The minister of Energy signed an agreement with Russia in September 2014. More recently made a ministerial determination to allow Eskom to go ahead with the procurement of nuclear plants for South Africa. The National Energy Regulator of South Africa (NERSA) had concurred with this determination. I sat in for the final day of the three day high court hearings questioning the legality of these dealings.
There has been a lot of press recently about the ‘nuclear deal’ with Russia.
It all started when our brand new Minister of Energy, Ms Tina Joemat-Pettersson, came back from a United Nations hosted International Atomic Energy Agency (IAEA) meeting in September. Among her papers was a press release, which was issued on 22 September 2014, and publicised for example here.
There is a deal…
However, the newspapers provided very little, if any, actual information. Some bits were quotes from old speeches by the Minister or statements from the Department of Energy, and it spoke of ‘laying a foundation’, which clearly was not a purchase order. Despite that, it was headlined as a ‘deal’, and mixed in with figures about the total cost of a fleet of nuclear reactors.
There is no deal…
There followed a week of flurry in the press, with a retraction from the Department being released almost immediately, and continued furious backtracking with articles appearing like No nuke reactor deal with Russia and SA signed several nuclear agreements.
So what happened? One theory is that our President has signed a secret deal with Putin and perhaps others in Russia to commit to buying nuclear reactors from them. This would be tricky to implement, since it would so clearly bypass any bidding process and the Public Finance Management Act. However, there are worrying factors, such as the Secrecy bill, President Zuma assuming control of the inter-ministerial committee formed to implement the nuclear roll out, Russia being free of EU anti-corruption laws, nuclear being carefully excluded from the 2011 new generation build regulations, and increasing control over the judiciary by the executive.
Another theory is that this was the product of the public relations people hired by the nuclear industry. They would have been swarming all over the recent IAEA conference in Vienna, and our freshly appointed energy minister would have been easy prey.
These PR professionals would have generously offered to assist with the wording of an agreement, and even with writing the associated press release. They were perhaps surprised by the lack of resistance or any analysis by Joemat-Pettersson, and no doubt pleased with themselves and the positive press they had manufactured, especially by wedging the word ‘deal’ into things.
Someone more informed than Joemat-Pettersson saw the press release, and understood any such deal would be illegal and invalid. There followed some intense damage control, and the deal became an agreement. There were also apparently many such agreements planned with other countries.
The job satisfaction of the PR team must have also been short lived, as the backlash resulted in articles about the ever increasing costs of nuclear power and other negative aspects.
Fusion will be here in 15 years?
There is another IAEA conference coming up in October 2014, this time about fusion, hosted by Rosatom in Russia. The PR machine will again be out in force, and no doubt there will be press releases appearing around the 18th October. Hopefully they will come up with something more than ‘fusion will be in use in about 15 years’ – which has been the case since 1956.
Policies and plans…
In South Africa, decisions are made in the context of various govermental documents. First there is the nuclear policy, adopted by the ANC in 2008, which is pro-nuclear. Then there are two energy plans, the Integrated Energy Plan (IEP), and the Integrated Resource Plan (IRP) which deals with electricity specifically. There is also the National Development Plan (NDP), a vision for South Africa from some of the most respected thinkers in SA. At a lower level, there is the Nuclear-1 Environmental Impact Assesment and also a National Nuclear regulator licensing process, both of which must be passed before any order for nuclear reactors can be finalised.
Wait, don’t do it, wait…
The IEP recommends that a decision on nuclear is delayed for a few years to see what happens to relative energy costs, specifically from renewable sources.
The IRP states that should nuclear power capital costs exceed $6500 per kWh, the nuclear option should be abandoned. However, the Rand has fallen to around R11.30 to the dollar, so this figure should be adjusted to around $5800. [Subsequently to publishing this, the rand has fallen below R15.50 to the dollar, which means the figure should now be about $4150.] The most recent nuclear build in the United Kingdom came in at $8000 per kWh, and that is before any future cost overruns. This means the IRP clearly recommends that nuclear power be abandoned.
Finally, the NDP came out strongly against going ahead with nuclear power, calling for a national debate on the issue before any decision is made.
Nay, nay, nay… the yay’s have it!
Despite these three ‘no’ votes, the executive seems to be steaming ahead. Possibly its because they are working off outdated documents – the IRP 2010 and the Nuclear Policy of 2008 are about five years old, included overestimates of electricity demand, and pre-date recent advances in renewable energy, as well as the Fukushima nuclear disaster.
Hopefully, when the updated IRP is released the Department of Energy will align itself to that and formally abandon the nuclear path.
And hopefully, there won’t be a cheap Russian solution which omits some of the more expensive safety features and comes in under $5800/kWh.