Nuclear projects not necessarily less job rich than renewables - Peters (11 October 2011)
By: Terence Creamer
Published: 11 Oct 11
Energy Minister Dipuo Peters says the Department of Energy (DoE) will seek to take full advantage of the jobs potential within the broad portfolio of technologies outlined in the Integrated Resource Plan 2010 (IRP2010) and has dismissed the argument that a possible nuclear roll-out would result in fewer jobs than would be the case should that capacity be replaced by renewable energy projects.
The Minister was responding to a Parliamentary question posed by the Congress of the People’s Phillip Dexter as to whether steps were being taken to ensure that labour-absorbing energy projects received priority over those that were more capital intensive in nature.
Quoting from a University of the Western Cape study, Dexter raised particular concern that fewer ‘jobs per megawatt’ would be created by a large-scale nuclear roll-out when compared with a similarly sized solar power deployment.
But Peters said that international studies on job creation from various energy sources indicated that nuclear companies compared favourably, and in some cases better, than solar power stations.
“It is important to understand that job creation is not only dependent on the choice of technology, but also on how it is deployed and the potential for competitive localisation.
“Jobs in the nuclear industry span over a wide range, from semi-skilled labour in the uranium mining industry to highly skilled scientists and engineers in design and research of nuclear technology,” she said, while acknowledging that solar projects would also create numerous job opportunities.
“Our approach is to take advantage of the jobs potential based on the broad portfolio of technologies in the IRP2010,” she said.
The IRP2010 anticipated that some 9 600 MW of new nuclear energy capacity could be developed locally by 2030, but Cabinet was still to decide whether or not the country should proceed with a nuclear programme. This decision was anticipated soon, given that Peters had already submitted a process proposal for Cabinet to consider.
EMPOWERMENT LOANS
Peters also indicated that the loan conditions that will be offered by the Development Bank of Southern Africa (DBSA) to finance the black economic-empowerment (BEE) portion of a renewable energy project selected under the DoE’s current procurement round are “favourable”, but has insisted that there is no compulsion on developers to use DBSA finance.
In response to another Parliamentary question posed by Dexter on the nature of the funding package on offer from the DBSA, Peters said the loan would not require the guarantees that might be required by commercial banks.
Loan details would be projects specific and it was, thus, “difficult for government to pronounce on this, but the procurement documents outline the high level requirements in this regard”.
Every registered bidder, which paid the R15 000 registration fee, received the framework regarding the BEE funding under the DBSA programme.
It is understood that the DBSA could extend equity loan finance to black enterprises forming part of a developer’s shareholding structure, or the DBSA could participate in the debt financing of a project.
“It is not compulsory for a developer to use the DBSA and any institution capable of funding the BEE component, will be allowed. However, we are of the view that the terms and conditions under the DBSA programme are favourable to BEE,” Peters said.
She also instisted that government had the capacity to deal with the proposed procurement of 3 725 MW of renewables capacity that would be procured during 2012 and deployed into the national grid by independent power producers (IPPs) between 2012 and 2016.
Government departments were working together to deal with the various aspects of the IPP procurement process, she said, adding that transaction advisors had been appointed to augment the State’s capacity to deal with the programme.
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