NUCLEAR AT ANY COST
Zuma deaf to cries for alternatives
Will this be South Africa's new arms deal?
TREVOR Manuel’s National Planning Commission turned to the University of Cape Town’s Energy Research Centre last year. The brief was simple: investigate what should form part of SA’s future energy mix.
The centre issued its report last April. It found that “nuclear investments are not necessary [at least in the next 15 to 25 years] nor are they cost effective based on the latest cost data. Gas options should be explored more intensively and hydro projects from the region should be fast-tracked.
“Many of the low emission alternatives to nuclear capacity [imported hydro, wind and natural gas] can be installed at lower cost with shorter lead times, in smaller increments, reducing the risk of overbuild.”
The unambiguous finding was that government’s plans for nuclear overestimated economic growth and underestimated the cost of nuclear. “If followed, the existing plan would result in surplus, stranded and expensive generation capacity,” it said.
In another paper, the centre’s Tara Caetano argued that “long lead times and potential delays associated with the construction of nuclear power plants . . . could lock South Africa into a large investment for the next decade, during which time alternative energy sources and technologies may decrease substantially in cost”.
Caetano referred to what was known as the Flamanville Scenario.
A reactor at Flamanville in France was built two years behind schedule and à2.7- billion over budget under the supervision of Areva — one of the frontrunners for South Africa’s nuclear build.
The researchers weren’t alone in questioning the rush to build nuclear reactors.
Former Eskom CEO, Brian Dames, was one sceptic. “If South Africa wants to pursue a large gas strategy, then this may displace other technologies,” he told Business Day.
As the argument against nuclear grew, even the government seemed to change its tune.
In November last year, government’s updated Integrated Resource Plan struck a more cautious tone, saying the nuclear decision could be delayed because the electricity demand outlook “has changed markedly” since 2010.
“The revised demand projections suggest no new nuclear base-load capacity is required until after 2025 [and for lower demand not until at earliest 2035] and that there are alter- native options . . . before prematurely committing to a technology that may be redundant.”
Worse: “A persistent and unresolved uncertainty surrounds nuclear capital costs.”
But despite all these findings, President Jacob Zuma appeared hellbent on pressing ahead with the nuclear plan.
Speaking in parliament in February and June, Zuma said South Africa would go ahead with plans to build reactors to supply “over 9 000MW”.
Researchers and planners were stunned. Zuma’s announcement simply inverted their arguments.
They had cautioned against nuclear because growth was likely to be low — but now Zuma blamed poor energy supply for the economy’s parlous state.
Zuma said: “We need to respond decisively to the country’s energy constraints in order to create a conducive environment for growth.”
Zuma was backed up by his freshly minted Energy Minister Tina Joemat-Pettersson.
Public protector Thuli Madonsela recently found that JoematPettersson acted “recklessly and improperly” in awarding a tender while she was fisheries minister.
In her budget speech, JoematPetterson announced that R850million had been allocated for development and research into nuclear energy and safety.
Just what Zuma’s nuclear build will cost is the subject of speculation. In October 2012, former energy minister Dipuo Peters responded to the suggestion that the cost could run to R1-trillion by saying “it would be about that or more”.
She later gave the Mail & Guardian an estimate of R400billion. In 2011, the Nuclear Energy Corporation of SA (Necsa) estimated the cost at R300billion to R400-billion.
Among those to make a more scientific — and more recent — guess is the University of Greenwich’s professor of energy policy, Stephen Thomas.
Thomas said: “I think the most relevant guide for figures for South Africa are those agreed between EDF [France] and the British government in October 2013 to build two 1.6GW reactors at Hinkley Point.”
Using today’s exchange rate and extrapolating this to the 9.6GW, Thomas came up with a figure of R855-billion.
Just how such a massive deal would be financed by a country with a slipping credit rating is a concern. Treasury officials, who do not wish to speak on the record, are nervous about the financial implications.
Nuclear Industry Association of South Africa MD Knox Msebenzi said: “We wish government would just go for it. A lot of people have been ready to go for a while. Some companies have already begun rolling out infrastructure.”
Msebenzi was at pains to stress that nuclear should be but one of many energy options.
He laughs off the idea that nuclear could be replaced by renewable energy. “You have to factor in the intermittency of it. Solar is only during the day— a sunny day.”
Msebenzi is also unfazed by the cost. “The government can access money at 3%,” he says.