The effects of offshore gas projects contribute to a humanitarian crisis, and mainly only the companies and countries of the north benefit from the profits and commodities.
Generation licences granted to the Karpowership independent power producer (IPP) by the National Energy Regulator of South Africa (Nersa) were premature and lacked transparency, according to the Organisation Undoing Tax Abuse (Outa).
The civil society organisation has filed an application in the Pretoria high court to review and set aside Nersa’s decisions to award the licences to Karpowership, and to order the energy regulator to reconsider its decisions.
Elaborating on why it was contesting the licences at a press conference last week, Outa said Nersa’s decision was “irrational, unreasonable, and taken without regard to relevant considerations”.
“It is submitted that Nersa has displayed a cavalier attitude towards statutory compliance and public concerns throughout its decision-making process to award generation licences to Karpowership,” said Outa’s head of accountability, Stefanie Fick.
“By doing so, it has failed to properly exercise its mandate in terms of the ERA (Electricity Regulation Act) and fulfil its oversight functions [as] regulator without the necessary independent checks and balances to ensure that the interests of electricity suppliers are balanced with the interests of customers, the public and the South African economy.”
Karpowership was granted three licences — Karpowership SA Coega, Karpowership SA Saldanha Bay and Karpowership SA Richards Bay — in September last year.
According to Outa, the 20-year power-supply deal, which will provide 1 220 megawatts of energy through floating storage and regasification power plants, could cost up to R218-billion.
Fick said the Karpowership projects “are not needed”.
Outa contends there are alternative measures that “are faster and substantially cheaper … to eliminate load-shedding in the short-term”.
It said the Karpowership projects would impose unnecessary financial, economic and environmental costs on South Africa.
Regarding Karpowership’s effect on the environment, Outa said it undermined the country’s efforts “to decarbonise its economy” given that Karpowerships run on fossil fuels.
Further objections from Outa against granting the licences include:
- Nersa’s decision-making was procedurally unfair;
- Nersa conducted the public participation process without providing the public with the necessary facts on which to comment, including pricing aspects;
- The regulator did not take into account that Karpowership IPPs failed to meet certain legal and regulatory requirements — including Nersa’s own prescribed requirements for generation licence applications to be considered; and
- Nersa’s lack of transparency on the financial information raises concern about the effect on the public.
Outa’s court application follows weeks after an inquiry into procurement processes, which led to the Turkish-led consortium winning the bid, was dismissed by parliament.
The inquiry was to take place in the first quarter of 2022 and to proceed for a period not exceeding 120 days.
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