Taxpayers exposed to nuclear costs
Taxpayers continue to labour under the misguided belief that Eskom and the Nuclear Energy Corporation of South Africa make funding provisions monthly, over the operating life of their nuclear reactors, to cover the costs of decommissioning and disposal of waste from their nuclear plants, in terms of the “polluter pays” principle.
Page 69 of the 8th National Report prepared by the department of energy and national nuclear regulator states in respect of Eskom’s Koeberg nuclear power station:
“Financial provision for decommissioning continues to be accumulated on a monthly basis since commercial operation of the installation began in 1984.
“In terms of decommissioning financial plans, the amount of decommissioning and spent fuel provision made each month is determined by the present value of future estimated cash flows.”
However, the problem with these fine words to the International Atomic Energy Agency is that they are misleading.
In reality, Eskom explains, the so-called “provision” made for decommissioning and disposal of high-level nuclear waste from the Koeberg nuclear power station is an accounting book entry for future obligations estimated at R16.2 billion, expressed in 2020 rands, and reflected as a liability on Eskom’s heavily over-indebted FY 2020/21 balance sheet.
Riedewaan Bakardien, the chief nuclear officer at Eskom, says that of the R16.2 billion liability shown on Eskom’s 2020/21 balance sheet, some R8 billion is Eskom’s estimated liability for Koeberg’s decommissioning, and disposal of low- and intermediate-level nuclear waste at the existing Vaalputs repository.
The balance of R8.2 billion is Eskom’s estimated liability for longterm storage of spent fuel on site, and for developing, constructing and operating a deep geological final repository for high-level spent fuel waste from Koeberg.
However, it would appear that Eskom significantly underestimates its liabilities for decommissioning and disposal of high-level nuclear waste from its Koeberg nuclear power station.
Eskom has confirmed that provision for future decommissioning, waste storage and disposal is built into and forms an integral part of the internal transfer pricing (rands per kWh) of electricity generated by Koeberg into the Eskom grid. As such, these provisions are ultimately recovered from customers via Eskom’s electricity tariffs.