/ 26 September 2013

Plans to finance SA nuclear programme due in March

Plans To Finance Sa Nuclear Programme Due In March

An investment decision on South Africa’s nuclear expansion programme will be made by March next year, the department of energy said in a press briefing on Thursday.

Before it was made, however, a number of strategies had to be in place, including a plan to finance the construction of new atomic power plants; to address the looming skills gap in the nuclear sector; and to establish critical institutions such as a national radioactive waste disposal body.

This was according to Zizamele Mbambo, deputy director general for nuclear at the department. Government faced "a number of aspects that we are addressing as part of the phased decision-making approach", he said.

Mbambo said the localisation of the programme, an important imperative for government, also had to be realised.

Questions of skills, financing and necessary institutional frameworks are all areas against which South Africa's nuclear readiness was assessed in an Integrated Nuclear Energy Review (INIR) undertaken earlier this year by the International Atomic Energy Agency.

The final report on South Africa's nuclear readiness was handed to the government in May but has yet to be made public.

Cabinet, through the national nuclear energy executive co-ordinating council, headed by the president, is tasked with overseeing the procurement of a proposed 9 600MW of additional nuclear energy. It is outlined in the departments integrated resource plan (IRP) a 20-year electricity road map.

The cost is estimated at between R400-billion and R1-trillion. National power utility Eskom, the designated owner and operator of any new nuclear power plants, has indicated that it cannot pay for their construction of its existing balance sheet and at current electricity tariff levels.

Coal 3
The continued deliberations on nuclear, and the challenges of financing it, come as government also embarks on steps to build a third coal-fired power station. In August, Cabinet gave the go-ahead to build what is known as Coal 3. It will follow on the heels of Eskom's new Medupi and Kusile power stations, both currently under construction in Limpopo and Mpumalanga.

Eskom has previously welcomed the decision on Coal 3, although it has said it has not begun work on ways of financing it.

But director general at the department Nelisiwe Magubane told journalists it was not a given that Eskom would build Coal 3.

"Eskom had done a lot of ground work for the Coal 3, therefore it has been seen as their project," she said.

If it was going to be built by Eskom, then as with nuclear, "we have to have frank discussions about how it is going to be financed", she said.

Ultimately, however, the decision rests solely with the minister of energy.