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Karpowership SA gets generation licenses 'but deal could still be stopped'

21 September 2021 6:48 PM
Tags:
Nersa
The Money Show
Chris Yelland
Bruce Whitfield
Richards Bay
Electricity supply
Saldanha Bay
Environmental impact assessment
Coega
National Energy Regulator of South Africa
environmental impact
Karpowership
Karpowerships
Karpowership SA
Powerships
DNG Energy

Arabile Gumede interviews analyst Chris Yelland after energy regulator Nersa approves 3 licenses for Karpowership.
Image courtesy of Sumbebekos (Wikimedia Commons).

The National Energy Regulator of South Africa (Nersa) has approved three generation licenses for Karpowership SA.

The floating powership provider has been granted licenses for Saldanha Bay, Coega and Richards Bay.

The decision was taken at a Special Energy Regulator Meeting on Tuesday afternoon.

Nersa has not yet released its reasons for the decision.

RELATED: 'Creecy has final say on Karpowership deal after enviro assessors give go-ahead'

It's not full steam ahead yet for Karpowership SA however.

The company must still secure further authorisations before its ships can operate at the three ports and connect to the national grid.

Its applications for environmental approval were refused by the Department of the Environment in June.

RELATED: Environment Dpt sinks controversial Karpowership deal, can it still go ahead?

Arabile Gumede (in for Bruce Whitfield) interviews energy analyst Chris Yelland, Managing Director of EE Business Intelligence.

Yelland emphasizes that Tuesday's approval of generation licenses does not translate into a done deal for Karpowership.

He outlines "the many issues" still to be dealt with, including outstanding ports authorisation from the ports regulator and the earlier refusal of environmental authorisation for the three projects.

Whilst they may have a generation license, they still can't generate until this question of the environmental authorisation has been dealt with and they receive authorisation from that regulator [Department of Environment, Forestry and Fisheries].

Chris Yelland, Energy analyst and MD - EE Business Intelligence

Yelland notes that there is also no fuel supply agreement in place, which could take a bit of time to arrange.

There's also no fuel pipeline license. A different division of Nersa issues fuel pipeline licenses and they haven't got that yet.

Chris Yelland, Energy analyst and MD - EE Business Intelligence

Eskom hasn't agreed to a power purchase agreement yet.

Chris Yelland, Energy analyst and MD - EE Business Intelligence

He adds that the outcome of a legal challenge by DNG Energy could put a stop to the whole project.

So, a generation license in hand, but that certainly does not mean that the project will go ahead as you can see from previous IPP projects like the coal IPP project several years ago. They were awarded the contract etcetera, but they never achieved financial closure and they have been abandoned.

Chris Yelland, Energy analyst and MD - EE Business Intelligence

Listen to Yelland's insights below:


This article first appeared on CapeTalk : Karpowership SA gets generation licenses 'but deal could still be stopped'




21 September 2021 6:48 PM
Tags:
Nersa
The Money Show
Chris Yelland
Bruce Whitfield
Richards Bay
Electricity supply
Saldanha Bay
Environmental impact assessment
Coega
National Energy Regulator of South Africa
environmental impact
Karpowership
Karpowerships
Karpowership SA
Powerships
DNG Energy

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