- The grid access withdrawal decision impedes Karpowership’s three gas-fired projects, accounting for 1,220MW.
- Only a fifth of the 2,000MW of power generation capacity awarded is being built.
Eskom Holdings SOC Ltd., South Africa’s state-owned power utility, has withdrawn transmission capacity (grid access) reservations for winners of a tender for emergency power provision, including Karpowership, a Turkish provider of ship-mounted power plants. This move comes as the projects failed to meet the December 31 deadline for completing their financial arrangements. The decision impedes Karpowership’s three gas-fired projects, accounting for 1,220 megawatts (MW), which faced legal challenges and environmental opposition.
A statement released by the utility on Friday stated that Eskom expressed regret over the expiration of budget quotes, noting that they intended the projects to address the country’s urgent need for additional power generation. This development underscores South Africa’s challenges to alleviate persistent power outages and economic impacts. The decision, which Eskom disclosed in response to a query from Bloomberg, is a blow for Karpowership. It further reduces the likely impact the 2021 program will have in making a dent in the almost daily power outages that are crippling South Africa’s economy.
Only a fifth of the 2,000MW of power generation capacity awarded is being built. This is after several of the 11 successful projects failed to reach a financial close. Karpowership’s three gas-fired projects, which lawsuits and challenges from environmentalists have beset, account for 1,220MW of the total and are yet to reach financial close. Eskom initially gave the projects a financial close deadline of July 31, 2021. Eskom’s decision means it can now award the transmission capacity, which is in short supply in South Africa, to other projects.
Also, those of Karpowership and the other bidders are no longer guaranteed access if they proceed. Eskom said the other projects with revoked access rights are a 200MW gas-to-power plant at the port of Coega initially proposed by Mulilo Energy Holdings Ltd. and TotalEnergies SE and a 180MW solar power plant planned by Mulilo. Scatec ASA was the first winner to announce that it reached a financial close and is proceeding with three solar power projects to supply 150MW.