Fossil Fuels Legal

Proposal for Turkish company to anchor ‘floating power stations rings alarm bells

 The MV Karadeniz Powership Osman Khan. (Photo: Wikipedia)

Under cover of the Covid-19 crisis, government and private officials appear to be using legal loopholes to speed up a proposal by a Turkish company and local empowerment partners to sail a small armada of “floating power stations” into South African harbours. While the red flag has been raised by environmentalists and law experts, the Turkish company involved insists that all protocols were being followed and that there was nothing irregular in applying for an environmental exemption during Covid-19.

Five Turkish-made power stations could be sailing into the ports of Durban, Richards Bay, Nqura (Port Elizabeth) and Saldanha Bay soon – ostensibly to “ameliorate the impact of Covid-19” and keep the country’s lights burning until Eskom gets its plans together again.

The floating power stations would conceivably provide a swift injection of nearly 2,000MW of electricity amid Eskom’s perennial load shedding. 

But the Turkish proposal has raised several red flags by environmentalists and legal attorneys around finance costs, environmental impacts and what appears to be the abuse of an emergency clause in environmental law to speed up the approval process using Covid-19 as a pretext. In researching this article, there also appears to be a hush-hush response from the government.

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The mobile power station concept was developed about 10 years ago by Karpowership, an affiliate of the Istanbul-based Karadeniz Energy Group. (Screenshot: Youtube / Karpowership)

Jeremy Ridl, a Durban specialist environmental attorney and former environmental law professor at the University of KwaZulu-Natal,  has warned that, if allowed, the abuse of this emergency clause during Covid-19 could carve open a new legal loophole for many developers to evade the need for any environmental impact assessments (EIA).

In response, the company involved has claimed that there was nothing irregular in obtaining the directive during Covid-19.

Turkish power ships are already deployed in several small, conflict-battered nations across the developing world, including Lebanon, where they supply up to 25% of that country’s electricity. Burning extremely flammable liquified natural gas or heavy shipping oil, the floating generators are hooked up to land-based power pylons and substations to feed electricity into the national grid.

Two such power ships – fortunately, moored several kilometres from central Beirut – escaped catastrophe on 4 August following the explosion of ammonium nitrate that killed more than 170  people and blasted a massive chunk of the city’s main harbour.

The mobile power station concept was developed about 10 years ago by Karpowership, an affiliate of the Istanbul-based Karadeniz Energy Group. The company owns more than 20 power ships capable of generating about 3,000MW of electricity.

After landing contracts in 13 countries such as Iraq, Cuba, Sierra Leone, Mozambique and Sudan, the Turkish sales team turned their sights on South Africa some years back and have worked more recently to bag a lucrative new contract from Eskom, via the Department of Minerals and Energy Resources (DMER).

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Late in 2019, when the country swung back into a fresh cycle of power failures, the Department of Mineral Resources and Energy (DMRE) published a Request for Information (RFI) for suppliers to provide between 2,000 and 3,000MW of electricity for the national grid, which has a total installed generation capacity of about 46,000MW.

The department’s invitation (issued several months before the Covid-19 crisis) said a key bidding requirement was very short lead times. Power providers would have to hook up new plants at intervals of three to six months or six to 12 months after getting the green light from the government.

Significantly, the invitation says all bidders must secure environmental authorisation. This is where recent events have become cloudy, with indications that government officials and private consultants have abused legal mechanisms – by using the emergency clause  – to ensure smooth sailing for the Turkish fleet and its local empowerment partners, who include Black Energy Professionals Association member Sechaba Moletsane.

People who appear to be playing a leading role in the approval process include Karpowership’s Dubai-based sales director Paddy O’Driscoll; Ballito environmental consultant Hantie Plomp and SA Department of Environmental Affairs director Sonnyboy Bapela.

The MV Karadeniz Powership Osman Khan. (Photo: Karpowership)

Without an EIA, the diverse range of environmental impacts of power ships would not be assessed. GroundWork and other interested parties have raised concerns about additional air pollution impacts from burning gas (or cheaper heavy fuel oil) and the ecological impacts of discharging salt-laden brine water and hotter water on sensitive sea and estuarine creatures. Some parties are also concerned about the potential safety risks, such as accidental fires or explosions. 

