On the 18th of March, Minerals and Energy Minister Gwede Mantashe announced eight independent power producers (IPPs) to produce an additional 1845 megawatt of power to the electricity grid to support Eskom’s capacity. Among these IPP’s is a company called Karpowership, a member of Karadeniz Energy Group based in Istanbul, Turkey. They have been named as a successful bidder to supply a portion of the 2,000MW required to supplement South Africa’s strained power grid. Let’s have a look at what these power producers are and how they work.
Since 2009 Karpowership has been designing and constructing floating power stations that can be deployed in a very short amount of time to provide power generation on a rental basis. These ships produce energy from Liquefied Natural Gas (LNG) straight to the national grid with no complicated and costly constructions. LNG is a fossil fuel and much more expensive than coal, but cheaper than the diesel used to run Eskom’s Open Cycle Gas Turbines.
Three gas-to-electricity “power ships” have been approved to dock in Saldanha (Western Cape), Coega (Eastern Cape), and Richards Bay (KwaZulu Natal). The deal between Karpowership and South Africa will span over 20 years with a total cost of R218 billion. “Power ships have proven effective in providing fast-response, emergency electricity – hence the maximum 10-year tenor for past contracts,” said Antoine Vagneur-Jones, an analyst at BNEF’s energy transmission policy team for Europe, Middle East, and Africa. “That the South African government would procure one for 20 years speaks to the depths of the country’s power crisis, and questionable long-term planning in light of dropping renewables costs.”
Each of these ships is a fully integrated, floating power station and requires only a fuel connection, no land is necessary. They contain their own generation, electrical control, and substation components, and include their own engineering capabilities and maintenance workshop. They connect these ships to the power grid, providing reliable and uninterrupted electricity.
Karpowership entered a bid in 2020 after having an exemption issued to them stating that extra electricity supplies were needed desperately because of the Covid-19 crisis. This exemption proclaimed that they did not have to do a mandatory environmental impact assessment, This magical escape clause allows environmental authorisation to be waived to prevent, contain, or mitigate an emergency situation where the loss of life or major property damage will occur if not reacted immediately. The waiver was revoked shortly after this information became publicised.
These ships cannot be manufactured and built in South Africa as we do not possess the technology and now they have received another exemption from the Department of Trade, Industry and Competition (DTIC). The government stipulated that all IPPs that entered bids have to comply with a 40% local content stipulation designed to encourage the development of locally based manufacturers and suppliers. But government stated that since the technology can’t be produced locally, they have granted Karpowership exemption from compliance with South Africa’s local content requirements.
Environmental groups have raised concerns about the continued use of fossil fuels, as this would leave a substantial carbon footprint. Researchers have cautioned that Karpowership’s 20-year contract could generate close to 20 million tons of carbon dioxide equivalent emissions per site. According to the social and environmental justice organisation, Green Connection, this deal could be devastating for the country’s affected small-scale subsistence fishing communities. A proper environmental impact assessment is necessary to establish the full impact of these power ships before they dock in South African waters around August 2022.
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