Karpowership SA gets generation licenses 'but deal could still be stopped'
The National Energy Regulator of South Africa (Nersa) has approved three generation licenses for Karpowership SA.
The floating powership provider has been granted licenses for Saldanha Bay, Coega and Richards Bay.
The decision was taken at a Special Energy Regulator Meeting on Tuesday afternoon.
Nersa has not yet released its reasons for the decision.
It's not full steam ahead yet for Karpowership SA however.
The company must still secure further authorisations before its ships can operate at the three ports and connect to the national grid.
Its applications for environmental approval were refused by the Department of the Environment in June.
Arabile Gumede (in for Bruce Whitfield) interviews energy analyst Chris Yelland, Managing Director of EE Business Intelligence.
Yelland emphasizes that Tuesday's approval of generation licenses does not translate into a done deal for Karpowership.
He outlines "the many issues" still to be dealt with, including outstanding ports authorisation from the ports regulator and the earlier refusal of environmental authorisation for the three projects.
Whilst they may have a generation license, they still can't generate until this question of the environmental authorisation has been dealt with and they receive authorisation from that regulator [Department of Environment, Forestry and Fisheries].Chris Yelland, Energy analyst and MD - EE Business Intelligence
Yelland notes that there is also no fuel supply agreement in place, which could take a bit of time to arrange.
There's also no fuel pipeline license. A different division of Nersa issues fuel pipeline licenses and they haven't got that yet.Chris Yelland, Energy analyst and MD - EE Business Intelligence
Eskom hasn't agreed to a power purchase agreement yet.Chris Yelland, Energy analyst and MD - EE Business Intelligence
He adds that the outcome of a legal challenge by DNG Energy could put a stop to the whole project.
So, a generation license in hand, but that certainly does not mean that the project will go ahead as you can see from previous IPP projects like the coal IPP project several years ago. They were awarded the contract etcetera, but they never achieved financial closure and they have been abandoned.Chris Yelland, Energy analyst and MD - EE Business Intelligence
Listen to Yelland's insights below:
Source : https://en.wikipedia.org/wiki/MV_Karadeniz_Powership_Do%C4%9Fan_Bey#/media/File:Dogan_Bey.JPG