(Bloomberg) -- Karpowership, the Turkish company seeking to supply more than 1,200 megawatts of power to South Africa, said its appeal to overturn an environmental ruling against its plans has failed in another blow to the country’s attempts to resolve an electricity crisis.
The company, which supplies ship-mounted gas-fired power plants, will be allowed to correct “perceived gaps” in its application and resubmit, it said in a statement sent to Bloomberg on Sunday.
Karpowership in March last year won more than 60% of an emergency power tender to secure 2,000 megawatts of electricity to ease shortages that have plagued South Africa since 2008. While the companies were originally meant to commence supply this month, projects equivalent to only 7.5% of that total have concluded their financial arrangements and are more than a year away from commissioning.
Environment Minister Barbara Creecy last year dismissed Karpowership’s initial application after activists lodged complaints about its impact on fishing, local ecosystems and potential greenhouse-gas emissions.
“We respect Minister Creecy’s exercise of her powers, but we are very disappointed with the outlook especially given the time it took to make a decision,” Karpowership said. The company will refile its submission and hopes “that the process will be much timelier than it has been to date,” it said. Karpowership filed its appeal in July last year.
Karpowership wants to moor its powerships in three South African ports - Richards Bay on the east coast, Ngqura on the south coast and Saldanha Bay on the west coast.
“There are various gaps and procedural defects” in the applications, Creecy said in three separate rulings on the sites. “These gaps in information and the procedural defects are material and fatal and cannot be cured during the current appeal process.”
Last month, South African President Cyril Ramaphosa announced changes to legislation to encourage private developers to supply the electricity that state utility Eskom Holdings SOC Ltd. has failed to. The country is on course for its worst year of power cuts with outages of as much as 6,000 megawatts, roughly a fifth of demand, imposed for several days last month.
“South Africa needs dispatchable power now,” Karpowership said. “We remain committed to being part of South Africa’s energy security solution and are ready to deploy our Powerships immediately.”
The amount of electricity the company plans to supply could meet the needs of more than 800,000 homes. At the time of its selection, the 20-year deal was valued at 218 billion rand ($13 billion) by the Council for Scientific and Industrial Research, a state agency. Gas prices have since surged.
Other companies that won emergency supply contracts include TotalEnergies SE, Electricite de France SA, Scatec ASA and Acwa Power Co. The project TotalEnergies is backing also uses liquefied natural gas. Scatec, which won three bids to provide a combined 150 megawatts of solar and battery storage electricity, is the only company to have signed power-purchase agreements with Eskom.
Karpowership still needs permission from the Department of Public Enterprises to moor its ships in South African ports. It’s also embroiled in a court case with a losing bidder.
(Updates with comment from minister in seventh paragraph)
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