Another nail in the coffin for doomed Khanyisa private coal plant project

18 February 2020 - The expiry of one of its key operational licences is the latest major setback for developer ACWA Power’s proposed Khanyisa coal-fired power station in the Mpumalanga Highveld.

This private coal power project, like the other projects conceived as part of the now outdated 2014 Coal Baseload Independent Power Producer Procurement Programme (“the Coal IPP Programme”), has been plagued by obstacles over the past few years. These include the withdrawal of funding by a number of commercial banks under pressure to stop funding coal power, and a barrage of legal challenges by civil society organisations of the multiple authorisations required for these projects.

In one of these legal challenges, environmental justice group groundWork, represented by the Centre for Environmental Rights, has challenged Khanyisa’s environmental authorisation in the Pretoria High Court. groundWork is asking the court to set aside the then Minister of Environmental Affairs’ decision to issue ACWA with an environmental authorisation without conducting a legally-required climate change impact assessment.

Recently, the Department of Environment, Fisheries and Forestry (DEFF) ruled that Khanyisa’s environmental authorisation had lapsed on 31 October 2018, and that the activities it undertook in relation to the project were unlawful.

ACWA disputes the DEFF’s ruling.

Without a valid environmental authorisation, ACWA cannot legally commence building the power plant. It also cannot reach commercial or financial close under the Coal IPP Programme without an environmental authorisation, risking its “preferred bidder” status under the Coal IPP Programme.

On 5 February 2020, groundWork amended its court papers to ask the High Court to confirm DEFF’s ruling that Khanyisa’s environmental authorisation indeed expired on 31 October 2018. If this is confirmed by the High Court, ACWA will need to apply afresh for an environmental authorisation for the Khanyisa plant – a process that will likely take several years.

Some of the many reasons why this private coal plant should never be allowed to proceed include:

groundWork Director Bobby Peek points out that: “The 2019 Integrated Resource Plan confirms that private coal power plants do not form part of a least-cost plan for South Africa’s energy future. Khanyisa is a project South Africa doesn’t need, and cannot afford – not only in terms of its financial cost, but because of its negative health and climate implications.”

“Khanyisa’s GHG emissions would exacerbate the climate crisis at a time when South Africa is already dealing with major climate impacts. Our Constitutional right to a healthy environment demands a radical reduction of our reliance on coal for electricity generation, and a clear trajectory towards clean energy”, says Michelle Koyama, attorney at the Centre for Environmental Rights.

The High Court’s pronouncement on the issue of the expired authorisation will clarify whether this is an insurmountable hurdle, and will ensure a permanent halt to this hazardous, dirty and costly project.