by ANC donor and benefactor, Shell South Africa

In March 2021 eight preferred bidders totalling 1845MW and a further 3 eligible bids from Scatec totalling 150MW were announced. The eleven projects awarded preferred bidder status outcome included three gas powership projects totalling 1220MW submitted by Turkish owned independent power producer Karpowership SA.

Karpowership SA’s third project, a 450MW floating gas power at the Port of Ngqura will be delayed over a disagreement with the national port operator over the location of the power ship.

Karpowership SA will still need to get final environmental approval, sign a power-purchase agreement with national power utility Eskom on all three projects. Eskom has also implemented new grid access rules which means that the Karpowership grid access rights will expire at the end of this month. Read more

Moreover, the original deadline of 31st July 2021 was set for independent power producers (IPP’s) appointed as preferred bidders, to reach financial close for their projects in South Africa’s Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP). It has since been extended multiple times. Only three Scatec projects, Kenhardt 1, 2 and 3, with a total capacity of 150MW, has managed to reach financial close – in July last year. The latest deadline for the remaining eight projects is also at the end of this month – 31 July 2023.

Author: Bryan Groenendaal

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