A 20-year Karpowership deal doesn’t make sense for the Western Cape, says Winde | Business

A 20-year Karpowership deal doesn't make sense for the Western Cape, says Winde | Business

Western Cape Premier Alan Winde

Western Cape Premier Alan Winde

Samantha Lee-Jacobs/People’s Post

  • The Western Cape’s Cabinet does not view a 20-year contract with Karpowership as in the best interests of the province.
  • Premier Alan Winde says a new tender process should be opened for companies to bid for five-year contracts.
  • The Western Cap backs renewable energy as a cost-effective solution.
  • For climate change news and analysis, go to News24 Climate Future.

The Western Cape government is “totally against” having an emergency energy solution such as the Karpowership extending for two decades, according to Premier Alan Winde.

On Thursday, the Western Cape Cabinet adopted its final position on energy procurement from Karpowership. Karpowership was named a preferred bidder in government’s Risk Mitigation Independent Power Producer Procurement Programme in 2021. It was to provide over 1 200MW of power from floating gas-power vessels located at three of South Africa’s ports – Richards Bay, Saldanha and Coega.

It’s faced a number of hurdles – such as having environmental authorisation for the proposed projects denied and also being criticised over the cost associated with a 20-year procurement contract.

Among the efforts to address the energy crisis, national government has said it is not opposed to power ships as an emergency energy source. Electricity Minister Kgosientsho Ramokgopa also previously said that contracts should not be more than five years.

But the Western Cape government is highly opposed to procuring power from Karpowership over 20 years. The proposed project would be based in Saldanha Bay, on the West Coast.

“We are totally against having a ‘quick’ energy solution and then locking it in for 20 years. That cannot be a solution,” Winde said during a webinar on Thursday.

“There are a lot of plans for Saldanha Bay. You can’t be stuck with an energy ship stuck in the middle of it,” said Winde.

The premier’s special energy advisor, Alwie Lester, explained that Saldanha would require infrastructure upgrades for a power ship.

“Firstly, the ports authority would have to look at whether the depth of the harbour itself can accommodate the Karpowership…” said Lester. Other factors to consider include the distance from the ship to the harbour, as well as the need for a transformer near the harbour to convert the energy to a usable voltage for the municipal grid.

Then, further work will be required to strengthen the grid to feed power to Saldanha municipality and potential off-takers like steelmaker ArcelorMittal or the City of Cape Town.

“There will be infrastructure costs that we will incur, and there will have to be technical assessments done prior to any decisions being taken.”

READ | Govt in talks over shorter contracts for Karpowership

No monopoly

Winde is also opposed to the existing Karpowership contracts being renegotiated to five years. Instead, he believes a new tender process should be opened for companies to bid for five-year contracts. “I do not think you can renegotiate the current tender process … I think it must be open,” he said.

Karpowership SA should not be given the monopoly. If we are to include powerships in our efforts to resolve the energy crisis, we must also consider other companies, and the time period over which they would be utilised must be strictly limited to five years, subjected to clear guidelines. This measure should also not negate our investment into ‘green energy’.

– Western Cape Premier Alan Winde

 

The premier said that the province is seeking “quick, permanent” solutions, like renewable energy being part of its energy mix.

“Not only is renewable becoming increasingly cost-effective, it will also assist greatly in our transition away from fossil fuels. We need to strike a balance; we have an obligation to meet the country’s climate change commitments while at the same time growing our economy which requires a stable, resilient, low-carbon energy mix,” Winde said in a separate statement.

Source: https://www.news24.com/fin24/climate_future/energy/a-20-year-karpowership-deal-doesnt-make-sense-for-the-western-cape-says-winde-20230824

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