Nuke power plan: ‘We will only implement what we can afford’
There is no secret nuclear deal, promises Tina Joemat-Pettersson
OVER the past two weeks the Department of Energy has made significant strides in advancing government energy policy for the electricity sector, in particular regarding our aspiration for an energy mix comprising coal, nuclear, gas, hydro, solar and wind power generation technologies.
Against a legacy of a dominant coal power generation sector, it is prudent for the government to take measures that decarbonise our economy. In October 2011 the cabinet adopted the climate change policy, which has culminated in South Africa endorsing the Paris Agreement under the auspices of the UN Framework Convention on Climate Change.
The government has set specific objectives for the energy sector, upon which the case for the energy mix is predicated. The objectives include improving energy security, reducing the cost of energy, reducing greenhouse gas emissions and reducing water consumption due to power generation; and increasing energy efficiency, access to modern energy carriers and the potential for localisation and job creation.
The government has promulgated air quality regulations and coal-fired power plants must be in compliance by 2018 or be decommissioned.
These factors have been taken into account in the development of the energy plan. The announcement last week of nearly 900MW of projects under the Coal Independent Power Producer Programme reaffirmed South Africa’s commitment to the use of clean coal technologies.
The pursuit of nuclear energy is based on it being a clean energy option that aligns with our energy objectives. Nuclear power generation can significantly reduce our greenhouse gas emission footprint.
This week we made announcements regarding the nuclear build programme. One of these announcements was that the cabinet has been requested to approve that the procurers in the nuclear programme be Eskom for the nuclear power plants and the South African Nuclear Energy Corporation for the nuclear fuel cycle and the multi-purpose reactor, which will replace the existing Safari-1 reactor at Pelindaba.
Besides being an important research facility, the Safari-1 reactor is an important element in the production of medical isotopes and is the main supplier in Africa. The reactor is now more than 50 years old and needs to be replaced.
This procurement process will remain under the co-ordination of the Department of Energy as the lead institution that will manage the new build programme, supported by key stakeholders in the government and state-owned enterprises.
To this end a comprehensive governance structure will be put in place to oversee the new build programme including parliament’s important oversight role through the system of parliamentary committees.
The government, and the Department of Energy in particular, will remain centrally involved in the co-ordination and oversight process. Fears that the nuclear procurement process NO DEAL: Tina Joemat-Pettersson will lack transparency can be allayed by the oversight role that parliament will continue to play even though Eskom and the Nuclear Energy Corporation will be the procurers.
In this respect it is important to note that intergovernmental agreements have been signed with a number of countries commencing as early as 2004.
These agreements are necessary before any procurement negotiations can commence with any vendor due to South Africa’s adherence to requirements of the International Atomic Energy Agency treaties for the peaceful use of nuclear energy.
We have repeatedly stated that there is no nuclear deal that has been entered into or agreed — not formally, not informally and not through any “nudgenudge wink-wink” secret handshake.
There is no deal and suggestions to the contrary are false, misleading and malicious. We are fully committed to a fair and transparent process. This will commence with the issuance of a request for proposals in the coming months.
These bids will be carefully evaluated before a successful bidder or bidders are selected for the various aspects of the programme. As part of this evaluation process a comprehensive funding model will be developed and submitted to the cabinet for consideration. The government has indicated that the approval of any nuclear procurement programme will be informed by the price, affordability, pace and scale of this programme. We will only implement what our country can afford.
Eskom has already signalled that it will be able to fund a considerable amount of the new build programme off its balance sheet, particularly as Eskom’s financial situation improves and as Medupi and Kusile power plants approach completion in the years ahead.
Other sources of funding may need to be explored through export credit agencies and other multilateral funding organisations. But these matters will be more thoroughly assessed once proposals from the prospective vendors have been received.
There have been a number of representations and comments to the effect that the request for proposals for the new build programme should be delayed until a new integrated resource plan has been approved. The government relies heavily on the plan to determine what new generation capacity is required.
Current new generation determinations in terms of the Electricity Regulation Act (of 2006) have all been done in terms of the 2010 plan. The integrated resource plan is a dynamic document subject to change from time to time as a result of economic activity, technological developments and the like. However, we are confident that all determinations to date, including that for 9.6GW of nuclear energy, remain pertinent and appropriate.
A revised integrated resource plan together with an integrated energy plan will shortly be considered by the cabinet for approval. Once these have been approved they will be released for public comment and reviewed accordingly before being processed for promulgation.
Given the long-term need to increase our generation capacity — especially as older coalfired power stations are decommissioned — we expect that additional determinations will be necessary across the energy mix to meet future needs.
Through careful planning we wish to ensure that we do not end up in a situation where economic growth is constrained by a lack of electricity supply as has happened in the past. We also need to ensure that we do not end up with too great a surplus of generation capacity.
We remain confident that we are on track with our generation choices to facilitate socioeconomic growth and development to meet the needs of our country for the next 50 years and more.
Tina Joemat-Pettersson is minister of energy
Suggestions that there is a deal are false and malicious