Eskom ends power ships’ preferential access

Henry

Eskom has terminated bidders for the country’s emergency power procurement program from their preferred access to the power grid due to their failure to make financial arrangements after almost two and a half years of delays.

This means that companies that build power plants on ships, such as the Turkish company Karpowership, have generation capacity not guaranteed to be integrated into the power grid because it and other power suppliers missed the December 31, 2023 deadline.

“The expiry of these agreements is regrettable, as the projects were aimed at adding much-needed generation capacity to the power grid to ease the pressure on the system and the impact of load shedding,” Eskom said.

Karpowership is among the companies named as one of the preferred bidders in the government’s emergency power procurement program launched in 2020 by the Department of Mineral Resources and Energy.

The program aimed to acquire a total of 2,000 MW from various sources, including gas, solar, wind and other hybrid technologies.

Although 11 preferred bidders were announced by the Office of the Independent Power Producers in 2021, only seven of these projects – building only a fraction of the allocated generation capacity – have since reached commercial closure and moved into the construction phase.

However, the deadline to integrate the remaining four projects into the power grid fell in December, despite several extension periods granted by Eskom “to ensure the projects’ success”.

Karpowership’s three gas-powered plants, anchored in Saldanha Bay, Richards Bay and Coega, would have generated a total capacity of 1,220 MW. However, the company has faced fierce opposition from conservation groups in recent years and has been embroiled in several lawsuits.

According to Eskom, there is a total of 1,400 MW that will be lost because the respective projects could not meet their financial requirements.

“The grid connection capacity that has been provisionally reserved for these projects will now be allocated to other projects that are ready to connect to the power grid, thus providing much-needed power to South Africa,” Eskom said.