R9bn nuke power project fizzles out
SA’s PBMR venture seems headed for the junkyard as Eskom interest fades Fact Box
THE DEATH knell might be sounding for South Africa’s beleaguered Pebble Bed Modular Reactor programme as funding dries up and Eskom is understood to have withdrawn its letter of intent to buy 24 of the units.
The Pebble Bed Modular Reactor project, launched in 1998, was meant to create a demo station at Koeberg before making the units commercially available across the globe.
The technology, which was being developed here, was based on technology which was abandoned in Germany following panic around the Chernobyl disaster in the then USSR.
Twelve years and almost R9 billion of taxpayers’ money after South Africa announced the project, it is yet to get off the ground. The project now might not go ahead at all, but if it does, it will only start after 2018, more than 15 years beyond schedule.
This week the chairman of the South African Nuclear Energy Corporation, Dr Rob Adam, was quoted as saying that Eskom had withdrawn its letter of intent to purchase 24 units, should the technology become available.
“The product has no customers and therefore development funding would be limited. PBMR strategy has changed, and the PBMR board and government are considering realignment of priorities, target dates and size of the programme.
“The emphasis is now on retaining and leveraging intellectual property and progress gained to date. The ability of local industry to build the PBMR within a reasonable timeframe is also under question, and the future would probably be in collaboration or contribution to other PBMR programmes around the world,” Adam was quoted as saying on the website, ee publishing.
And while the government and the main stakeholders in the programme refused to be drawn on the details this week, they did admit that the Pebble Bed Modular Reactor project was “currently being reviewed by government”.
PBMR Pty Ltd, which is a public entity, has up until recently been largely funded by taxpayers’ money, but in Finance Minister Pravin Gordhan’s last medium term budget, no provision was made for more funding for the project.
PBMR spokeswoman Lorna Skhosana this week said the company was still operating on gover nment funding “previously allocated to PBMR” and that the gover nment’s decisions on new nuclear facilities in the future, “will also include funding models for the various elements of the nuclear programme in South Africa”.
Media reports from almost a year ago however, indicated that funding was running low, and that government funding would only carry them until March this year.
According to PBMR’s website, the company employs a “core staff ” of 800.
Eskom, the Department of Public Enterprises and PBMR, were all vague in their responses to Weekend Argus questions about the future of the project this week, with none of them confirming whether or not the letter of intent had in fact been withdrawn.
A response to questions sent to Eskom’s media desk stated: “No orders for future PBMR units were to have been placed since the commercialisation of the PBMR technology is dependent on the successful construction and commissioning of the PBMR Demonstration Power Module.”
While no firm orders were ever taken, the PBMR website clearly states: “As part of its longterm nuclear plans, Eskom has issued PBMR with a letter of intent to the effect to order at least 24 commercial PBMR power units, should the demo power plant be successfully commissioned, prove to be commercially viable and operate within defined parameters.”
These parameters included the technology being the cheapest available at the time, something which ID spokesman Lance Greyling said made the letter “flimsy”.
In addition to Eskom being one of the company’s only clients, it is also a shareholder.
Eskom said this week it was a “minority investor” and that the other founding investors were the Industrial Development Corporation and US “nuclear giant” Westinghouse.
According to an article by Professor Steve Thomas of the University of Greenwich, Eskom was indeed one of the founding investors but its stake in PBMR during the feasibility phase grew from the initially expected 30 percent to around 60 percent.
“South African public money actually funded about 75 percent,” he said.
Energy economist Cornelis van der Waal said the government would need to decide what to do with the programme because it could have major benefits for the country, provided it became commercially viable soon.
“This is one of the fourth generation nuclear developments and it doesn’t need water for cooling so we can build it inland, its also a relatively small unit so it is a fantastic investment from that point of view.”