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Eskom is in discussion with the National Treasury to establish a 3 000 MW gas-fired power station in Richards Bay, KwaZulu-Natal, without incurring additional debt.
This follows approval from the National Energy Regulator of SA (Nersa), which permitted Eskom to proceed with the construction of a gas-fired power station.
Despite the green light from Nersa, environmental groups have raised objections to the project, arguing that crucial information was absent from the application.
As reported by City Press’ Antoinette Slabbert, environmental activists said there had also been insufficient consultation before the project’s approval.
Meanwhile, Eskom said the proposed project could start feeding electricity into the grid by 2028, with a generating capacity equal to three phases of load shedding.
While the Energy Intensive Users Group highlighted the flexibility of gas-fired power generation, the Meridian Economics and the Minerals Council SA expressed concerns about the economic viability due to the potential fluctuation in electricity prices.
In a surprising legal turn of events, Nersa had to reverse its initial rejection of Eskom’s request for technical reasons, leading to a court ruling to overturn its first decision.
Furthermore, due to Treasury’s conditions for an R254 billion debt relief for Eskom, the utility company is restricted from borrowing more funds for new power stations.
Hence Eskom seeking assistance from the Treasure for alternative approaches, potentially considering a public-private partnership or independent power producer model.
Eskom will develop a detailed business plan in due course, but estimates that it will take two years to plan the project, and another three to implement it.
The gas-fired power plant project is not without challenges.
Community-based activist groups legally challenged the environmental approval for the project.
Despite a previous rejection by the Pretoria High Court, the Supreme Court of Appeal has agreed to hear their appeal.
These groups argue for a greater focus on renewable energy. They also expressed concerns about non-renewable power plants’ environmental and health risks.