New Environment Minister Dion George throws potential lifeline to sinking Karpowership deal

Newly appointed Minister of Forestry, Fisheries and the Environment Dion George. (Photo: Gallo Images / Brenton Geach)

By Tony Carnie

1 Aug 2024

Newly appointed Minister of Forestry, Fisheries and the Environment Dion George has ruled in favour of the controversial Turkish powerships proposal for Richards Bay harbour. His decision comes despite strong indications from Electricity Minister Kgosientsho Ramokgopa that the entire Karpowership plan is dead in the water.

In a written decision signed on 17 July, the newly appointed minister of forestry, fisheries and the environment, senior Democratic Alliance party member Dion George, dismissed an appeal by two environmental justice groups against his department’s decision to grant environmental authorisation to Karpowership to moor two powerships in Richards Bay harbour to supply “emergency power” to the Eskom grid.

In his 187-page ruling, George rejected all 15 grounds of appeal by the Centre for Environmental Rights, acting on behalf of groundWork and the South Durban Community Environmental Alliance (SDCEA).

George appears to have been legally obliged to make a ruling on the appeal, even if his decision is rendered academic by other approval hurdles facing Karpowership.

Significantly, however, George’s political party has previously voiced strong criticism of what it described as the ANC government “bending over backwards to ensure that the Karpowership deal is pushed through at all costs”.

Now, George’s decision has raised questions about whether the Turkish company has indeed thrown in the towel for good — or is still hoping to salvage its plans to supply “emergency” powerships in three local harbours (Richards Bay, Saldanha and Coega).

Since the controversial plan surfaced in 2020, the Turkish group has faced a series of legal, environmental, regulatory and procedural battles to gain authorisation for the multibillion-rand proposal.

Karpowership has not responded to questions emailed by Daily Maverick on 31 July on whether it was walking away from the proposal, but TimesLIVE quoted Electricity Minister Kgosientsho Ramokgopa earlier this month saying the Karpowership deal was “off the table”.

Ramokgopa reportedly said: “That [Karpowership plan] has collapsed, they have lost their rights to the grid because they had three years to conclude the deal” and that the government could not create a “special dispensation for [Karpowership], otherwise you are going to open a can of worms because there are many others that lost [bids for the deal]”.

Now, George’s decision has thrown a potential lifeline to Karpowership to pursue the 20-year “emergency” power supply deal by removing obstacles to environmental approval — even though Karpowership has lost Eskom grid access and is still embroiled in legal disputes with its local empowerment partner, Powergroup South Africa, and faces another court case involving the National Energy Regulator’s refusal to disclose the full terms of its decision to grant Karpowership generation licences.

Newly appointed Environment Minister Dion George Newly appointed Minister of Forestry, Fisheries and the Environment Dion George. (Photo: Gallo Images / Brenton Geach)

‘Still needed and desirable’

In his decision, George said: “Load shedding is still very much part of South Africa’s daily existence” and that he was satisfied that the Karpowership deal was still “needed and desirable”.

He said affected parties had 180 days to take his internal appeal decision to court for judicial review.

Reacting to the decision on 31 July, Centre for Environmental Rights (CER) attorney Michelle Koyama said: “We are highly disappointed by the minister’s decision to uphold the appeal, given that South Africans can ill-afford such expensive electricity and the resulting rising costs of basic goods when cheaper [energy] alternatives exist.

“The public and government also cannot afford to continuously pay for damages to people and infrastructure from floods, droughts and other extreme weather events, which will intensify as climate-harming activities such as this persist.

“Gas-to-power projects such as Karpowership release methane — a potent greenhouse gas — which exacerbates climate change. People’s lives, food security, homes and businesses are at stake.

“Even with the environmental authorisation, there are numerous conditions attached before any construction can take place, and Karpowership would have to reapply to Eskom for access to the grid after all authorisations are in place and legal disputes resolved, which is not likely to be anytime soon.

“The period of review is 180 days from the decision and reasons being made available, and we are currently studying the decision and will discuss with our clients the way forward, one of which is a potential review.”

‘Lacking merit’

George dismissed all 15 grounds of the CER appeal as “lacking merit”, while the Istanbul-based Karpowership group, in its submissions to the minister, claimed that groundWork and the SDCEA were “linked to a foreign-funded scheme bent on vilifying natural gas and promoting renewable energy at all costs despite scientific and industry evidence that South Africa cannot rely exclusively on renewable energy”.

The CER raised several grounds of appeal, including a complaint that the Karpowership’s environmental impact assessment (EIA) process was procedurally defective and outdated, considering that the government had raised the possibility of chopping down the proposed 20-year plan to a more costly five-year contract.

The CER also charged that several last-minute changes were made to the EIA report, without affording affected stakeholders a proper opportunity to comment on the changes.

Read more: Karpowership pursues potential gap to refloat Richards Bay project — regardless of civil society appeals

George dismissed this complaint on the basis that the late changes were not “significant” and that the public participation process met legal requirements.

The CER also challenged the apparent agreement by George’s department to “correct deficiencies” in the initial EIA report by allowing Karpowership to strike last-minute agreements with the Ezemvelo KZN Wildlife Agency for a controversial biodiversity “offset agreement”.

This agreement proposes that Karpowership purchase the Madaka Game Ranch near Vryheid to mitigate the residual negative environmental impacts on the Richards Bay marine environment.

The CER argued that such belated proposals defeated the objective of the EIA process to assess and consider negative impacts thoroughly before granting approval.

Karpowership argued in its submissions that the EIA process was “dynamic” and often required changes to the conditions of authorisation.

George remarked that it was not “an uncommon practice” for the regulator to stipulate additional conditions during the final environmental approval process.

Alternative energy solutions

The CER argued that the Karpowership plan was neither “necessary nor desirable” and that George’s department should have required Karpowership’s environmental consultants to assess alternative energy solutions such as wind or solar power.

George, however, stated that the country had experienced major load shedding and the Karpowership proposal “could potentially generate ancillary services which will ready the market for a gas programme and simultaneously support regional gas development and the use of indigenous gas which will likely present further cost efficiencies making South Africa gas competitive.

“I am satisfied that the [Karpowership] project is needed and desirable,” said George.

Responding to the CER’s objection that the EIA process failed to adequately consider renewable energy as an alternative to burning gas, George said he was mindful that the former Department of Mineral Resources and Energy had opted for power solutions that included both renewable energy and gas.

He also cited a court ruling in which the judge suggested that “too hasty a transition to renewable energy may have catastrophic consequences”.

The CER further argued that George’s department failed to adequately consider the climate change impacts of burning gas to generate power for another 20 years.

George said that his department considered Karpowership’s climate impact assessment studies to be sufficient to make informed decisions.

He dismissed objections that air pollution standards in Richards Bay were already being exceeded, arguing that additional emissions from Karpowership were considered to be “very low”.

On the question of powerships generating harmful levels of underwater noise in the marine environment, the minister argued that the additional noise would not add significantly to existing levels in the Richards Bay harbour.

On the controversial plan to mitigate impacts on the marine environment by buying a game ranch 130km inland of Richards Bay, George suggested that the objection to this proposal lacked merit.

Further concerns that the impacts on fish and marine species had not been assessed adequately were also dismissed, with George accepting Karpowership-commissioned studies suggesting that the probability of damage to the marine ecology was “extremely low”.

The CER also contended that Karpowerrship’s “independent” environmental assessment practitioner lacked objectivity and had “over-emphasised” the electricity-generation benefits of the Turkish power plan at the expense of future human generations.

These objections were also dismissed by George. DM

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‘Still needed and desirable’

‘Lacking merit’

Alternative energy solutions