SA’s nuclear industry can be forgiven for being sceptical about government plans to procure 2,500MW of nuclear energy generation capacity in the near future, and they are probably wise in taking a “wait-and-see” approach, says Chris Yelland, energy analyst and MD at EE Business Intelligence.
Deputy mineral resources & energy minister Nobuhle Nkabane this week reaffirmed the department’s plan to move towards procuring 2,500MW of nuclear energy by 2024. This would more than double SA’s nuclear power supply, which now consists only of the Koeberg nuclear plant, with a generating capacity of 1,940MW.
Nkabane said at the Nuclear Technology Imbizo in Cape Town, hosted by the Nuclear Industry Association of SA, the department recognised that nuclear played a “pivotal role as one of the clean-energy sources” SA needed to invest in to achieve net-zero carbon emissions by 2050.
“The silence about the role of nuclear energy in the national climate change debate is of concern,” she said.
However, despite department efforts to speed up new nuclear procurement, industry stakeholders who spoke at the imbizo were cautious in expressing optimism about opportunities that new nuclear projects could unlock for the private sector.
“If companies [in the nuclear industry] have to be completely honest about these new build efforts by government they would say they will ‘wait and see’ before they get ready to participate,” said Sedick Davis, director of engineering programmes at Tractebel, a consultancy business in the water, energy and nuclear industries.
The market was still “sceptical” he said, after derailment of earlier government efforts to procure 9,600MW of nuclear energy.
The government’s nuclear power programme, and procurement processes and co-operation agreements with Russia’s state-owned Rosatom, were set aside in 2017 when the Western Cape High Court found the agreement was unconstitutional and unlawful. The agreements were reportedly negotiated between then-president Jacob Zuma and Russian President Vladimir Putin,
When SA’s “nuclear renaissance seemed imminent”, before 2017, local companies made large investments to prepare for opportunities that would arise from this large-scale procurement of nuclear energy, but when things did not work out many companies “took pain as a result”, said Davis.
Now, with government again forging ahead with plans to expand nuclear capacity, local companies were simply not ready to “make a contribution”.
“Pockets of capability do exist, but if we expect that local companies will be absolutely ready for nuclear opportunities when these opportunities become real this will be naive,” he said.
The industry was right not to get too excited, said Yelland, as there was nothing imminent about SA’s nuclear plans. If procurement does happen by 2024, contracts would probably only be finalised by 2028, and it would then take at least another 10 years to build the power stations, he said.
Mineral resources & energy minister Gwede Mantashe made a determination in terms of section 34 of the Electricity Regulation Act for the 2,500MW of nuclear energy to be procured, for which he needed to get approval from the National Energy Regulator of SA (Nersa). But Nersa has not yet given the final go-ahead for these plans. In August, the regulator “concurred”, or agreed, with the minister’s determination in August 2021, but this concurrence came with “suspensive conditions”, which the department had to address before it could proceed with any procurement.
One of these conditions was that the nuclear build programme “must be at an affordable pace and modular scale that the country can afford”.
Apart from safety concern, one of the main criticisms of nuclear energy is the high capital cost of such projects. But, according to the department’s chief director for nuclear safety and technology, Katse Maphoto, based on 25 submissions it received after it put out a request for information for the nuclear new build programme, “cost is no longer an issue”.
Maphoto said at the imbizo that while the average capital cost of conventional nuclear plants was about $5,000/kW, the cost of new solutions such as small modular reactors is much lower at about $2,800/kW, making the technology more cost competitive with other types of power generation.
Yelland said these costs were not realistic as they did not take into account certain developmental costs, which could add another 10% to the overall cost, or the interest that would accumulate in the time it took to build one of these plants, which could add another 35%.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.