Karpowership licences challenged in court
CIVIL rights organisations have launched a court bid to overturn the National Energy Regulator of SA’s (Nersa) decision to grant generation licences to Karpowership SA for three planned gas-to-power projects, including one in Richards Bay.
The Organisation Undoing Tax Abuse (Outa) and environmental group Green Connection, filed papers with the High Court in Pretoria last week.
‘The decisions to award the licences to Karpowership for generation at Coega, Saldanha Bay and Richards Bay respectively were irrational, unreasonable, and taken without regard to relevant considerations or with regard to irrelevant circumstances,’ said Outa executive director, Advocate Stefanie Fick's affidavit supporting the application.
Karpowership SA was awarded three bids last year for its floating gas-fired power plants, to be stationed at the ports of Ngqura, Richards Bay and Saldhana Bay.
Once commissioned, they are expected to provide power to South Africa’s national electricity grid under the Risk Mitigation Independent Power Producers Procurement Programme.
The three Karpowership projects would together provide 1 220MW of gas-fired generation capacity.
The planned projects have, however, been marred by criticism and concern by various civil organisations and environmental groups.
‘Nersa failed to consider the climate impact of 20-year generation licences for the Karpowership IPPs (which run on fossil fuels) when cleaner, cheaper and faster electricity supply options are available,’ said Fick.
'The regulator also failed to conduct a proper analysis of the project costs and cost risk, and appears to have misconstrued the issues surrounding the electricity pricing formulas (in particular the gas pricing components).
'This includes the price being significantly exposed to variations in the US dollar / rand exchange rate and global gas prices,' she added.
Green Connection said it takes issue with Nersa's decision, which ignored the Department of Forestry, Fisheries and the Environment's (DFFE) refusal to grant environmental authorisation for the powerships.
'The Green Connection is also concerned over the negative climate change, environmental and economic impacts of the Karpowership companies being granted licences to operate over a 20-year period to fill a short-term electricity supply gap,' said Green Connection’s community outreach coordinator Neville van Rooy.
Nersa said it would study the application and 'advise whether it will oppose the application for judicial review within the required time frame and following due process'.