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A Summary of The Nuclear Deal, Why It Failed and What This Means For South Africa.

By now nearly everyone in South Africa knows at least one thing about the proposed nuclear build programme.

Everyone should know that, for now anyway, the programme has effectively been sent back to the drawing board (hopefully not that same one that “crafted” the last programme).

Perhaps a bit of history is needed to get to grips with all the failings of the Nuclear Programme.

What did the court find?

  • The minister tabled the Russian agreement in parliament using a section of the constitution that allows for non-technical and non-binding agreements to be tabled without debate or acceptance by parliament. This goes against advice by the state advocate who suggested that due to the specificity of the agreement that it be tabled in parliament under a different section that required parliament to scrutinise, debate and accept the agreement. The judgement indicates that this is a serious contravention, at best by accident or at worst intentional.
  • The tabling of the Russian agreement is declared unlawful and unconstitutional, as the specificity of agreements required parliamentary oversight.
  • The tabling of the agreements with the US and South Korea are also declared unlawful due to them being outdated. The US agreement being almost two decades old and the South Korean agreement being almost 5 years old.
  • Both the 2013 and 2016 determinations are declared unlawful and unconstitutional, as due process was not followed in deriving these.
  • From the judgement it appears that the National Energy Regulator (NERSA), which is tasked with vetting the determination and providing input to the final determination has simply rubber stamped the determinations.
  • Additionally no additional consideration appears to have been undertaken to consider any changes in the assumptions between the 2013 and 2016 determinations.
  • Apart from not appropriately assessing the determination, NERSA has also not undertaken any public participation processes, as required under law.
  • As a result of the determinations being set aside, all actions that have resulted due to the determinations are also set aside. This means that the Eskom RFI and planned RFP has been declared invalid.

So what does this all mean?

Well, for the near future at least, the nuclear programme has been sent back to the drawing board.

Even if the judgment is appealed it is unlikely that Eskom will be allowed to proceed with procurement while the appeal is being heard.

If the judgement is not appealed, government would need to make a determination based on the latest IRP or IEP which the new energy minister has said, will be finalised this year. NERSA which has to co-sign the determination will need to conduct public hearings and stakeholder consultations and apply their minds to the reasoning behind the decision to procure new nuclear.

It appears that if government is still interested in procuring Nuclear Power as evidenced by the Minister of Finance’s recent statements at the World Economic Forum meeting being held in Durban. What is important, is that this time around we as the public and civil society play an active role in any new bids to procure Nuclear Energy.

Do we even need nuclear?

Probably not.

The state owned electricity monopoly Eskom currently generates electricity primarily from Coal with some energy coming from RE, Hydro and one nuclear power station. Most of Eskom’s power stations are ageing and will be due for shutdown in the next decade or so. Shortly after the power shortages experienced in 2007, Eskom started the process to begin building two large coal fired power stations. The New Build programme as it was known has been plagued by delays and cost overruns. Completion is now planned to be at least 10 years behind initial planned completion (Medupi – 2011 & Kusile – 2013).

As a result of the energy shortages, global economic factors, and waning investor confidence in South Africa, electricity demand has dropped significantly in the last 10 years. Experts point out that South Africa now uses less electricity than was used 10 years ago. In addition, these experts also indicate that even when considering the decommissioning of ageing power plants and assuming growth in South African industry at levels much higher than we are currently experiencing, in ten years we will still have an energy surplus (more energy capacity than consumed). So why now?

Nuclear lobbyists state that the cost to operate is cheaper than renewables, but conveniently pick the most expensive REIPPP bids to illustrate this. They state that it is the most reliable form of base load (energy always consumed and not variable)[considering the quality issues found at new build sites in France, Norway and other projects as well as meltdowns at Fukushima and of course Chernobyl]. Even though these are extreme events, considering the environmental and economic implications of an accident occurring, is nuclear worth the risk?  This article on Nuclear vs Renewable Energy does a good job at explaining the key benefits RE has over nuclear.

South Africa has also committed to reducing emissions by 34% of 1990 levels by 2030. Here I can be convinced, partially at least, climate change is real people. However considering government’s efforts on Biofuels and other environmental issues as well as Eskom’s approach with winning REIPPP bidders, I doubt this is the primary reason for nuclear.  

Lobbyists also say that we need baseload power and this can only be generated by conventional forms of energy generation (Coal or Nuclear). On this again I could possibly be swayed to agree although recently an entire European country ran on energy other than coal for the first time in their history (Britain). The CSIR has also recently provided input to the new Draft IRP that indicates that 70% of the energy required in 2050 can be supplied by renewable energy at a lower cost (capital and tariff) than that proposed in the Draft IRP prepared by the DoE. The CSIR study also takes into consideration transmission upgrades needed for grid stability, something which Nuclear proponents always indicate will negatively be affected by RE.  

In conclusion

Considering the drive of nearly all other nations to move toward renewable and alternative forms of energy, why aren’t we?

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