Normally, developers are required to consult the public and launch a mandatory environmental impact assessment (EIA) for projects which could have significant impacts. 

But a magic escape clause allows environmental authorisation to be waived to prevent, contain or mitigate an “emergency situation”. The escape clause – Section 30A of the National Environmental Management Act (NEMA)  – came into effect in 2014 and was intended to cater for emergencies that could cause severe harm to the environment, human life and property – such as floods, droughts or disasters in the mining industry.

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One such example was the Merriespruit disaster of 1994 where a Harmony Gold Mine waste dam collapsed, killing 17 people and flooding the adjacent mining village with 2.5 million tonnes of liquefied mining waste.

By waiving the normal environmental approval process, this section allows companies and other parties to respond almost immediately, so that they can block off rivers to prevent pollution from spreading further downstream or to clear away indigenous vegetation in an emergency.

Recognising the need for speed in such situations, Section 30A allows an official to grant a verbal directive within six hours of receiving a request. However, this verbal approval must be confirmed in writing within the next seven days – and if the listed activity (blocking a river, clearing land etc) does not commence “within the disaster declaration period”, then the directive lapses and the normal EIA process has to be followed.

Now it appears that this legal provision has been harnessed by Karpowership and its environmental consultants to escape an EIA and public participation for a project proposal that was initiated months before Covid-19 arrived on the scene.

Daily Maverick has a copy of a six-page document from the Department of Environmental Affairs, Forestry and Fisheries (DEFF) which purports to grant emergency approval for the project “in response to Covid-19 pandemic situation facing the country”.

The document is dated July 16 and signed on Karpowership’s behalf by Aletta “Hantie” Plomp, managing director of the private environmental consultancy Triplo4 Sustainable Solutions.

In a separate document, compiled on August 3, Plomp states that the Section 30A directive had also “responded to the National Disaster Act” and the floating power station project was “viewed as a significant contribution to life-saving initiatives through secured energy supply within the shortest time period”.

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In a legal assessment written shortly after the introduction of Section 30A, environmental attorney Jacqueline Campbell cautioned that the broad definition of an environmental “emergency” could lead to abuse by developers.

“Such abuse may possibly lead to directives being issued by the competent authority to dispense with the requirement to obtain an environmental authorisation, under inappropriate circumstances,” she cautioned in 2015.

Five years later, her concern may be vindicated in the case of the Karpowership directive.

Voicing astonishment over the possible abuse of Section30A in this case,  Ridl said: “This is bizarre – and if it turns out to be legal, it will mean that EIAs for most projects will be unnecessary. Conceivably every development project or farm produces some or other social or economic benefit that will help to combat the many impacts of the Covid-19 ‘disaster’,” he said.

“The production of a supplementary supply of electricity cannot conceivably ‘prevent or contain’ the emergency situation… I do not believe that Section 30A can be interpreted to allow a person to undertake any project that assists the country to ‘mitigate’ the effects of the Covid-19 emergency situation. This is far too remote from the clear intention and purpose of Section 30A.

“The whole process smacks of irregularities and should be referred to Minister Barbara Creecy’s office for comment,” he said

David Hallowes of the groundWork environmental justice group said: “This looks like an entirely illegitimate use of S30A since there is no relationship between the designated disaster and the use of the power ships, and the rationale given by Karpowership is wafer-thin. Rather, it appears that they have used the State of Disaster to avoid proper planning processes and the DEFF has colluded with them in doing so.

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“We have seen the State of Disaster used to short-cut processes and people’s participation in several other cases. This is the most egregious abuse thus far. It also seems that this permission has been granted ahead of the procurement process,” he said.

Daily Maverick sent detailed questions including the role that its director Sonnyboy Bapela played to Creecy’s department on 4 August, but no substantive response has been received. Acknowledging receipt, spokesperson Peter Mbelengwa remarked that some officials were not working from the office daily due to Covid-19, delaying the response process.

