SA's nuclear trajectory looks unstoppable

01 November 2015 - 02:01 By LUTHO MTONGANA, PALESA VUYOLWETHU TSHANDU and SIKONATHI MANTSHANTSHA

When Frenchman Yves Guenon graduated in the '70s, his first big job was to build Africa's only nuclear power station. In 1985, that task was accomplished when the 1800MW Koeberg plant was connected to South Africa's national grid. Fast-forward three decades and Guenon is the major representative of French company Areva in South Africa, hoping to build the second nuclear plant on the continent.But just who will shape South Africa's nuclear future is not clear.Last week, the National Treasury set aside R200-million in the medium-term budget for consultation on a nuclear build programme. It is clear that the contentious plan to add 9600MW of nuclear power to the grid is fast becoming a reality.However, the quantum may change in months and weeks to come.story_article_left1There is no doubting the need to add base-load power and apart from building another coal-fired power station, which could compromise relationships with international lending institutions such as the World Bank, the options are a capital-intensive nuclear build or a shale gas project.As a condition set by the Washington-based World Bank to provide funding for Eskom's Kusile power station in 2010, South Africa said it would not build another coal-fired station.At the time of the loan, South Africa was firmly on the path of building a new nuclear fleet. But in the years since, the economy has slowed, with questions being raised over the affordability of the technology.There are five possible builders of the nuclear fleet, whose costs range from R500-million to more than R1-trillion.They are France's Areva, US/Japanese-owned company Westinghouse Electric, China's State Nuclear Power Technology Corporation, South Korea's Korea Electric Power Corporation and - the main contender - Russian state-owned Rosatom State Atomic Energy Corporation.Rosatom has been singled out as the clear favourite because of President Jacob Zuma's apparent closeness to Russian President Vladimir Putin.Whoever wins the contract, South Africa's nuclear build will cause ructions. "The economy ... cannot afford a R1-trillion nuclear plant. Therefore, we call on the government and the ANC to review their pro-nuclear stance seriously," said Livhuwani Mammburu, spokesman for the National Union of Mineworkers, who described the energy investment as "national suicide".The union is a key component of the ruling alliance.mini_story_image_vright1South Africa's energy crisis has significantly contributed to a slowdown in GDP growth. Finance Minister Nhlanhla Nene has lowered the economic growth forecast to 1.5% this year and 1.7% next year. In 2007, before the crisis hit its peak, GDP growth topped 5%.Kelvin Kemm, CEO of Nuclear Africa, said the main point in awarding the contract was the kind of relations South Africa wanted to build with the bidder's country, not the reactor or the project itself."The reactors would do a perfectly good job. Now we have to decide who is going to be the sort of business partner you want to work with, who is going to be the type of people who are going to give you the best levels of co-operation into the future," he said.The government plans to increase nuclear energy by a further 9600MW in the next decade and to procure at least 25% of the project from local suppliers."Nobody does 100% of the work themselves - and I suppose it will be the same with us," said Andrew Kenny, an independent energy analyst and nuclear engineer. "[On] the first reactors, we [South Africa] will do quite a lot of the civil work, but not so much of the nuclear reactors themselves; those would be mainly by the foreign vendors."The project's cost would be a major question, with South Africa's national debt standing at R1.8-trillion. Borrowing the money to build nuclear power stations could increase our debt to more than the 47% of GDP it stood at in March this year, putting our credit rating at risk.The World Bank estimates that South Africa' s nuclear programme would cost R1.2-trillion - a number Kemm dismissed, citing a North-West University estimate of R650-billion."There are going to be three nuclear power stations and each one will either have two or three reactors ... depending on the configuration. But these nuclear power stations will collectively add up to 9600MW," he said.The Westinghouse AP 1000 reactor and the Rosatom VVER 1200 were the leading reactors in the world, said Kemm. The Chinese CAP 1400, and Areva's 1650 MWe EPR were all capable designs, he said.All the companies have increased their safety precautions after the Fukushima earthquake incident in 2011, which released radioactive material into the environment.full_story_image_hright2Kenny said the Russian reactors were good, but perceptions of political favouritism, given Zuma's relationship with Putin, could pose a problem. "The Russians know what they are doing. They can do everything from the fuel, construction - they are very good," said Kenny.Ahmed Jaffer, former lead audit partner of Eskom and chairman of KPMG in South Africa, said of the possibility of another nuclear station: "We need it, it's the lowest-cost operating model we can go for. It's good for the country, it's good for the consumer and it's good for everybody else. The last major [coal] plant was in 1996, so that's 20 years already [since South Africa added to its electricity generation capacity]."Nuclear is only an addition to South Africa's energy resources and would not replace other energy sources, such as renewable power or coal.As for uranium, which is the fuel for nuclear generation, AngloGold Ashanti produces about one million pounds of the fuel a year as a byproduct of gold. From uranium, the country's gold producers would generate additional revenue and find a ready local client for a product they do not have much use for.story_article_right2Kenny said the proposed nuclear site was likely to be in the Eastern Cape, the worst-performing province in economic growth, and this would be a boon. "It's in the Eastern Cape, which means jobs. This would have a huge effect on employment and great beneficial effects," he said.Kenny, Jaffer and the bidders agreed that coal-fed power in South Africa would continue to have a competitive advantage and would not be replaced by nuclear energy."Coal is cheap, it is very reliable and it's done very well for South Africa and we've got lots of coal still," Kenny said. "So I'm in favour of coal stations, although they are dirty. But nuclear is just better for base-load power. The future base load for South Africa should come from nuclear."The National Treasury said it was not in a position to release information on the nuclear bid as it was still in talks with the stakeholders.Areva has said it will offer South Africa its EPR technology with its Konvoi reactors, with a high degree of local input.And Yves Guenon? Having worked on Africa's first nuclear power station, Guenon is determined to play a major role in the next generation of nuclear power stations.mtonganal@sundaytimes.co.za; tshandup@sundaytimes.co.za; mantshantshas@fm.co.za..

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