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Karpowership deal could ease burden of loadshedding

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Picture: EPA-EFE The Fatmagul Sultan power ship, docked in Lebanon, is one of the ships operated by the Turkish-based Karpowership company which has been granted access to the South African ports of Durban, Ngqura and Saldanha Bay for 20 years in an effort to find solutions to the country’s power crisis.

By Gwinyai Taruvinga

South Africa’s load shedding is affecting the daily lives of citizens. In April, it was reported the country had already experienced as much loadshedding this year as almost the entire amount for last year, which shows how the electricity situation has continued to deteriorate. Loadshedding has greatly affected South Africa’s economy, with businesses having to find and rely on other forms of energy such as generators and solar panels.

Loadshedding has especially affected small businesses and it was revealed 64 percent of township small businesses halted operations during loadshedding and 66 percent of business owners have shed jobs. In addition, these small businesses have had to incur increased operating costs which have hamstrung profitability. For larger corporations, the shift to other forms of energy generation has been far easier compared to smaller businesses.

The government has mooted several ideas to address the electricity in the country. President Cyril Ramaphosa appointing Kgosientsho Ramokgopa as minister of Electricity, although there were mixed feelings towards this appointment, was seen as a step towards addressing the crisis the country currently faces. This appointment has further shown the crisis does not look like it will be relenting soon as the minister alluded to the fact that loadshedding will not stop by the end of December as had been stated by ANC secretary-general Fikile Mbalula.

In addition to the appointment of Ramokgopa, the government had previously encouraged the use of alternative forms of energy but these remain unattainable for several citizens. In another recent move by the government, Transport Minister Sindi Chikunga announced her department had given the green light for Karpowership to have access to the ports of Ngqura, Durban, and Saldanha Bay for 20 years. This arrangement will see Karpowership produce gas-to-power at these three ports.

Many energy analysts have welcomed this development, arguing any additional energy that can be added to the grid is welcome. In granting access to Karpowership, at least in theory, there is an opportunity to alleviate a challenge that has crippled the country for several years now. Karpowership aims to generate power on its floating gas ships to distribute through the country’s electricity grid with Ramaphosa alluding to how this move could help ease the power shortages that the country faces.

However, not all circles in the country have received this news well, with opposition parties castigating the Ramaphosa administration for this move. Some within the opposition circles have argued that the 20-year contract was too long for an emergency power supply. The parties also cited how similar arrangements in countries such as Ghana and Brazil did not have as lengthy time frames as that adopted by South Africa.

In a statement issued by the South African Government News Agency, the Turkish-owned company seeks to supply 1220MW of electricity to the country. The statement also said the directive was subject to all other government approvals such as environmental approvals from competent government departments, which raises a question about the environmental impacts of these arrangements.

Interestingly, Karpowership’s first application was declined by the Department of Forestry, Fisheries, and Environmental Affairs due to what it saw as “gaps” in the company’s environmental assessment. The company is said to use fossil fuels to generate power which environmentalists see as a huge obstacle to South Africa’s desire to shift towards renewable energy. Groups such as Green Connection had in the past opposed the deal, citing that the fishing community had not been consulted.

This deal has been shrouded in controversy; thus many have viewed the move in a negative light. In 2021, three Karpowerships were listed among eight bidders as part of the Risk Mitigation IPP Procurement Programme (RMIPPP) meaning that the company had been a front-runner in securing the deal.

Despite this, in theory, the move makes sense seeing the impacts of loadshedding on the country. Eskom has painted a bleak picture for the current winter season where it warned citizens to brace for more loadshedding. South Africa’s economy is seen to be one of the most industrialised economies on the Continent and the power cuts have seen the country’s GDP suffer greatly.

The government has also failed to invest in the ageing coal-fired power plants where the bulk of South Africa’s electricity emanates from. The constant breakdown of these power stations has led to the energy crisis that the country continues to face.

It is, therefore, no surprise that although the deal is shrouded in controversy, Karpowership can be seen as a move that could indeed address the energy crisis South Africa faces. As with many such arrangements globally, the implementation of the deal will be important in seeing an end to the power woes the country has continued to face over the last few years.

Gwinyai Taruvinga is a Post-doctoral Research Fellow at the Wits Humanities Graduate Centre