Nuclear deal brought to its knees

Johannesburg - This week’s Western Cape High Court judgment, which set aside government’s attempts to secure nuclear energy, has cut the procurement programme off at the knees, according to Adrian Pole, the environmental lawyer who led the case.

He represented nongovernmental organisations Earthlife Africa and the Southern African Faith Communities’ Environment Institute, which had embarked on a joint court bid to stop government’s nuclear expansion plans in October 2015.

The ruling also guarantees that government will face a long, drawn-out process to restart it, he added.

Two major building blocks leading up to power utility Eskom’s planned request for proposals to nuclear vendors this year have been declared unlawful and unconstitutional, forcing the government to go back to square one.

An appeal is likely, but that would still significantly delay existing plans to procure new nuclear power stations.

Judge Lee Bozalek ruled on the evident push to get a procurement programme with Russia going with minimal oversight or public participation.

Bozalek set aside the following:

  • The two ministerial determinations, set by former minister of energy Tina Joemat-Pettersson, that South Africa should procure 9 600 megawatts of nuclear power and that Eskom should be the procurer.
  • The intergovernmental agreement with Russia that, according to this week’s ruling, was never the innocuous and nonbinding agreement that government made it out to be, but instead locked South Africa into a number of problematic concessions to the Russians.
  • Eskom’s request for information, issued in December 2016. The request for proposals from nuclear vendors – planned for this year – is now certain to be cancelled too.

FULL JUDGMENT: Nuclear process declared unlawful

Earthlife Africa and Safcei had taken government to court on a number of technical legal points regarding the minister’s determinations and the agreement with Russia.

The determinations form the very basis on which the nuclear programme has been mooted.

Legally, the energy minister has to issue determinations to authorise electricity infrastructure, based on what its draft energy policy – known as the Integrated Resource Plan (IRP) – says the country requires.

Apart from the nuclear ones, there have been determinations leading to the country’s renewable energy programme as well.

The nuclear determinations were set aside because the National Energy Regulator of SA (Nersa) simply rubber-stamped them instead of launching a public participation process, which the judge said was more than justified.

“The decision to formally expand the nuclear procurement programme to 9 600MW must surely rank as one of the most important decisions taken by Nersa in the recent past,” said Bozalek in his judgment.

Asked how the state may go about restarting the nuclear new build programme, Pole said it was a complex question.

He said if government chose to appeal the ruling and lost, a new determination would have to be issued by the energy minister.

“If you do a new determination, you would need to consider new information. This would include the yet-to-be finalised new IRP,” said Pole.

READ: Nuclear judgment: what government now needs to do

This plan is itself at the centre of a major storm because of the allegedly artificial limits it places on renewables. In doing so, the plan favours nuclear.

A new IRP could very well call for nuclear again – or even for more nuclear than before.

The NGOs had asked the court to consider the fact that the nuclear determinations were still based on the old 2010 IRP, but the judge said this was not necessary to consider.

Restarting a nuclear programme would also require more information to be placed in the public domain, said Pole.

Nersa would need to subject any new determination to a public participation process.

By law, determinations require relevant information, such as the possible costs, to be made available.

Technically, the same flaw that killed the nuclear determinations this week could be used against the renewables determination, which has a significant enemy in Eskom as well as the unions with coal sector members.

However, Pole says this is unlikely to happen because that determination was made in 2012 and the Promotion of Administrative Justice Act gives you 180 days to apply to review a decision.

The state now has 15 days to appeal the judgment, but Pole says it could hit a hurdle if it does so.

Since the main fault lies with Nersa, and Nersa never opposed the application to begin with, it could be an interesting legal challenge to appeal, said Pole.

Business Leadership South Africa (BLSA) welcomed the ruling, stating: “Once again the rule of law has triumphed in South Africa. The BLSA applauds this ruling, particularly given that the nuclear new build programme was a red flag for ratings agencies. Fitch had cited it as central to the decision to remove former finance minister [Nhlanhla] Nene and recently stated it contributed to the dismissal of former minister [Pravin] Gordhan.

“BLSA has also noted and supported the clear findings of the IRP, which suggest South Africa does not need a R1 trillion nuclear plan. In our current low-growth environment, the costs and affordability of a nuclear programme will strain public finances already under pressure.”

READ: Nuclear ruling to cause 'great unhappiness' in Russian camp

The newly launched SA Federation of Trade Unions said the nuclear deal, before it was halted, was another example of government having subverted democratic processes by not referring the deal to Parliament for endorsement or holding any public debate on it. It was an agreement which it had already referred to as a done deal with Russian companies.

Minister of Energy Mmamoloko Kubayi said she had directed her department to study the judgment.

Kubayi confirmed that intergovernmental agreements had been signed between South Africa and the US, South Korea, China, Russia and France.

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