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30 April 2021 Our Date: 30 April 2021 Our Ref: 14/12/16/3/3/2/2005 14/12/16/3/3/2/2006 14/12/16/3/3/2/2007 Avena Jacklin GroundWork Attention: Ms Jacklin Subject: RE: Proposed Gas to Power Powership Project at the Ports of Saldanha Bay (Western Cape), Ngqura (Eastern Cape) and Richards Bay (KwaZulu Natal) Dear Ms. Avena Jacklin Reference is made to the comments received by Triplo4 Sustainable Solutions via email on the 31 March 2021. Comments are made in response to groundWork comments. groundWork comments are captured in italic text, followed by our response: 1. groundWork submits these comments on Karpowership (Pty) Ltd’s draft Environmental Impact Assessments and Specialist Reports (DEIR) of the proposed gas to power via powership projects (the “projects”) located at the Port of Saldanha Bay (Western Cape), Port of Ngqura (Eastern Cape) and Richards Bay (KwaZulu Natal). These build on the comments we submitted on the Projects Scoping Report. 2. groundWork has a particular interest and expertise in environmental justice issues, and a long- standing history of working with, and representing, the interests of historically disadvantaged communities within South Africa. 3. Our concerns related to the Environmental Impact Assessments (hereinafter the ‘EIA’) and Specialist Reports fall into the following categories: 4. Need 5. Costs 6. Climate change impacts 7. Air quality impacts 8. Marine impacts Triplo4 Sustainable Solutions (Pty) Ltd, a Level 1 B-BBEE Contributor ISO 9001 & 14001 Certified KZN North Coast Tel: 032 946 3213 | Fax: 032 946 0826 | E-mail: [email protected] Suite 5, The Circle Business Centre, Douglas Crowe Drive, Ballito 4420 | PO Box 6595, Zimbali, 4418 Reg No. 2011/124251/07|Director: AJ Plomp | www.triplo4.com 2 9. Noise impacts 10. Socioeconomic impacts 11. Participation and landowner consent 12. Severe hazard risks 13. Risk of failure 4. Need and consideration of alternatives a. It is a legal requirement that alternatives must be considered as a part of the EIA process. In terms of alternatives, the Environmental Impact Assessment Regulations, 2014 require that it must address not only the location alternatives, but that it must consider alternatives in terms of the type, design, layout and technology of the activity, and different means of meeting the general purpose, including not implementing the activity.1 Despite this, in the DIER, there are only consideration of alternative sites, and there are no details of alternative technologies having been considered in terms of the alternatives to gas (type and technology). This falls foul of the EIA process as the project is presented as a foregone conclusion. As will be indicated below, gas and the pipelines associated with it poses significant risk not only in terms of health, environment and climate change, but significant financial risk, as this project is proposed as a long term gas project. Moreover, there are alternative renewables which are cost efficient with lower risk in terms of long-term energy procurement. Response: The identification and assessment of alternatives as part of Scoping and Environmental Impact Reporting is for the most part regulated by S24(4)(b) of NEMA and the reporting requirements prescribed in Appendices 2 and 3 of the EIA Regulations, 2014 read with the definition of “alternatives” in Regulation 1. However, it is also evident from Section 24O(1)(b)(iv) of NEMA that the alternatives considered by the competent authority need only be “reasonable and feasible”. Thus, it is not mandatory for every type of alterative described in Regulation 1 to be included in the EIA process where such alternative is not reasonable and feasible. This would include an alternative project or technology type such as renewable energy, which Karpowership would not be able to implement and which is explained in Section 3 of the EIA Report. Further, the second part of Section 24O(1)(b)(iv) of NEMA requires the competent authority to consider “any feasible and reasonable modifications or changes to the activity that may minimise harm to the environment” and thus requires the applicant to show how it can either avoid the impact completely, or adopt measures to minimise harm to the environment. These modifications and changes are described in Sections 2, 3, 8 and 9 of the EIA report, as well as the EMPr. 4.1. The no go option: The no-go option discussions in the EIAs state, “While the no-go alternative will not result in any negative environmental impacts, it will also not result in any positive socio-economic benefits. It will also not assist government in addressing its set target for a sustainable energy supply mix, nor will it assist in supplying the increasing electricity demand within the country…Hence the “no-go” alternative is not the 3 preferred alternative.”2 This shallow assessment, backed by no clear harm and benefit analysis, fails to consider the possibility that alternative