There are new signs of life in the domestic nuclear industry as United States-based Westinghouse announced an acquisition, saying it was increasing its local presence to supply South Africa’s new nuclear power programme.
Government has said that it wants nuclear power to supply 30% of the country’s energy needs by 2025. This is 20 000MW of power, a capital cost of about R560-billion at estimated nuclear costs of R28-million per megawatt. To put this into perspective, this is slightly below government’s projected revenue for 2007/08 of R575-billion.
Both of the world’s two major nuclear players have now set up shop in South Africa. On Monday Westinghouse said it had acquired local company IST Nuclear for an undisclosed sum.
Westinghouse, which is 51%-owned by Japanese giant Toshiba, and French company Areva are the main bidders for a contract to build
a new nuclear power station. Late last year Areva added another 6%
to the 45% stake it already owned
in Lesedi Nuclear Services, which services Koeberg, to become the majority shareholder.
Eskom will begin negotiations with nuclear suppliers and was reluctant to comment on the figure it was likely to spend. A ballpark figure for the capital cost of nuclear power is about R28-million
a megawatt.
Since Eskom’s plans call for
20 000MW of nuclear energy to be added by 2025, for nuclear to contribute 30% of South Africa’s electricity needs, this means government can expect to spend about R560-billion. But because countries around the world are now choosing to invest in nuclear, with relatively few companies able to build nuclear power plants, the cost could escalate.
It seems unlikely that the first of these plants would be built before 2010, as Eskom must award a tender still. It is likely to be a conventional nuclear plant using pressurised water reactor technology.
ISTN, now Westinghouse Electric South Africa, is a major supplier to the pebble-bed modular reactor (PBMR), holding R650-million worth of contracts so far. According to PBMR spokesperson Tom Ferreira more sizeable contracts are likely to be awarded to ISTN, as it is a “key strategic supplier”.
Westinghouse holds a 15% share in the PBMR, having taken over the stake when its then-parent company, British Nuclear Fuels, went bankrupt. But despite assurances that it remains a firm supporter of the experimental technology, the group has not yet committed to a larger stake.
When asked if Westinghouse would consider taking a larger stake in PBMR, Rita Bowser, Westinghouse’s regional vice-president, said the company was concentrating on its bid to build the first new nuclear plant for Eskom, but would re-look at its entire local portfolio. “We see our AP1000 technology and the PBMR as being complementary, not competitive. We’re a great supporter of PBMR,” she said.
But the cynic’s view would be that while PBMR technology remains untested until a prototype is built, and it might be that it isn’t commercially viable, there is clearly a lot of money to be made in supplying the prototype plant, and government appears happy to pick up the tab. So far R3-billion has been spent on this technology, with another R1,8-billion advanced to it this year by national treasury.
Eskom is planning two coal-fired power stations. Key supplier contracts have been signed for Medupi in Limpopo, which will cost R78-billion and have a capacity of 4 700MW, while Project “Bravo” is planned for Witbank, Mpumalanga, at a cost of R80-billion, with capacity of 5 400MW, according to Engineering News. The two plants have an average cost per megawatt of R15,6-million.