Eskom spokesman Sikonathi Mantshantsha said: “The matter you are raising belongs to the Department of Mineral and Energy Affairs, and you are cordially advised to direct your questions to the DMRE.”

But the energy department said: “Most of your questions are DEFF specific and should be referred accordingly. Nor can the DMRE comment or respond to questions based on hearsay.”

In contrast, Karpowership SA responded to all questions, denying that the company or its officials acted in an underhanded manner.

Asked to clarify why it had applied for Section 30A exemption when no Eskom contract had been signed or awarded yet, the company asserted that a contract was not a requirement for a directive to be issued.

The company’s Africa and Asia sales director,  O’Driscoll, said the Section 30A directive had been issued to his company by the designated DEFF official, Mr S Bapela.

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On whether factual evidence was submitted to substantiate that the project was part of a “life-saving/genuine emergency”, the company said: “The application covers the economic and health crisis arising from the Covid-19 pandemic. Karpowership South Africa’s response will be critical to mitigating and containing the impact of the disaster. The factual evidence submitted by Karpowership includes: studies on impact of healthcare facilities of lack of power supply;  pronouncements from government on the pandemic; daily statistics showing trend of effect of Covid and NICD projections on infections and deaths and Eskom’s supply-side failure and load shedding up to August 2021.”

On whether the company and Plomp were using Section 30A as a convenient legal loophole to evade environmental scrutiny under cover of the Covid-19 disaster, O’Driscoll said:  “Karpowership strongly denies any suggestion of impropriety or utilising convenient legal loopholes in obtaining this directive. Karpowership has at all times been in compliance with the regulatory framework in South Africa and will continue to do so.”

He said no contracts had been awarded to his company at this point, but if successful, the ships could be operationally deployed within eight to 10 weeks.

“Karpowership has publicly stated on several occasions that it can provide an all-in cost of power below R1.70 kWh if contracted.”

By comparison, local energy experts say Eskom is paying more than R3.50 kWh for emergency peaking power generated by diesel-powered open cycle gas turbines, whereas the cost of new solar plants could provide power at a cost of between 60 – 80 c/kWh and wind power at a cost of between 70 – 90 c/kWh.

Asked to clarify why it had applied for Section 30A exemption when no Eskom contract had been signed or awarded yet, the company asserted that a contract was not a requirement for a directive to be issued.

Though it was not in negotiations with the government, the company wanted to be ready as soon as South Africa sought to procure emergency power. The company was also invited to explain how power ships could ameliorate or contribute to the management of Covid-19 and whether power would be fed to health facilities alone, or into the national grid for primarily industrial consumption.

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O’Driscoll responded: “Although the energy crisis is not new, the need for a reliable and sustainable power supply is required to safeguard critical infrastructure and maintain industry such as the manufacturers and industries that support the medical fields. 

“This is critical in terms of immediate and emergency efforts to ameliorate the impact of Covid-19. The increased supply of medical PPE equipment (particularly for frontline workers), oxygen supplies and waste removal, for example, all require a steady electricity supply to maintain and manage the demand on their products.

“The power would be supplied into the national grid to provide secure electricity supply, which would mitigate the risk of load shedding on these critical support industries as well as health care facilities… This potential project will assist the government in its efforts to ameliorate the impact of Covid-19 which will have the overall effect of saving lives during the pandemic. It is also vital for post-Covid-19 national recovery strategies.”

Finally, Karpowership was asked to clarify its relationship with local energy entrepreneur Sechaba Moletsane.  The company said Moletsane was a local development partner and was “currently in the process of becoming a non-executive director of Karpowership South Africa”.

“He has experience in the South African renewable energy sector, serving as a member of the boards of G7 Renewables and Metrowind. He worked with Deloitte on numerous projects under the Renewable Energy IPP Procurement Programme and is a member of the Black Energy Professionals Association.”

Moletsane confirmed he saw the written questions sent to Karpowership and that he had input relating to his relationship with the company.

Concerning the approval process by DEFF, Moletsane said he played no role in the Section 30A approval.

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