energy technologies with far fewer social and environmental impacts could be used to respond to this rising energy demand. It also fails to consider the cost savings that these alternatives would provide in comparison with the project option over twenty years. Response: We disagree that the assessment of the no-go-option is “shallow”. The assumption made by groundWork that the proposed Karpowership project, if approved, precludes alternative energy technologies, presumably a reference to renewable energy projects, is misinformed. Groundwork have failed to make specific reference to what part of this policy document they rely upon. Government’s Integrated Resource Plan (IRP), 2019 provides an energy mix that includes an addition of 3000 MW of gas- and diesel- powered electricity generation onto the South African National Electricity Grid by 2030 to meet the projected national energy demands. In accordance with the Ministerial Determination gazetted on 7 July 2020, the Minister of Mineral Resources and Energy, in consultation with the National Energy Regulator of South Africa, has determined that the Department is to procure 2000 MW of new generation capacity from a range of energy source technologies. The Risk Mitigation IPP Procurement Programme (RMIPPPP) has been designed by the Department in order to fulfil the Minister’s directive. Its objectives are to fill the current supply gap, alleviate the current electricity supply constraints and reduce the extensive utilisation of diesel-based peaking electrical generators. Karpowership’s natural gas projects at Richards Bay, Ngqura and Saldanha Bay are three of the eight that were selected as preferred bidders on 18 March 2021. The other remaining five projects are solar, wind and battery-storage operated projects (i.e., predominantly renewables). Projects selected for the 20-year power purchase agreement under the RMIPPPP must be able to operate between 5:00 and 21:30, have load-following ability, and must be connected to the grid before August 2022. Cost was also a key factor considered and apart from one of the hybrid projects, the three Karpowership’s Coega and Richards Bay projects were the second and third cheapest with Saldanha being the sixth cheapest. The Minister has also subsequently issued the request for qualification and proposals for the Renewable Energy Independent Power Producers Procurement Programme (REIPPPP) window 5. For these reasons, the flaws in the EIA report are unfounded and alternative renewable energy technologies have not been considered as part of the no-go option. 4.2. The country’s energy ‘emergency’ has been created through poor decision-making skewed towards fossil fuels development. Attempts to resolve the ‘emergency’ through additional fossil fuel investments, dependent on the whims of global energy markets, will dig a yet deeper hole and put a just transition to a low carbon economy further out of reach. Signing a 20-year contract to procure power from Karpowerships is effectively locking in gas for that time, crowding out space for ever-cheaper and more reliable clean energy, and exacerbating the climate crisis. Karpowership SA compiled and submitted a bid, for this project, to the IPPO and DMRE that was in compliance with the requirements of the RMIPPP RFP. As such, Karpowership, amongst various other 4 requirements, complied with the requirement in the RMIPPP for a 20-year PPA. Please therefore refer to the "The Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) in Context as published by the Department of Mineral Resources and Energy (https://www.ipp-rm.co.za), which elaborates on the Government's selection criteria and strategy for awarding these projects with preferred bidder status. 4.3. According to the IRP, gas is not meant be considered as the main source of energy, but only compliment other sources. This will result in the hardwiring of expensive power at higher rates. The Karpowership generators are expected to burn LNG from 05h00 to 21h30 (more than 70% of the time) which equates to huge throughput of gas in comparison to peaker plants, which run at less than 5% of the time to supplement the energy deficit. Other analyses, such as work published by Meridian Economics in 2020, reiterate the lack of need and desirability of gas-powered energy like these powerships in terms of both cost and climate impacts, particularly in the time frames and with the contractual obligations of these projects.3 Response: The IPP Office and the DMRE received 28 Bids as part of the RMIPPP on 22 December 2020. Of these 28 projects, the Karpowership SA project was 3 of the 8 successful bids announced by the DMRE on 18 March 2021. Please refer to the "The Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) in Context" as published by the Department of Mineral Resources and Energy (https://www.ipp- rm.co.za), which elaborates on the selection criteria applied in evaluating these projects.
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