National Energy Regulator contravening own rules, says expert

Although the National Energy Regulator of South Africa (Nersa) granted Turkey’s Karpowership three licences to generate power on floating gas ships, experts have said the gas-to-power project was a disaster as SA’s energy supply crisis will grow in the next 20 years.

Energy expert Clyde Mallinson said Nersa’s decision to grant Karpowership a licence was a contravention of its own
rules.

“Nersa seems to have made a mistake because previously, if you wanted to get a generation licence, you had to have all your documents in place,” he said.

“Karpowership hasn’t got their environmental approval yet so they shouldn’t have even been allowed to apply with Nersa.

“Nersa is going to have to scramble for an excuse as to why they even accepted the application, let alone how they granted the licence.”

Mallinson said even though Nersa had granted Karpowership SA a license, it would still need further approvals before the ships at the three ports could be fully operational and connected to the grid.

“I think pressure has been exerted on Nersa to make exceptions to the laws and say we’re going to grant you a licence, but you do realise that you need to get your environmental licence,” Mallinson said.

“Karpower can then go to the department and say Nersa gave them the licence, so the department is holding them back. The whole thing has been done in a back-to-front way.”

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Nersa confirmed in a statement that it had approved seven generation licence applications under its Risk Mitigation Independent Power Producer Procurement Programme, including three generation licences for the Karpowership SA projects in Richards Bay, Saldanha Bay and Coega.

The South African energy regulator also approved generating licences for the four other energy producers in its programme, even after the applications were refused environmental approval by the department of forestry, fisheries and the environment in June.

Meanwhile, Karpowership has been under fire since the government granted it the biggest share of a 2 000-megawatt emergency power tender to provide the cheapest and quickest option for electricity in March.

Several environmental groups have raised concern about the Turkey-based Karpowership plants, which required fuel to convert liquefied natural gas into electricity, while they also had no fuel supply agreement in place, no port regulation or a power purchase agreement from Eskom.

“Earlier in September, the high court agreed to postpone an appeal against the emergency tender brought by DNG Energy,” Mallinson added.

He also said the way the whole project had been structured was going to cost consumers more than R8 billion more a year for the next 20 years, even though there were cheaper solutions in the country.

Environmental NGO Green Connection said it was disappointed with Nersa’s inexplicable decision to grant authorisation for this destructive and costly project and surprised by how Nersa was assessing Karpower’s right for future generations, as it had no environmental authorisation.

It also said, according to Section 24 of the constitution, everyone had the right to an environment which was not harmful to their health and wellbeing and if the project continued with fossil fuels, they would be infringing on the rights of citizens.

Strategic lead for Green Connection, Liz McDaid, said Karpowership had not done any studies to show the impact on the marine environment.

“The continued utilisation of gas as a transition fuel as proposed by the oil and gas industry, as well as by the department of minerals and energy, is incompatible with climate stability and the goal of rapid decarbonisation that is required,” said McDaid.