SA dumps hydro for nuclear

2014-08-17 15:00

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The energy department admitted this week that an ambitious hydropower project had been placed on the back burner as focus shifted to widely criticised plans to embark on a nuclear build programme.

Late last year, the South African and Democratic Republic of Congo governments signed yet another treaty on the Grand Inga hydroelectricity project.

This followed one signed earlier in the year under the stewardship of then energy minister Dipuo Peters.

But in his state of the nation address earlier this year, President Jacob Zuma announced that officials in charge of adjudicating myriad nuclear tenders

were open for business.

“We expect to conclude the procurement of 9?600?megawatts of nuclear energy,” he said, before quickly moving on to biofuels manufacturers.

New Energy Minister Tina Joemat-Pettersson, who took over from Ben Martins after the elections, followed up with a more definitive budget vote speech, putting the cost of “further research and development on nuclear power” at R850?million.

She said this amount had been allocated to her department and its relevant agencies.

These developments ran counter to the department’s own integrated resource plan, updated in November, which has recommended a delay in nuclear build.

The cost of the country’s nuclear ambitions has been estimated at R1?trillion, but similar projects elsewhere have been beset by cost overruns.

A study by the US department of energy showed that, of 75 nuclear plants where construction began between 1966 and 1977, the average cost overrun was 207%.

The integrated resource plan recommended the delay after electricity demand projections were revised downwards from the previous plan published in 2011.

Previously, peak electricity demand for 2030 was projected at 67?800MW, but a revised economic and electric sector outlook prompted the energy department to scale this down to 61?200MW.

“The nuclear decision can possibly be delayed,” reads the integrated resource plan.

“The revised demand projections suggest no new nuclear base-load capacity is required until after 2025 (and for lower demand not until at earliest 2035).”

The plan also pointed to “alternative options” – such as regional hydropower that can fulfil the energy requirement – and urged further exploration of shale

gas before “prematurely committing to a technology that may be redundant if the electricity demand expectations do not materialise”.

In a research paper, Frost & Sullivan energy analyst Tom Harris highlighted the danger of nuclear power stations becoming white elephants.

“If significant investments are made in a nuclear build programme but demand requirements fail to reach projected levels – while industry begins

to devise alternative solutions that can be more quickly implemented – there is a risk that we could witness the commissioning of something of a ‘white elephant’ in the energy sector in 2025, and be left sitting with a few thousand megawatts of excess base-load capacity,” said Harris.

Arguments that excess capacity could be exported had no merit because regional projects like Grand Inga – which promises to electrify sub-Saharan

Africa – could shrink the country’s pool of buyers, according to Harris.

“Energy policy makers should realistically reflect on such national and regional risks, given that at some level of excess capacity, industry participants may struggle to achieve the required return on investment,” he said.

The energy ministry, on behalf of Joemat-Pettersson, did not respond to questions on what prompted her to ignore the integrated resource plan and fast-track the nuclear build programme.

Grand Inga Complex will be bigger than China’s Gorges

The 40?000MW Grand Inga Complex – to be built on the Inga Falls on the Congo River about 300km from Kinshasa in the DRC – is slated to be the largest hydropower complex in the world, generating almost double the power of China’s Three Gorges Dam.

Pretoria’s treaty with Kinshasa secured half (2?500MW) of the output of the first phase of the project, Inga?3, which has already secured a $73?million (R770?million) grant from the World Bank.

The project’s page on the bank’s website showed another funding commitment of $33.4?million from the African Development Bank.

At the US-Africa Leaders Summit last week, Pretoria’s statement referred to the treaty as well as its plans to extend South Africa’s nuclear capabilities and explore shale gas deposits.

But it appears the Grand Inga project is not a priority. Asked about progress since the signing of the treaty, energy department spokesperson Johannes Mokobane said: “This matter will be considered by Cabinet in the near future.

“It will then be shared with the public through the normal communication by the relevant minister or minister in the presidency.”

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