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A Karpowership vessel. Picture: SUPPLIED
A Karpowership vessel. Picture: SUPPLIED

Turkish-owned Karpowership SA, which won the largest share of the government’s emerging power tender in 2021, has withdrawn opposition in a case to be heard in the Pretoria high court next week over the energy regulator’s decision to award generation licences to the company.

In separate applications, environmental justice group The Green Connection and lobby group Organisation Undoing Tax Abuse (Outa) approached the courts in 2023 to force national energy regulator Nersa to provide a complete and unredacted record of its decision to grant Karpowership generation licences for it gas-to-power ships that, according to the tenders, it won.

The projects — to be moored at the ports of Saldanha, Richards Bay and Coega — also faced legal challenges and delays due to various challenges to environmental approvals.

Progress on the projects has stalled since Eskom announced in January that the budget quotes it had issued for the projects, which expired on December 31, would not be extended further.

The expiration of the budget quotes meant the grid capacity that was reserved for these projects reverted to the pool of available capacity.

The Green Connection and Outa approached the court in a bid to have Nersa’s decision to grant the three Karpowership independent power producer generation licences set aside — this application was opposed by Nersa and Karpowership.

They also filed applications to compel the production of the full record of Nersa’s decision to approve the generation licences.

Karpowership has withdrawn its opposition to both, however, Nersa and the department of mineral resources & energy still oppose them.

“We believe that 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 and fulfil its oversight functions without the necessary independent checks and balances to ensure that the interests of electricity suppliers are balanced with the interests of customers, the public and the SA economy,” said Outa’s executive director, advocate Stefanie Fick.

Liziwe McDaid, strategic lead for The Green Connection, told Business Day that Nersa issued the generation licences for the three projects even though there were no environmental authorisations in place.

Like Outa, the group also objected to the insistence by Karpowership, and the decision by Nersa, to not disclose information about the actual cost of electricity from these projects.

“We will be in court next week for it to decide whether we as the public are entitled to have access to this information, which Nersa and Karpowership claimed was commercially sensitive,” she said.

“The minister [of mineral resources & energy] and Nersa are still determined to prevent us from having access to all the relevant information relating to how Nersa made its decision to grant the generation licences.”

The case, she said, could set an important precedent for similar cases in future. “After Nersa has decided on whether to grant a generation licence, civil society has little recourse because there is no appeals process — once the decision has been made the only way it can be overturned is by going to court,” said McDaid.

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