Business

Lynne Brown backs nuclear

2016-07-24 15:27

Eskom set to play a leading role in nuclear build project as vendors prepare to vie for lucrative deal

The minister who oversees Eskom this week came out in favour of nuclear as the mainstay source of future local power.

During her keynote speech at the Power-Gen and DistribuTech Africa conference in Johannesburg this week, Public Enterprises Minister Lynne Brown said that when it came to base load power – as opposed to peaking power used at peak times of the day – South Africa had just two options: coal and nuclear.

There was growing consensus that future cost comparisons would swing in favour of nuclear, given increasing coal-fired plant costs associated with more stringent emission limits and the introduction of carbon taxes, Brown added.

“The decision about which technology to deploy requires the consideration of life cycle costs, current and future predicted costs, and commitments made at COP21 [the UN Framework on Climate Change, which took place in Paris last year].

“There has been significant debate about the current and future costs of both these technologies. There is growing consensus that future cost comparisons will swing in favour of nuclear ... [It] offers one of the cheapest sources of electricity that comes with zero greenhouse emissions,” Brown said.

“Clearly, this requires research to quantify and firm up this issue that nuclear is more favourable than any fossil-powered generation,” she added.

Brown said nuclear was “cheap” at the price of between 80c and 90c a kilowatt-hour.

Eskom CEO Brian Molefe said at the same conference that the “fear of nuclear” and criticism of the new nuclear build programme was largely against the cost rather than the technology.

In another development, Eskom has not only thrown its weight behind South Africa’s proposed new nuclear project, but is increasingly taking charge of what South Africa’s nuclear future will look like.

While the energy department will choose the successful vendor, Eskom as the owner-operator of the new nuclear plants will have a large input.

David Nicholls, chief nuclear officer at Eskom, gave the Powergen conference delegates in Johannesburg a glimpse of Eskom’s vision for nuclear by defining a leading role for the state utility.

A chosen vendor would lead the early process, with Eskom’s input. This was also the way that South Africa’s only operating nuclear plant, Koeberg, north of Cape Town, was built in the 1980s, he said.

Once the design base had been established with the first plant, South Africa would increasingly take charge.

Nicholls’ remarks show that Eskom is in favour of a proven standardised fleet of reactors, with sibling international plants to learn from. This indicates South Africa is likely to choose one vendor and stick with them.

“The trick is then to move from the initial vendor-led process to one where – after a certain time and number [of plants] built – South Africa takes over,” he said.

Nicholls said the Russians, through their state atomic energy corporation Rosatom, were supplying the majority of new nuclear capacity being built internationally.

Vendors from Russia, France, South Korea, the US and China are all hoping to win the lucrative nuclear contract.

Nicholls said South Africa had opted for a pressurised water reactor technology, which was a proven technology. “If you want to be in line with the world, choose what most build. Do not be experimental.”

Evidence of the growing influence of Eskom in the proposed nuclear tender was also evident during a visit by the department of energy’s director-general, Thabane Zulu, to Koeberg this week.

Flanked by senior energy officials, Zulu said government had taken an ambitious and bold decision that required collaboration at all levels to make things happen.

A senior Rosatom source said the company was buoyed by Eskom’s growing role in South Africa’s new nuclear build programme, believing that it showed commitment.

Eskom’s growing influence will also increase the smiles of French energy vendors EDF/Areva – nuclear technology company Areva sold its reactor business to the state-owned energy utility EDF earlier this year.

The French have a close relationship with Eskom through their dealings with Koeberg, which was originally built to the specifications of other French nuclear plants.

Oliver Bard, nuclear project director of EDF SA, said that it was critical for Eskom to get closely involved in the project, and that the state utility’s feedback would also strengthen the design of the plants.

“If you know design, you are also much better at operating the plants,” he said.

“It is not healthy to rely on the vendor alone.”

No vendor, however, was willing to discuss costs at this stage, albeit one of the most pressing issues in the nuclear debate.

Silas Zimu, the special energy adviser to President Jacob Zuma, repeated Zuma’s state of the nation message that South Africa would have to build nuclear power plants on a scale and time frame, taking into account what it could afford.

Nicholls said South Africa would go for “whatever we can get the price for. We will try to get lower, [whereas] the vendors will try to get higher.”

He said South Africa was unable to access the fine print of nuclear contracts of other countries which had placed orders. But comparisons show that the average cost for a nuclear plant these days is about $4 500 (R63 925) a kilowatt.

South Africa plans to add 9 600 megawatts of nuclear power with its new nuclear build programme, putting the price tag for the programme at about R613 billion.

“Obviously, the price comes down as we order more,” Nicholls said.

He explained that research showed that prices for new reactors fell to 60% of the initial price after a fourth reactor was commissioned.

Vendors said they would be able to quote more accurately after receiving the much-anticipated Request for Proposal from government, expected before the end of the year. Nicholls said that, in the long run, nuclear was the best option for Eskom, which was desperate to cut its emissions.

He emphasised that after the initial huge investment, nuclear would become cheap to operate and maintain.

Koeberg’s entire operation for a year amounts to 22c per kilowatt-hour. This was as much as Eskom paid for coal alone to fire its coal power stations, he said.

Nicholls added that the first nuclear plant would be Thyspunt, near Jeffreys Bay, because the Eastern Cape was in dire need of reliable base load power. The second site would be Duynefontein, next to Koeberg.

“After that Eskom plans to build a plant somewhere in KwaZulu-Natal,” said Nicholls.

That site is still undefined.

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