Nu­clear deal brought to its knees

With the scrap­ping of all agree­ments, one thing is sure: restart­ing the process will need time and the pub­lic’s say

CityPress - - Business & Tenders - DE­WALD VAN RENS­BURG de­wald.vrens­burg@city­press.co.za

This week’s West­ern Cape High Court judg­ment, which set aside gov­ern­ment’s at­tempts to se­cure nu­clear en­ergy, has cut the pro­cure­ment pro­gramme off at the knees, ac­cord­ing to Adrian Pole, the en­vi­ron­men­tal lawyer who led the case.

He rep­re­sented non­govern­men­tal or­gan­i­sa­tions (NGOs) Earth­life Africa and the SA Faith Com­mu­ni­ties’ En­vi­ron­ment In­sti­tute (Saf­cei), which had em­barked on a joint court bid to stop gov­ern­ment’s nu­clear ex­pan­sion plans in Oc­to­ber 2015.

The rul­ing also guar­an­tees that gov­ern­ment will face a long, drawn-out process to restart it, he added.

Two ma­jor build­ing blocks lead­ing up to power util­ity Eskom’s planned re­quest for pro­pos­als to nu­clear ven­dors this year have been de­clared un­law­ful and un­con­sti­tu­tional, forc­ing the gov­ern­ment to go back to square one.

An ap­peal is likely, but that would still sig­nif­i­cantly de­lay ex­ist­ing plans to pro­cure new nu­clear power sta­tions.

Judge Lee Boza­lek ruled on the ev­i­dent push to get a pro­cure­ment pro­gramme with Rus­sia go­ing with min­i­mal over­sight or pub­lic par­tic­i­pa­tion. Boza­lek set aside the fol­low­ing:

The two min­is­te­rial de­ter­mi­na­tions, set by for­mer min­is­ter of en­ergy Tina Joe­mat-Pet­ters­son, that South Africa should pro­cure 9 600 megawatts of nu­clear power and that Eskom should be the pro­curer.

The in­ter­gov­ern­men­tal agree­ment with Rus­sia that, ac­cord­ing to this week’s rul­ing, was never the in­nocu­ous and non­bind­ing agree­ment that gov­ern­ment made it out to be, but in­stead locked South Africa into a num­ber of prob­lem­atic con­ces­sions to the Rus­sians.

Eskom’s re­quest for in­for­ma­tion, is­sued in De­cem­ber 2016. The re­quest for pro­pos­als from nu­clear ven­dors – planned for this year – is now cer­tain to be can­celled too.

Earth­life Africa and Saf­cei had taken gov­ern­ment to court on a num­ber of tech­ni­cal le­gal points re­gard­ing the min­is­ter’s de­ter­mi­na­tions and the agree­ment with Rus­sia.

The de­ter­mi­na­tions form the very ba­sis on which the nu­clear pro­gramme has been mooted.

Le­gally, the en­ergy min­is­ter has to is­sue de­ter­mi­na­tions to au­tho­rise elec­tric­ity in­fra­struc­ture, based on what its draft en­ergy pol­icy – known as the In­te­grated Re­source Plan (IRP) – says the coun­try re­quires.

Apart from the nu­clear ones, there have been de­ter­mi­na­tions lead­ing to the coun­try’s re­new­able en­ergy pro­gramme as well.

The nu­clear de­ter­mi­na­tions were set aside be­cause the Na­tional En­ergy Reg­u­la­tor of SA (Nersa) sim­ply rub­ber-stamped them in­stead of launch­ing a pub­lic par­tic­i­pa­tion process, which the judge said was more than jus­ti­fied.

“The de­ci­sion to for­mally ex­pand the nu­clear pro­cure­ment pro­gramme to 9 600MW must surely rank as one of the most im­por­tant de­ci­sions taken by Nersa in the re­cent past,” said Boza­lek in his judg­ment.

Asked how the state may go about restart­ing the nu­clear new build pro­gramme, Pole said it was a com­plex ques­tion.

He said if gov­ern­ment chose to ap­peal the rul­ing and lost, a new de­ter­mi­na­tion would have to be is­sued by the en­ergy min­is­ter.

“If you do a new de­ter­mi­na­tion, you would need to con­sider new in­for­ma­tion. This would in­clude the yet-to-be fi­nalised new IRP,” said Pole.

This plan is it­self at the cen­tre of a ma­jor storm be­cause of the al­legedly ar­ti­fi­cial lim­its it places on re­new­ables. In do­ing so, the plan favours nu­clear.

A new IRP could very well call for nu­clear again – or even for more nu­clear than be­fore.

The NGOs had asked the court to con­sider the fact that the nu­clear de­ter­mi­na­tions were still based on the old 2010 IRP, but the judge said this was not nec­es­sary to con­sider. Restart­ing a nu­clear pro­gramme would also re­quire more in­for­ma­tion to be placed in the pub­lic do­main, said Pole. Nersa would need to sub­ject any new de­ter­mi­na­tion to a pub­lic par­tic­i­pa­tion process. By law, de­ter­mi­na­tions re­quire rel­e­vant in­for­ma­tion, such as the pos­si­ble costs, to be made avail­able.

Tech­ni­cally, the same flaw that killed the nu­clear de­ter­mi­na­tions this week could be used against the re­new­ables de­ter­mi­na­tion, which has a sig­nif­i­cant en­emy in Eskom as well as the unions with coal sec­tor mem­bers.

How­ever, Pole says this is un­likely to hap­pen be­cause that de­ter­mi­na­tion was made in 2012 and the Pro­mo­tion of Ad­min­is­tra­tive Jus­tice Act gives you 180 days to ap­ply to re­view a de­ci­sion. The state now has 15 days to ap­peal the judg­ment, but Pole says it could hit a hur­dle if it does so. Since the main fault lies with Nersa, and Nersa never op­posed the ap­pli­ca­tion to be­gin with, it could be an in­ter­est­ing le­gal chal­lenge to ap­peal, said Pole.

Busi­ness Lead­er­ship SA (BLSA) wel­comed the rul­ing, stat­ing: “Once again the rule of law has tri­umphed in South Africa. The BLSA ap­plauds this rul­ing, par­tic­u­larly given that the nu­clear new build pro­gramme was a red flag for rat­ings agen­cies. Fitch had cited it as cen­tral to the de­ci­sion to re­move for­mer fi­nance min­is­ter [Nh­lanhla] Nene and re­cently stated it contributed to the dis­missal of for­mer min­is­ter [Pravin] Gord­han.

“BLSA has also noted and sup­ported the clear find­ings of the IRP, which sug­gest South Africa does not need a R1 tril­lion nu­clear plan. In our cur­rent low-growth en­vi­ron­ment, the costs and af­ford­abil­ity of a nu­clear pro­gramme will strain pub­lic fi­nances al­ready un­der pres­sure.”

The newly launched SA Fed­er­a­tion of Trade Unions said the nu­clear deal, be­fore it was halted, was another ex­am­ple of gov­ern­ment hav­ing sub­verted demo­cratic pro­cesses by not re­fer­ring the deal to Par­lia­ment for en­dorse­ment or hold­ing any pub­lic de­bate on it. It was an agree­ment which it had al­ready re­ferred to as a done deal with Rus­sian com­pa­nies.

Min­is­ter of En­ergy Mmamoloko Kubayi said she had di­rected her depart­ment to study the judg­ment.

Kubayi con­firmed that in­ter­gov­ern­men­tal agree­ments had been signed between South Africa and the US, South Korea, China, Rus­sia and France.

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