R9bn nuke power project fiz­zles out

SA’s PBMR ven­ture seems headed for the junk­yard as Eskom in­ter­est fades Fact Box

Weekend Argus (Saturday Edition) - - NEWS - BIANCA CAPAZORIO

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.”

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