Mooted nuclear power estimations still premature

Current estimations of the mooted nuclear power development programme were premature and untested as the various financing and risk mitigation models would only be known after the interested vendors had responded to the government’s call for proposals, according to the Nuclear Industry Association of South Africa (Niasa). Energy Minister Tina Joemat-Pettersson last week told Parliament that the Department of Energy would issue requests for proposals on the 9 600-megawatt nuclear procurement programme at the end of this month. The department previously said it would release the request for proposals at the end of March this year. It missed that deadline. In December last year, Cabinet gave the department the green light to issue the request for proposals. The request for proposals is an important milestone in the programme as it would give an indication of a possible funding model.

The programme has come under much scrutiny and criticism because of its estimated costs and concerns about the openness of the process. But Niasa’s managing director, Knox Msebenzi, said yesterday that the nuclear programme, the request for proposal and the response of the vendors would give first indication of the costs of the programme. Msebenzi said these would give the figures “and in turn open up the debate on the various financing and risk mitigation models. Therefore, any assertions and pronouncements in this regard are premature and untested at present. “It is up to government to find the optimal financing with the multiple objectives of security of electrical power supply and economic development. Whatever model chosen, it should ideally have sufficient flexibility to allow for adjustments of the timing of the construction of the fleet over the planned horizon.”

Previous estimations have put the price tag of the nuclear programme at between R600 billion R1 trillion, making it the largest procurement programme in South Africa. Companies vying for the tender include France’s Areva, Russian state corporation, Rosatom, and Westinghouse of US. Niasa said the nuclear build programme should be “in its entirety” and should emphasise localisation, local content and skills development to ensure tangible development and meaningful employment for the communities where the plants would be located. “As a country we have experience in large-scale projects and we have varied experts to advise and guide us towards the successful delivery of the project over the next 20 years. We can draw valuable insights from both our successful projects and the not so successful ones and improve on our performance,” said Msebenzi.