RON DERBY: Nuclear dithering makes third coal plant inevitable (16 September 2011)

What Energy Minister Dipuo Peters didn’t say yesterday — when she said SA is postponing the building of nuclear power plants for a year

RON DERBY
Published: 2011/09/16 08:11:19 AM

WHAT Energy Minister Dipuo Peters didn’t say yesterday — when she said SA is postponing the building of nuclear power plants for a year (for the second time) — is that we have in effect decided to build a third new coal-fired power station to fill the energy gap that will no doubt be there the longer the government avoids committing to a nuclear power time frame.

Yesterday, Ms Peters said the postponement was for safety reasons after the accident at reactors in Fukushima, Japan.

While the Japanese nuclear accident disaster has raised questions globally of the safety of the technology, there were no reported deaths from radiation from the 40- year-old reactor. And unless SA finds itself on a fault-line since the March incident, one has to wonder why the country is dithering with regard to making a decision.

With the government aiming to double the size of its electricity generating capacity in the next two decades, nuclear energy is expected to be used for base-load purposes from 2020. And yet, here we are once again pushing back a decision on the technology.

Funding is the big issue facing the government, and of more importance, the state of Eskom’s balance sheet. The power utility has been earmarked as the main driver of nuclear power plants.

While the running costs of a nuclear plant aren’t as onerous as coal power stations the technology and constructions costs require deep pockets.

At the end of 2008, we cancelled a plan to build a nuclear plant that was modestly estimated at about R120bn as a global credit freeze cut financing. The project wasn’t altogether abandoned. The January blackouts at some of the country’s mines that same year, made it clear that a solution had to be found — and fast — to the energy crisis.

Here we are in 2011, with a slow- to-stagnant global economy that has kept energy-intensive smelters operating below capacity, providing some relief to the grid. But the country still hasn’t made any tangible steps towards a nuclear future. The time to reflect and act without the pressure of a grid about to buckle under the pressure has been wasted.

Apart from the issue of funding, an industrial policy document on the creation of a nuclear industry hasn’t been fully developed. Our only nuclear station, Koeberg in the Western Cape, was built by the French nuclear giant Areva. But now SA wants to build its own nuclear fleet. The goal is to send kids to university to become nuclear physicists, and create an entirely new industry, whose skills could be used across Africa.

Without these plans in place, where do you start with raising the required funding?

And if the country made a decision on nuclear next year, with an industrial policy already prepared, the question becomes how long it will take the first nuclear station to be up and running.

It takes about 10 years to get a nuclear station built and operating, and that’s conservative.

The nuclear supply chain is constrained. An example is Japan Steel Works, whose services are in great demand owing to its being one of only four manufacturers worldwide of large single-piece pressure vessels for nuclear reactors.

The longer we delay a decision, the further down the queue we are. The time frames for construction approval can also be stifling.
Let’s not forget environmental lobby groups. Strengthened by the recent Japanese nuclear situation, they could add another layer of opposition. For argument’s sake, let’s say the government finally makes a decision next year. Considering all the hoops they have to jump through thereafter in getting the first plant running, it will probably take longer than 10 years.

According to SA’s Integrated Resource Plan, by the year 2020, we should be in a nuclear world if we are to avoid the power cuts experienced in 2008.

What can possibly fill that gap? Well, you guessed it, SA and Eskom may have to build a third coal-fired power station, and this time, without the help of the World Bank.

Two years ago, the World Bank was criticised for granting Eskom a $3,75bn loan to help fund the 4800MW Medupi plant because of global warming concerns.

The US, the bank’s biggest shareholder, and the UK were among nations that abstained from voting on the loan.

The loan was the bank’s first major loan to SA since apartheid ended in 1994. Environmental groups were also concerned and civil rights organizations criticised the deal saying it would benefit industry more than the poor.

Could another coal powered station be on the cards? The nuclear delays lead to that conclusion. Or perhaps we face a much longer period of load-shedding than that experienced in 2008.

Business Day
16 September 2011