SA DUMPS HY­DRO FOR NU­CLEAR

This de­spite rec­om­men­da­tions that the plants could be­come very ex­pen­sive white ele­phants R850m The es­ti­mated cost of ‘fur­ther re­search and devel­op­ment on nu­clear power’. Tina Joe­mat-Pet­ters­son said this amount had been al­lo­cated to her de­part­ment and its

CityPress - - Business - MOYAGABO MAAKE moyagabo.maake@city­press.co.za

The en­ergy de­part­ment ad­mit­ted this week that an am­bi­tious hy­dropower project had been placed on the back burner as fo­cus shifted to widely crit­i­cised plans to em­bark on a nu­clear build pro­gramme. Late last year, the South African and Demo­cratic Repub­lic of Congo gov­ern­ments signed yet another treaty on the Grand Inga hy­dro­elec­tric­ity project (see box). This fol­lowed one signed ear­lier in the year un­der the stew­ard­ship of then en­ergy min­is­ter Dipuo Peters.

But in his state of the na­tion ad­dress ear­lier this year, Pres­i­dent Ja­cob Zuma an­nounced that officials in charge of ad­ju­di­cat­ing myr­iad nu­clear ten­ders were open for busi­ness.

“We ex­pect to con­clude the pro­cure­ment of 9 600 megawatts of nu­clear en­ergy,” he said, be­fore quickly mov­ing on to bio­fu­els man­u­fac­tur­ers.

New En­ergy Min­is­ter Tina Joe­mat-Pet­ters­son, who took over from Ben Martins af­ter the elec­tions, fol­lowed up with a more de­fin­i­tive bud­get vote speech, putting the cost of “fur­ther re­search and devel­op­ment on nu­clear power” at R850 mil­lion.

She said this amount had been al­lo­cated to her de­part­ment and its rel­e­vant agen­cies.

These de­vel­op­ments ran counter to the de­part­ment’s own in­te­grated re­source plan, up­dated in Novem­ber, which has rec­om­mended a de­lay in nu­clear build.

The cost of the coun­try’s nu­clear am­bi­tions has been es­ti­mated at R1 tril­lion, but sim­i­lar projects else­where have been be­set by cost over­runs.

A study by the US de­part­ment of en­ergy showed that, of 75 nu­clear plants where con­struc­tion be­gan be­tween 1966 and 1977, the av­er­age cost over­run was 207%.

The in­te­grated re­source plan rec­om­mended the de­lay af­ter elec­tric­ity de­mand pro­jec­tions were re­vised down­wards from the pre­vi­ous plan pub­lished in 2011.

Pre­vi­ously, peak elec­tric­ity de­mand for 2030 was pro­jected at 67 800MW, but a re­vised eco­nomic and elec­tric sec­tor out­look prompted the en­ergy de­part­ment to scale this down to 61 200MW.

“The nu­clear de­ci­sion can pos­si­bly be de­layed,” reads the in­te­grated re­source plan.

“The re­vised de­mand pro­jec­tions sug­gest no new nu­clear base-load ca­pac­ity is re­quired un­til af­ter 2025 (and for lower de­mand not un­til at ear­li­est 2035).”

The plan also pointed to “al­ter­na­tive op­tions” – such as re­gional hy­dropower that can ful­fil the en­ergy re­quire­ment – and urged fur­ther ex­plo­ration of shale gas be­fore “pre­ma­turely com­mit­ting to a tech­nol­ogy that may be re­dun­dant if the elec­tric­ity de­mand ex­pec­ta­tions do not ma­te­ri­alise”.

In a re­search pa­per, Frost & Sul­li­van en­ergy an­a­lyst Tom Har­ris high­lighted the dan­ger of nu­clear power sta­tions be­com­ing white ele­phants.

“If sig­nif­i­cant in­vest­ments are made in a nu­clear build pro­gramme but de­mand re­quire­ments fail to reach pro­jected lev­els – while in­dus­try be­gins to de­vise al­ter­na­tive so­lu­tions that can be more quickly im­ple­mented – there is a risk that we could wit­ness the com­mis­sion­ing of some­thing of a ‘white ele­phant’ in the en­ergy sec­tor in 2025, and be left sit­ting with a few thou­sand megawatts of ex­cess base-load ca­pac­ity,” said Har­ris.

Ar­gu­ments that ex­cess ca­pac­ity could be ex­ported had no merit be­cause re­gional projects like Grand Inga – which prom­ises to elec­trify sub-Sa­ha­ran Africa – could shrink the coun­try’s pool of buy­ers, ac­cord­ing to Har­ris.

“En­ergy pol­icy mak­ers should re­al­is­ti­cally re­flect on such na­tional and re­gional risks, given that at some level of ex­cess ca­pac­ity, in­dus­try par­tic­i­pants may strug­gle to achieve the re­quired re­turn on in­vest­ment,” he said.

The en­ergy min­istry, on be­half of Joe­mat-Pet­ters­son, did not re­spond to ques­tions on what prompted her to ig­nore the in­te­grated re­source plan and fast-track the nu­clear build pro­gramme.

Tina Joe­mat

Pet­ters­son

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