Why more nuclear power is a bad idea

The future of South Africa’s flourishing renewable energy industry hangs in the balance as Eskom fights to justify its plans to embark on a massive and costly nuclear build programme, believed to be at the heart of the “state capture” controversy, which mounting evidence shows is undermining the country’s economy and Constitution.  

The utility’s shock decision a few months ago to stop signing contracts with Independent Power Producers (IPPs) – in defiance of government policy – alarmed participants in a programme that has attracted about R200bn of investment and fostered one of the fastest-growing renewable energy industries in the world.  

SA’s renewable energy share of installed capacity has grown from nothing to 5% in four short years, and the 6 376MW of power successfully procured from 102 IPPs so far already amounts to more than 92% of the 6 925MW of renewable energy target, which was initially set for 2020.  

Eskom insists that it is justified in digging in its heels due to the high cost of the programme, which allows private companies to tender for contracts to supply its grid with a given amount of power at a set rate over two decades. It also points out that solar and wind resources are variable and unable to provide reliable supply during peak periods.

Eskom’s complaint that paying for power generated by renewable technology has so far been much more expensive than coal-fired power is entirely valid, and has been the case in every country that has embarked on the shift away from fossil fuel. But its argument to support building several new nuclear plants to generate an additional 9 600 MW of power in order to meet demand over the coming two decades is deeply flawed.  

For one thing, the costs of wind and solar photovoltaic (PV) technology have plummeted in the last decade as the renewables industry expanded globally with the help of more efficient, cheaper technology. Europe is leading the drive to increase capacity in order to reduce carbon emissions and boost supply security – last year, wind farms in Denmark supplied 140% of the country’s demand. The state of California is aiming for 50% renewable energy by 2030 and all new homes constructed there from 2020 will have to produce their own electricity.  

Nuclear, on the other hand, is on the way out, contributing about 4.4% of the world’s primary energy production in 2014 compared with 8% in 2000. Apart from the threat of accidents – albeit rare – the cost of decommissioning old plants that have reached the end of their lifespan has proved to be prohibitive as radioactive waste is cleaned up.  

The case for SA to follow the renewable path is compelling. Research by the Council for Scientific and Industrial Research (CSIR) has shown that having the bulk of SA’s generation coming from wind and solar resources, complemented by clean flexible power sources like gas, is not only technically feasible, but the lowest-cost option.  

It maintains that without any target constraints imposed on the delivery of new solar PV and wind capacity, new coal and nuclear power in SA would be unnecessary until 2040. The CSIR’s computer modelling shows the projected price for new wind and solar PV would be as low as R0.61/kWh compared with new baseload coal at R1.10 to R1.20/kWh and new baseload nuclear at R1.20 to R1.30/kWh.  

Unlike coal and nuclear plants, wind and solar technologies also require and consume very little water, so a shift to more reliance on renewables would reduce consumption of the increasingly scarce resource as climate changes result in more arid conditions over much of the country.  

Another point to consider is that wind and solar technology is far more nimble – although they generate far less power than coal or nuclear plants, the wind and solar farms that have sprung up in SA over the last few years have been built so quickly that they have often beat completion targets. This is in comparison to the construction of Eskom’s Medupi and Kusile coal plants, which have been delayed by several years, while projected capital costs to completion have escalated from around R223bn initially to R295bn.  

The anticipated costs of SA’s nuclear build plans have been shrouded in secrecy but estimates range from R650bn from supporters to R1.2tr from detractors. Worryingly, the government has decided to put decisions on procurement solely in the hands of Eskom, which means the process will be less transparent.

SA’s public will have a better picture of what is on the table after the release of a new long-awaited Integrated Resource Plan (IRP), which will set out the projections on domestic demand and the cost of the different technologies for an optimal energy mix over the coming two decades. Although the intent was to update it every two years as assumptions change, the IRP has not been revised since 2010 due to the conflicts and controversy surrounding the prospect of a massive increase in nuclear power in SA.

Mariam Isa is a freelance journalist who came to SA in 2000 as chief financial correspondent for Reuters news agency after working in the Middle East, the UK and Sweden, covering topics ranging from war to oil, as well as politics and economics. She joined Business Day as economics editor in 2007 and left in 2014 to write on a wider range of subjects for several publications in SA and in the UK.

This article originally appeared in the 17 November edition of finweek. Buy and download the magazine here.

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