By Lehlohonolo Lehana.
State owned power utility Eskom is working with National Treasury to create a funding plan for a gas-power station to be built in Richards Bay, Kwazulu-Natal.
This follows Mineral Resources and Energy (DMRE) minister Gwede Mantashe’s approval of Eskom request to build a 3 000 megawatt (MW) gas power station in Richards Bay.
The project is expected to be completed in 2028 at the latest and will generate enough energy to mitigate at least three stages of load shedding.
The approval comes after Nersa rejected the very same request in December because, it argued, Eskom followed the wrong process and did not need its concurrence.
The regulator now sits with two conflicting decisions and will approach the High Court to set aside the first, since Nersa lacks the power to overturn its own decision.
Recently the regulator decided to concur with Mantashe’s approval of an Eskom request to build a 3 000 megawatt (MW) gas power station in Richards Bay.
This bizarre turn of events comes after Nersa based its rejection on outdated regulations, according to Nhlanhla Gumede, full-time regulator member for electricity.
The Energy Intensive Users Group, whose members include AngloAmerican, Sasol, and Rand Water, previously said that the gas-fired power stations will be incredibly important with the introduction of renewable energy sources.
It said that gas-fired power can be turned on and off at short notice and can help supplement the intermittent supply of solar and wind power.
However, Minerals Council SA said that it was worried about the cost as Eskom will have to pay for imported gas.
Considering the volatility of the rand – which recently hit an all-time low against the dollar – the price of producing electricity could fluctuate constantly, Minerals Council SA said.
The proposed power station could also hit further bureaucratic issues following the new powers given to Electricity Minister Kgosientsho Ramokgopa.
Ramokgopa will now have the power to direct the procurement of new generation capacity and ensure the security of supply.
He will thus have all the powers contained in Section 34(1) of the Electricity Regulation Act, which were previously held by Mantashe.
This will provide a single point of command for the government’s efforts to close the shortfall in electricity supply,” the presidency said.
“The minister [Ramokgopa] will work full-time with the Eskom board and management to end load-shedding and ensure that the Energy Action Plan announced by the President is implemented without delay.”
Eskom will now also have to deal directly with three separate ministers – Ramokgopa, Mantashe and public enterprises minister Pravin Gordhan.