Eskom considers its options

Eskom spokesperson Khulu Phasiwe said that various scenarios for nuclear funding would be explored and the state- owned company hoped that responses from the request for information would help it to refine its request for proposals (RFP).

As part of the RFP, Eskom intended to obtain information from respondents “on the various funding models for the proposed nuclear reactors”.

This will assist Eskom in ascertaining the commercial viability of a nuclear new build programme that “is affordable for Eskom and the country”, he said.

“The actual cost implication would, however, only be properly ascertained by Eskom during the RFP process,” he said. Eskom would embark on “a competitive bidding process” that is “fair, equitable, transparent, competitive and cost-effective”.

technologies.

Late last year the department of energy released a new draft — the IRP2016 — and public comments on the document closed on March 31.

Even though the draft IRP2016 delays the timelines for nuclear expansion, the plan has been widely criticised by industry and energy specialists — most notably for using untransparent and flawed costing methodologies for nuclear and other energy technologies.

Previous updates to the IRP2010, which have also been less supportive of nuclear, have never been adopted by Cabinet. This has led to fears that the newest version will be treated similarly and government will push ahead with nuclear procurement based on a policy that is almost a decade old.

A decision to base nuclear procurement on an outdated IRP would be subject to judicial review, according to Gordon Mackay, the energy spokesperson for the Democratic Alliance.

“The plan has been shown to be inaccurate, its demand forecasts are completely off and the demand forecasts are being used as the basis for nuclear acquisition,” said Mackay.

Eskom’s plans to issue an RFP should be placed on hold until a new IRP was finalised, he said.

With the Cabinet reshuffle and the appointment of Mmamoloko Kubayi as energy minister, there was “a huge question mark” over what version of the IRP would be presented to Cabinet, or whether the current version would be presented at all, Mackay said.

Mackay believed that a joint venture mechanism with a nuclear vendor country, despite a poor credit rating, could make it possible for Eskom to pursue nuclear power. He was also doubtful that Russia’s economic conditions would dampen its enthusiasm to facilitate nuclear investment in a country like South Africa.

Russia was recovering from its own recession and had a substantial sovereign wealth fund, he noted.