SA seals massive nuke deal with Russia

South Africa has signed a multibillion-rand deal with Russian state nuclear energy company Rosatom for as many as eight nuclear reactors.

A joint announcement of the ''strategic partnership'' yesterday made no mention of costs, but Rosatom's director-general, Sergey Kirienko, estimated the deal's value at between $40 and $50-billion (about R440-R550-billion), according to the Itar-Tass news agency.

However, analysts expect that cost overruns for the massive nuclear procurement and development could push the price up to as much as R1-trillion.

The agreement was lauded by the government as "an important driver for economic growth'', but greeted with dismay by environmentalists and the National Union of Mineworkers.

Kirienko said the deal would result in orders worth at least R111-billion from South African industrial companies and would create thousands of jobs.

South Africa's integrated resources plan envisions 9600MW of nuclear energy being added to the national grid by 2030 to help reduce reliance on coal, which Eskom uses to generate 80% of the country's electricity. The utility is struggling to meet demand for power.

"This agreement opens up the door for South Africa to access Russian technologies, funding [and] infrastructure, and provides a proper and solid platform for future extensive collaboration," Energy Minister Tina Joemat-Pettersson said in the joint statement.

It would allow the implementation of its plan to create more nuclear capacity by 2030, she said.

Yesterday's announcement confirmed speculation raised by a trip by President Jacob Zuma to Russia last month, during which he met President Vladimir Putin.

The government's insistence on concluding the deal flies in the face of concerns over nuclear power raised in the National Development Plan. The NDP questioned the financial viability and timing of sourcing vast amounts of power through nuclear energy, but the government agreed in 2012 to move ahead with the project.

Last night the NUM reiterated its fierce opposition to the "flirtation with nuclear power".

The union's general secretary, Frans Baleni, said: "There has been no proper consultation on nuclear [energy] as an alternative for South Africa despite the massive security concerns that exist.

"Look at what happened in Japan," he said, referring to the Fukushima disaster of 2011. ''Given our economy, we don't have the capacity to recover from such a mess. It will take Japan about 30 to 40 years to recover."

Baleni also warned that corruption could result from a deal of this magnitude.

However, Philip Lloyd, a professor at the Cape Peninsula University of Technology Energy Institute, said though nuclear energy was expensive, it would cost a lot to expand the grid: "It is going to be very expensive wherever we get more power from - Karoo shale gas, wind, or coal.

"We will need another 10000MW of power between 2020 and 2030. That is a quarter of Eskom's existing capacity that must be added to the grid. The country needs to start ordering soon."

But an associate at environmental NGO Groundwork, David Hallowes, said the deal was a "disaster".

He said: "I think it is an appalling development. If nuclear stations go wrong, they go wrong badly. Disasters can be catastrophic," he said.

Additional reporting by ©2014 BDlive