President Cyril Ramaphosa‘s declaration of a state of disaster because of the energy crisis will force the hand of forestry and fisheries minister Barbara Creecy to make a decision on the Karpowership environmental ruling on 7 March.
Last week, during his State of the Nation address (Sona), Ramaphosa declared a state of disaster in response to the unrelenting energy crisis and said he was appointing a minister of energy within the presidency to focus exclusively on ending load-shedding.
“The state of disaster will enable us to accelerate energy projects and limit regulatory requirements while maintaining rigorous environmental protections, procurement principles and technical standards,” he said.
Sources in the department of forestry and fisheries told M&G that following the declaration, Creecy will be forced to approve the decision to accommodate the state of disaster as Karpowership will bring 1 200MW to the Eskom grid.
The deal is estimated to cost South Africa more than R200 billion for the proposed 20-year contract. The duration of the emergency power contracts has been viewed as a key concern by industry experts.
South Africa needs power
The decision is set to be announced at a time when the country urgently needs a solution to the energy crisis which has seen it go through 206 days of load-shedding since 2021.
The decision will give relief to the Turkish company which has failed to reach financial closure because of environmental and legal challenges.
The environmental challenges include impacts on fishing, local ecosystems and potential greenhouse-gas emissions caused by the noise and air from the ship.
The company has also been taken to court by environment activists. It currently has the support of Mineral Resources and Energy Minister Gwede Mantashe.
Cabinet sources have argued that the state of disaster will take away the powers of ministers “in the name of crisis”. Ministers will have their hands forced when it comes to certain deals.
“This is the beginning of problems for many ministers because now, Creecy will have to overlook environmental concerns in the name of crisis. The problem with this is that, after we deal with the Eskom crisis, we will have to deal with an environmental crisis. This does not fix anything, instead it damages the environment,” the source said.
Another cabinet source said they were aggrieved about not being consulted regarding the decision to place Eskom under state of disaster. It may just be a tool for more corruption, they said.
“This decision will not yield anything, but is an opportunity for our fellow members to benefit from the money that will be released. We will sign up for longer expensive contracts that will continue to hurt our bank balance as a country, without a solution,” the member said.
Karpowership delayed
In June, Creecy’s department declined Karpowership’s application for environmental authorisation to operate in the ports of Coega, Saldanha Bay and Richards Bay after environmental organisations filed complaints about its harmful effects on small-scale fishing and marine ecosystems and its climate change impacts.
In August, Creecy again declined Karpowership’s applications to appeal saying that South Africa’s desperate need for power should not come at the expense of the Constitution or the environment, and subsequently human beings.
“I deem that an appropriate order … is to remit the matter back to the competent authority so that the various gaps in information and procedural defects in relation to the public participation process that led to the rejection of the environmental authorisation application may be addressed,” she said.
In December, Karpowership had rebooted its bid to supply the ships, after it was denied environmental authorisation due to failures in its public consultation processes previously.
The company confirmed it had re-filed for the environmental permissions and held public meetings in December.
Urgent solution needed
On Tuesday, during the Sona debate in parliament, Mantashe said the country does not have the luxury to wait for 24 months to resolve load-shedding. The immediate solution was to procure emergency or short-term power and purchasing electricity from neighbouring countries including Mozambique and Karpowership.
But, Mantashe said Karpowership remains an emergency power option to help alleviate South Africa’s energy crisis. “I think if we can get to 10 years, it will be okay. It will cost us a little bit more per unit … it will be a little bit expensive, but cheaper than the cost of load-shedding on the economy.”
He added that a leeway to buy electricity from the neighbouring countries who will offer, would be greatly beneficial to the country. “It is a luxury for South Africa to say we don’t want Karpowership when those work in Cote d’Ivoire, they work in Ghana, they work in Gabon, they work in Brazil.”
Minister of electricity ‘a mere project manager’
Sources in the cabinet said that the electricity minister would be a project manager responsible for Medupi and Kusile power stations. The source added that Mantashe would still have power over the energy department [including Karpowership and new contracts].
Mantashe confirmed the details, saying: “All it is, is emphasising the urgency of execution and delivery of the project on time. One must understand a project management approach means clear time frames and clear milestones and a clear critical path they should not deviate from. This is communicating a sense of urgency and desire to resolve this problem because we don’t have time to wait 24 months to resolve it,” Mantashe said.
The electricity minister would focus on improving the energy availability factor as Eskom’s six targeted power stations, which include five of the worst-performing stations, plus Kusile, which has been damaged and still needs to be completed.
Progress in fixing Eskom
During the Sona debate, Pravin Gordhan, minister of public enterprises, said there is a clear plan to ensure collaboration to solve the energy crisis as soon as possible.
“The sense of urgency is certainly there. And we will see results sooner or later in relation to bringing some of the megawatts back online,” he said.
He added that this means a combination of fixing the plants at Eskom, buying extra megawatts, “seeing some of the independent power producers come online, continuing with the restructuring of Eskom itself, and moving on where possible with the just energy transition”.
Gordhan noted there were enormous challenges to deal with at Eskom itself as the new board, which was appointed a little more than 100 days ago, found a raft of system issues at the utility.
“There is a skills exodus that has to be dealt with …There’s [inadequate] funding available for outages and maintenance. There’s criminality around, and in Eskom itself, the level of corruption is huge around the power stations.”
Mandisa Nyathi is a climate reporting fellow, funded by the Open Society Foundation for South Africa
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