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South Africa has taken emergency measures to break its energy crisis with a plan to lease mobile power plants or power docks in its ports.
But a $ 15 billion deal with the Turkish Karpowership for 20 years – one of the longest of its kind – has been criticized by critics for not being as expensive and environmentally friendly, and a competing energy supplier has complained that the tender was exchanged at the company. mesede.
The government of President Cyril Ramaphosa announced last month that Karpowership was the preferred bidder to obtain a contract to supply 1,200 megawatts or two-thirds of the emergency procurement with LNG power.
Pretoria launched an emergency recruitment in late 2019 after Eskom, a struggling state monopoly, was forced to impose the harshest power cuts to date, a legacy of former President Jacob Zuma and beyond.
“We believe the process followed was flawed, illegal and in some cases tainted,” said Aldworth Mbalati, CEO of gas supplier DNG Energy.
The Karpowership, which supplies eight countries in Lebanon, Indonesia and Africa, including Sudan, Ghana and Mozambique, has rejected allegations of inadequacy. “As a consortium of local and international investors, we have full confidence that South African courts will treat this appropriately,” the company said.
South Africa’s Department of Mineral Resources and Energy has not responded to a request. Tracey Davies, executive director of Just Share, a campaign for environmentally responsible investment in South Africa, said the deal was “incredibly disappointing”. He added: “It seems that the inherent contradiction of the 20-year emergency contract has been overcome by the government.”
Karpowership will supply energy through a local company with 49 per cent of South African investors. Carpowership vessels and other projects will supply 1.57 rand ($ 0.11) per kilowatt-hour of energy on demand, while the country is looking for other solutions in the longer term. All projects will have 20-year energy purchase agreements.
Ship power prices will eventually be linked to global LNG prices in U.S. dollars – a bad result for South Africans, according to the opposition Democratic Alliance. “There are few local benefits (such as employment or capital investment) in renting these powers over a 20-year period and [the local shareholding] it seems to be something more than the front to align the pockets of a few connected people, ”the party said.
The Department of Mineral and Energy Resources said it takes 20 years to secure investments. “It simply came to our notice then. . . the prices of these projects could be tripled, ”he added.
The government’s argument was “nonsensical,” said Liziwe McDaid, a member of the nonprofit organization Green Connection. “If it’s a land-based power plant, you can argue for 20 years because they have to build it.”
The ruling African National Congress has a square history with high-power procurement agreements. More than a decade ago the twin giant coal-fired power plant, the third-largest and fourth-largest in the world, promised to resolve the impending crisis, but they are not over yet. Zuma later reached a $ 70 billion deal that threatened to bankrupt public finances for Russia’s nuclear power plants until the court suspended them in 2017. “We have a power emergency in South Africa, but it’s a fully-fledged emergency,” Davies said. .
Environmentalists say the contract makes Africa’s biggest polluting future a fossil-dependent future. Karpowership says South Africa wants to help it move forward from fossil fuels over time. LNG was “the cleanest way to provide electricity immediately in 7 hours and support the transition to renewable energy,” said Zeynep Harezi, the group’s chief executive.
South African officials have stated that they have broader intentions to launch a local gas industry, such as operating ships with gas supplied from the country’s coastline, although these have yet to be explored and are increasingly being considered by global investors. financing natural gas.
It’s like saying “why don’t we start the horse-drawn transport industry,” two years after the first T Ford model was taken out of production, ”said energy expert Clyde Mallinson.
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