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Nersa 'slip-up' suggests govt would pay Karpowerships nearly double - report

2 December 2021 7:30 PM
Tags:
Eskom
Nersa
The Money Show
Bruce Whitfield
amaBhungane
Energy Supply
Karpowership
Karpowerships
Powerships
Clyde Mallinson
Karadeniz Holding
DMRE

Bruce Whitfield interviews energy analyst Clyde Mallinson about amaBhungane's latest report on the Karpowership bids.
Image courtesy of Sumbebekos (Wikimedia Commons).

The secrecy around South Africa's deal with Karpowerships has been widely lambasted, writes Dewald van Rensburg for amaBhungane.

However, "it appears that Nersa slipped up when it approved the licences and published the three heavily redacted reasons-for-decision documents on 29 October".

The article titled Karpowership's R3.3bn per year 'freebie' suggests that Eskom will be drawing only 40% of Karpowership’s available power, while paying for a minimum of 72.7%.

RELATED: Karpowership SA gets generation licenses 'but deal could still be stopped'

RELATED: Karpowerships: 'Almost as if there are powerful friends giving a helping hand'

Bruce Whitfield gets some insight from energy analyst Clyde Mallinson.

We don't have to pay them anything if we don't sign the PPAs [power purchase agreements] with them, so it's not a case that we've committed ourselves...

Clyde Mallinson, Energy analyst

The contract with the Karpowerships is a bit like renting a car - you rent a car for a month and you pay that rental whether you drive it or not... The more you drive it the more you spend because you're paying for rental and for petrol, but the less it costs you per kilometre.

Clyde Mallinson, Energy analyst

The contracts are split into what we call a capacity part (like a lease part) and a fuel part. So if Eskom uses the Karpowerships less than they had committed to, they would still have to pay them the full lease amount but they would pay less for gas... The guy who might get a bit prickly are the guys who supply the gas...

Clyde Mallinson, Energy analyst

Mallinson says it's shocking that it's up to our investigative reporters to try and "unriddle" the riddle amid the secrecy surrounding the tenders.

The really tragic thing about the Risk Mitigation [IPP Procurement] Programme, which the Karpowerships dominate, is that we could get exactly the same results for the country... at about half the cost of what the bidders have bid at if they just changed the rules of the bidding game The rules were rigged in favour of gas...

Clyde Mallinson, Energy analyst

I want to impress upon people that we're about to sign ourselves to contracts that are going to cost us R8 billion per year more than they need to simply because of a poorly-run procurement programme.

Clyde Mallinson, Energy analyst

We need to be building solar and wind and battery storage as if our lives and livelihoods depend on it...

Clyde Mallinson, Energy analyst

Listen to Mallinson's argument on The Money Show:




2 December 2021 7:30 PM
Tags:
Eskom
Nersa
The Money Show
Bruce Whitfield
amaBhungane
Energy Supply
Karpowership
Karpowerships
Powerships
Clyde Mallinson
Karadeniz Holding
DMRE

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