DNG Power welcomes court decision on Karpowership

DNG Power has welcomed the decision of the High Court in Pretoria to grant its request for the postponement of the main matter initiated in April 2021

Application was brought in order to set aside the irregularities of the adjudication of the relevant bid submissions and the selection of preferred bidders in the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) by the Department of Mineral Resources and Energy. Court has held that it is in the interest of justice not to proceed with the hearing of the main application as brought by DNG.

The matter will be heard in November and December 2021. Aldworth Mbalati, Group Chief Executive Officer of DNG Energy says, “This is positive news for DNG, and it will ensure that the Court is provided with a full and accurate record of evidence. We have faith in our case but requested a postponement on a pragmatic basis when it became clear that direct and material information will come to light from current investigations. We believe that the court should have access to that information. Moreover, the outcome of these investigations has the ability to significantly narrow the issues upon which the court has to make a decision.

“We, as DNG advanced an Application for a Postponement out of a belief that the case is not ripe for hearing in that vital and pertinent information is yet to come to light as a result of various processes in relation to the RMIPPPP not having been concluded as of yet, which processes we only became aware of as recently as mid-August. Our belief, which the court echoes are that the hearing of the main matter should be and now is postponed to late November, in order to allow for the outcomes of these processes to be finalised and/or to allow the processes to progress to a more advanced stage, thereby allowing the court to be provided with a full and accurate record of evidence.”

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Gas-to-power options emerge on South African energy scene

As South Africa races against the clock to fill an electricity supply gap of some 2 000MW between 2019 and 2022, gas-to-power projects will play a significant role.

Government’s recently launched risk mitigation independent power producer procurement programme (RMIPPPP) has stirred the interest of a number of private players in the gas-to-power sector, according to Nicola Rump, principal environmental scientist at SRK Consulting.

“While the longer-established renewable energy independent power producer procurement programme (REIPPPP) is delivering considerable results in solar and wind energy generation, we are now seeing an exciting start in exploring the potential of gas in South Africa’s energy mix,” says Rump.

She notes that the field of gas-fired generation in the country has previously seen little activity from private developers. This was now changing fast, as the Department of Mineral Resources and Energy prepares to begin evaluating RMIPPPP project bids by the end of 2020. With South Africa’s power system being so constrained, government is wanting these projects to start feeding the national grid by mid-2022. SRK is currently conducting a number of environmental impact assessments (EIAs) for gas-to-power projects in the Eastern Cape and KwaZulu-Natal.

Key aspects of the planning process for these projects, she says, include EIAs and related licencing requirements. Within the tight timeframes envisaged, these need to be carefully managed to avoid becoming stumbling blocks.

“The introduction of strict timelines for the EIA process in recent years means that while EIAs are generally completed in less time than before, the process leaves very little time for accommodating any changes to the project design.”

Nicola Rump, principal environmental scientist at SRK Consulting

It also requires that a significant amount of work must be completed before the application is actually lodged with the regulator. “Gas-to-power projects need to submit a final scoping study to the Department of Environment, Forestry and Fisheries (DEFF), and this must be approved before the EIA phase can begin,” Rump says. “Once the final environmental impact report (EIR) has been submitted, DEFF would decide on the conditions applying to the authorisation.”

While an important attraction of gas is its lower carbon footprint than coal, South Africa’s dominant fuel source for energy, it is not without its environmental impacts. These include carbon emissions, for which projects would require an air emission license before proceeding.  

“Climate change impacts are also becoming an increasingly important consideration in these assessments,” said Rump, “especially in the light of South Africa’s commitments to global climate change and greenhouse gas emission agreements – and its emission reduction targets.”

Other impacts include noise and traffic, as well as effects on the marine ecology of those projects requiring marine infrastructure. Currently, gas-to-power projects tend to be close to ports to facilitate the supply chain from sea-borne liquified natural gas (LNG).

She noted that current projects will have to overcome South Africa’s lack of gas pipeline infrastructure, basing their viability on LNG sources being shipped in. Among the advantages of developing a fledgling gas-to-power sector through the RMIPPPP is that this would contribute to the growth of local gas markets – helping pave the way for the installation of costly gas infrastructure. This is turn would hopefully reduce the cost of gas as a fuel and spur the uptake of this cleaner fuel in South Africa’s energy landscape.

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