Putting into action the new powers for the minister of electricity approved by President Cyril Ramaphosa in January, Kgosientsho Ramokgopa has issued a determination in the Government Gazette for SA to procure 2,500MW of nuclear power.
The memorandum of understanding issued by the presidency, clarifying the roles of the ministers of electricity and of public enterprises, gave the electricity minister authority over the board and management of Eskom for ending load-shedding.
Ramokgopa was also given responsibility for the procurement of new generation capacity, overseeing the implementation of the Eskom generation recovery plan to ensure the generation fleet performs optimally, and developing and agreeing on financing models and options for the transmission grid.
The electricity ministry said the determination to procure nuclear power was originally issued by mineral resources and energy minister Gwede Mantashe, which triggered the requirement for concurrence from the national energy regulator (Nersa).
“Following the president’s assignment of powers to the [minister of electricity] the... authority to issue determinations was transferred to Ramokgopa, making him the successor in law to the original notice,” the ministry said.
Mantashe issued the ministerial determination on the procurement of 2,500MW of nuclear generation capacity in 2021, which Nersa agreed to subject to certain suspensive conditions.
Ramokgopa previously said the mineral resources and energy department satisfied the suspensive conditions and Nersa then issued a formal concurrence for the procurement of the 2,500MW in September last year.
However, to enable the request for proposals to be put to market the Nersa concurrence had to be promulgated by Ramokgopa through gazetting, which happened on Friday.
Now that this has been done government can open a bidding round for nuclear energy.
A representative told Business Day that while Ramokgopa’s powers required him to issue the determination, the DMRE was still in charge of the procurement process and it would issue the request for proposals.
Business Day previously reported that the DMRE planned to issue the request for proposals in March. According to the electricity ministry the DMRE will soon issue procurement timelines, but they still expected a request for proposals to be issued during the first quarter of this year.
Given that the build time of new nuclear power facilities can range from 10 to 12 years or even longer, the power to be procured is expected to start coming online only from about 2033.
SA’s sole nuclear power station, Koeberg, has an installed capacity of about 1,800MW, meaning an additional 2,500MW (which is equivalent to about two-and-a-half stages of load-shedding) would more than double SA’s nuclear generation capacity.
“Cabinet decided the 2,500MW was to be procured at a pace and modular scale the country can afford.
“[The request for proposals] will enable bids for conventional reactors (similar to Koeberg) as well as small modular reactors. The final affordability will be determined on the basis of the financial modelling of bids received,” the electricity ministry said.
According to the determination, Eskom will be the generator of the energy produced but may do so in partnership with any other juristic entity. Eskom, or one of its entities that will be created through the unbundling process will also be the buyer of the electricity.
Having Eskom as the generator, instead of an independent power producer, raises some questions about the financial viability of the proposed nuclear build given that National Treasury does not want Eskom to spend money on new generation projects. This was among the conditions set for the three-year R254bn Eskom debt relief arrangement announced by Treasury last year.
Treasury will also, ultimately, weigh in on the affordability of a new nuclear build plan for SA.
A previous attempt by government to procure 9,600MW of nuclear power failed.
The late Tina Joemat-Pettersson, when she was minister of energy in 2016, made the decision to have the department acquire nuclear power to generate 9,600MW of electricity. The deal with Russia to introduce six power plants, which would have cost the country R1.2-trillion, was later ruled invalid after being challenged by NGOs.
This new determination for 2,500MW of nuclear power was issued in terms of the Integrated Resources Plan (IRP) of 2019.
The draft IRP 2023, which will replace the 2019 version, does not foresee new generation capacity from nuclear to be added by 2030, however, in one of the scenarios for the 2030 to 2050 period the plan proposes rolling out more than 14,000MW of new nuclear power.
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