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'Back to the drawing board' for govt as Karpowership SA, others lose grid access - Ramokgopa

Electricity Minister Kgosientsho Ramokgopa

Electricity Minister Kgosientsho Ramokgopa

9th January 2024

By: News24Wire

  

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Government has to "go back to the drawing board" now that Karpowership SA and two other emergency power projects lost their grid access, says Electricity Minister Kgosientsho Ramokgopa.

The minister was speaking on Tuesday at a briefing on the progress of government's Energy Action Plan.

Last week, Eskom issued a statement indicating that Karpowership SA's three gas-to-power plants proposed for Saldanha Bay, Coega, and Richards Bay were among the projects that had their grid access expire after failing to reach financial close by a 31 December 2023 deadline.

The other two projects are the Mulilo Coega Gas to Power plant and the Gemsbok PV plant – with a combined dispatchable capacity of 200MW.

All of the projects were named preferred bidders in the state's Risk Mitigation Independent Power Producer Procurement Programme of 2020, which sought to speedily add 2 000MW to the grid to cut down on loadshedding. Karpowership SA was to provide the bulk (1 220MW) of this installed capacity.

Given that the validity period for their grid access expired on 31 December 2023, the country will lose out on 1 400MW of potential dispatchable power. This is electricity that would have been added to the grid if the projects had reached completion.

The development adds to South Africa's energy security challenges, signalling the likelihood of more loadshedding in the future.

"Of course, the downside of it is that we have lost out on the opportunity. We can't get those megawatts. So we need to go back to the drawing board and that is the work we are doing," said Ramokgopa.

"What it does is really undermine our ability to resolve this problem in the shortest possible space of time," Ramokgopa added.

He also emphasised that government would not be "tampering" with the decision that Eskom and the Independent Power Producer Procurement Programme Office have reached. He said there were clear procurement rules that had to be followed - such as financial close being reached by a certain period.

Ramokgopa said that government would arrange an engagement with the Eskom board on the matter to determine how best to procure emergency power.

Who's shovel ready? 

Eskom last week that it is "regrettable" that the projects had lost their grid access because they were meant to bring "much-needed" additional generation capacity to the country's power system that would have minimised loadshedding.

The grid connection capacity that was reserved for the projects will now revert to a pool of available capacity, which Eskom will allocate to shovel-ready projects in terms of its interim grid access rules. 

The power utility told News24 that it was still in the process of assessing whether there were any projects that could quickly be added to the grid before it reallocated access. For now, the projects that lost their grid access have not indicated whether they would reapply for it.

Civil society organisation, the Green Connection, which has previously challenged the environmental authorisation granted for the Karpowership SA projects, welcomed the news that the grid access for the projects expired.

On the overall performance of existing generation units, Ramokgopa noted that some units faced unplanned breakdowns at the start of the year that warranted load shedding, but there has since been a recovery.

"We will have days of no loadshedding. And there will be days of loadshedding," said Ramokgopa.

Edited by News24Wire

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