After a swathe of environmental appeals processes, on 25 October Richards Bay became the first environmentally licensed site for Karpowership’s gas-to-electricity operations. Decisions are pending on Saldanha in the Western Cape and Coega in the Eastern Cape.

As always in contested matters, the devil is in the detail — in this case, a list of 34 specific conditions in the 27-page Department of Forestry, Fisheries and the Environment’s (DFFE’s) environmental authorisation decision document.

“A 12-month pre-construction monitoring for avifaunal species must be undertaken to inform the scale and magnitude of the residual impacts… The monitoring must be undertaken prior to construction commencing.”

Plainly put, a year-long bird counting and monitoring project is required before any construction starts on the required 3.6km powerline to the national grid via Bayside Impala and a switching station. That’s because a baseline for the birdlife must be set so the impact of the construction can be measured — and off-sets or compensation determined.

But Karpowership SA says that monitoring has already been done. “A full 12-month bird count has already been undertaken by the avifaunal specialists and thus in full compliance to the condition in the authorisation,” the company said in an emailed response to a request for comment.

A final development layout, including all available biodiversity information, must be submitted to the DFFE for “written approval prior to commencement of activities”, according to the authorisation. It could not immediately be confirmed how far along that process was and how the sequencing of conditions was to unfold.

Apart from birds, monitoring of elephants and black and white rhinos is also among the conditions of the Richards Bay environmental authorisation.

Central here is Karpowership’s acquisition of the Madaka Game Ranch, which was introduced to the sellers by Ezemvelo KwaZulu-Natal Wildlife just ahead of a planned auction in March that was subsequently cancelled, as amaBhungane reported in September.

Read more in Daily Maverick: Karpowership game ranch ‘donation’ raises new stink over green offset schemes

“The Madaka Game Ranch must be incorporated into the Ithala Game Reserve and registered as a biodiversity protected area… A formal agreement to this effect must be concluded within 18 months from the date of issue of this environmental authorisation and records must be submitted to the department for record keeping,” says the 25 October environmental authorisation citing biodiversity targets like elephant and black and white rhino populations.

The Ithala Game Reserve is publicly owned and managed by Ezemvelo. 

But back to birds.

After the pre-construction 12-month birdwatching, another 12-month monitoring period starts once the construction is completed.

“Results from the monitoring will inform implementation of and any enhancement to the proposed mitigation measures to ensure that the development does not have a long-term impact on the SCCs [species of conservation concerns] and migratory waders in the area,” the environmental authorisation says.

Monitoring also includes the Sandspit and Kabeljous Flats — waders and tern territory — for which Karpowership SA told Daily Maverick by email it “already has a full complement of suitably qualified and professionally registered specialists to ensure compliance to the conditions of the environmental authorisations”.

Mired in controversy

The Richards Bay environmental authorisation has come on the back of years of controversy over the gas-to-electricity offshore operations in South Africa and elsewhere.

Up the African coast, Karpowership in October cut off power to Guinea-Bissau’s capital, Bissau, over a $17-million debt, according to Reuters, which in September reported that the company cut power to Sierra Leone’s capital, Freetown, over a $40-million debt.

South Africa’s 20-year Karpowership deal for 1,220MW estimated at R228-billion has been mired in controversy and litigation almost from the start. One of the unsuccessful bidders went to court after the company, owned by the Turkish Karadeniz Holding, in March 2021 was named the preferred bidder in the Department of Mineral Resources and Energy’s 2,000MW emergency power project, officially known as the risk mitigation independent power producer procurement programme (RMI4P).

Since then, there have been multiple appeals against environmental assessment and permit processes over shoddy execution and failure to conduct meaningful public consultations.

Over the past two and a half years, the government has extended the deadline for financial close at least four times — the latest being the end of 2023 — while the national energy regulator, Nersa, in September 2021 allocated the necessary 20-year generation licence and the Transport Ministry in February 2023 granted Karpowership access to the ports of Richards Bay, Saldanha and Coega.

However, all this has come at a time when it’s being asked whether an emergency power provision project is still relevant. Renewable energy has mushroomed on rooftops, at company premises and in a plethora of independent power projects that feed into the Eskom grid.

Cost concerns

In May 2022, the then Eskom chief operations officer Jan Oberholzer told the McCloskey Southern African Coal Conference the state power utility was reluctant to sign a 20-year power purchase agreement, particularly as the gas price was not fixed. “The risk is just too high,” News24 quoted him as saying.

Daily Maverick understands Eskom, which is now unable to borrow further under February’s R254-billion bailout conditions, continues to have reservations about the Karpowership deal. 

Perhaps it’s against this backdrop that Karpowership has now on public record indicated it will offer the government an exit clause after five or 10 years of the 20-year deal. It’s understood an early exit would trigger penalty payments.

The company’s chief commercial officer, Zeynep Harezi Yilmaz, on Tuesday on SAfm Sunrise maintained the gas-to-electricity powerships were South Africa’s first steps in its energy transition.

With the environmental authorisations for Saldanha and Coega expected shortly, financial close was expected by the end of 2023 with operations to start later in 2024, added Harezi Yilmaz.

A similar message was conveyed in the emailed responses to Daily Maverick on Wednesday: 

“We are proud to be able to play a significant role with our LNG-to-Power technology in Richards Bay where our current focus is on meeting financial close. We remain committed to seeking environmental approval for our other two other projects at Saldanha Bay and Coega.”

If that does occur, the conditions of those two DFFE environmental authorisations remain to be seen.

At Richards Bay it’s been one for the birds — with counting, monitoring and “avian biodiversity and species abundance” information for the custody of Birdlife South Africa. DM