Nuclear expert contextualises SA’s nuclear energy ambitions | WWF South Africa

Nuclear expert contextualises SA’s nuclear energy ambitions



Posted on 16 March 2016
In the 21st century, the traditional model of centralised production reliant on large coal, gas or nuclear power stations distributed to consumers through extensive grid networks is being challenged.
© Pipodesign / Philipp P Egli
Last week, the WWF South Africa in collaboration with the Heinrich Böll Stiftung (HBS) and the Centre for Renewable and Sustainable Energy Studies (CRSES) hosted internationally acclaimed energy and nuclear policy analyst Mycle Schneider in Johannesburg.
 
Mycle, who is the convening lead author and publisher of the annual World Nuclear Industry Status Report, was in the country to share his research on the status of nuclear power globally and economic trends in the industry.
 
On Tuesday (8 March), Mycle partook in a public debate, hosted by the WWF-SA, HBS and CRSES, on whether nuclear power was the answer to South Africa’s energy needs. The debate, which was opened by the German Ambassador to South Africa, His Excellency Walter Lindner, and moderated by radio personality Xolani Gwala saw Phumzile Tshelane (CEO of NECSA), Advocate Kevin Malunga (Deputy Public-Protector), Mycle Schneider, Saliem Fakir (Head of Policy and Futures Unit at WWF-SA) and Kumi Naidoo (African Civil Society Centre) tackle some of the critical questions surrounding South Africa’s proposed nuclear programme.
 
Five key questions emerged from the debate namely, the potential economic implications of the proposed build; how South Africa could mitigate construction delays - a trend being experienced in nuclear builds globally; the ideal energy mix for the country; South Africa’s capacity to process and store nuclear waste; and how to ensure transparency in the procurement process.
                       
On Wednesday (9 March), Mycle participated in a technical workshop on the “Economics of Nuclear Energy” hosted by the WWF-SA, HBS, CRSES and the Goedgedacht Forum. Mycle presented an overview of the status of nuclear energy globally and economic trends in the industry. Through empirical evidence, Mycle showed that if one excluded China, the number of new nuclear reactor start-ups globally was, in fact, declining. Mycle also showed that of the new nuclear power stations under construction globally many were beset by extensive construction delays.
 
Four panels of experts unpacked four key themes namely, Energy Planning, the IRP and the Necessity of Nuclear; The Costs of Nuclear for South Africa and Financing Options; Nuclear Procurement; and Viable Alternatives. Despite panellists personal views on nuclear energy, most agreed that:
 
  • Government cannot is not able to fund the construction of the proposed nuclear build programme.
  • There is very little liquidity in capital markets at present and very little appetite from financiers to fund nuclear builds because of the risk work stoppages by regulators and cost overruns place on such investments.
  • The Minister of Finance is currently working hard to prevent the downgrading of South Africa’s credit rating to junk status by rating agencies. An investment on this scale by South Africa into nuclear energy would directly impede the Ministers efforts in this regard. 
  • It is likely that any nuclear vendor who will bring their own funding for the project will require a power purchase agreement in US Dollars or Euros placing a significant exchange rate risk on the South African Government who will have to underwrite such an agreement and additional burden on electricity consumers.
 
Another point that came out strongly during the workshop was that demand for electricity in South Africa has remained flat for nearly ten years, implying a decoupling of economic growth and electricity consumption.  Given the uncertainty surrounding our future electricity demand, a more flexible power supply with smaller more modular units is more appropriate.
 
Mycle ended his week in South Africa on 11 March, which marked the five year anniversary of the tragic Fukushima disaster in Japan which saw 160 000 people displaced and has placed a significant financial burden on the Japanese government.  
In the 21st century, the traditional model of centralised production reliant on large coal, gas or nuclear power stations distributed to consumers through extensive grid networks is being challenged.
© Pipodesign / Philipp P Egli Enlarge
Mycle Schneider is the convening lead author and publisher of the annual World Nuclear Industry Status Report.
© Mycle Schneider Enlarge