Powerships can generate electricity in a cost-effective way © Karpowership
Powerships can generate electricity in a cost-effective way © Karpowership

SA turns to 'powerships' to address energy problems

25 March 2021

South Africa’s Department of Mineral Resources and Energy (DMRE) has named Karpowership SA (KPSA) as preferred bidder for a contract to develop floating power stations in several of the country’s ports.

The country has turned to the idea of “powerships”, which are powered by LNG and generate electricity, to alleviate its power supply problems.

The country’s Risk Mitigation Independent Power Producer Procurement Programme will lead to the purchase of three powerships.

Gwede Mantashe, minister for mineral resources and energy, said the ships would be located in the ports of Coega, in the Eastern Cape, Richards Bay in KwaZulu-Natal, and Saldanha in the Western Cape.

Powerships are considered to be a cost-effective means of generating electricity as each ship contains its own generation, electrical control, and substation.

The ships can be quickly connected to the national grid.

KPSA is a subsidiary of Turkish holding company Karadeniz Energy Group. It said its South African operation was 49% black-owned and promised to employ local procurement to benefit South African communities.

Government ministries have been urged to use black-owned businesses where possible.

In a parallel procurement programme by DMRE to contract independent power producers to generate wind and solar energy, it said one of its priorities was to “enable meaningful participation of black people in the economy”.

The ministry said the contracts would be key to stimulate the development of the economy and address South Africa’s socio-economic challenges.

The RFP for the programme would aim to achieve “a substantial change in the racial composition of ownership and management structures and in the skilled occupations of existing and new enterprises”, said DMRE.

It also hoped to increase the extent to which black women in particular own and manage existing and new enterprises, and improve their access to economic activities, infrastructure and skills training.

KPSA said: “As part of our commitment to the South African government’s just energy transition, KPSA has committed to ensure that at least 65% of its workforce will be South African, employed from local communities.

“Karpowership SA will benefit from the global alliance of its parents with well-established and reputable brands such as Shell as our exclusive LNG supplier, and Mitsui O.S.K. Lines from Japan, a world leader in LNG shipping industry, KPSA can assure a smooth transition to efficient and reliable electricity in South Africa at the most competitive cost.”

 Want to stay up to date with the news? Sign up to our daily bulletin.

CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates