Eskom has announced that Karpowership, a Turkish company specializing in gas-powered power ships, will not be integrated into the South African power grid. Despite being named as one of the preferred bidders in the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) launched by the Department of Mineral Resources and Energy (DMRE) in 2020, the company failed to meet the extended deadline of 31 December 2023.

The RMIPPPP aimed to procure a total of 2,000 MW from various sources, including gas, solar photovoltaic (PV), wind, battery energy storage systems (BESS), and/or hybrid technologies. While 11 preferred bidders were initially announced in 2021, only seven projects have progressed to the construction phase, leaving four projects, including Karpowership, in limbo.

Eskom expressed regret over the expiration of budget quotes for these projects, emphasizing their role in bringing much-needed additional generation capacity to the grid to alleviate power system pressure and minimize the impact of load shedding. The utility company highlighted its commitment to governance processes, stating that projects must be delivered expeditiously within approved timelines, scope, and costs.

The affected budget quotes, with extensions ranging between 20 and 30 months, are no longer valid as of 1 January 2024. Eskom emphasized that the Gemsbok PV and Mulilo Coega Gas to Power Plant, both from a single preferred bidder project, had a combined dispatchable capacity of 200 MW. This loss translates to a total contracted dispatchable energy reduction of 1,400 MW.

Eskom clarified that the grid connection capacity provisionally reserved for these projects would now be reallocated to other projects ready to connect and generate electricity urgently required by South Africa. All affected customers have been informed of the decision, with Eskom advising them to apply for new budget quotes, which will be processed accordingly.

The setback raises concerns about the broader implications for South Africa’s energy security and highlights the challenges faced in implementing crucial projects within the specified timelines. Eskom’s decision underscores the importance of adherence to governance processes and the need for timely project delivery to meet the country’s growing energy demands.