Rational energy technology choices for SA’s sustainable future
By Princess Mthombeni
Given the resistance to new nuclear construction in South Africa, especially based on affordability worries and a push for intermittent energy sources during load shedding, it’s crucial to approach the matters thoughtfully and realistically.
The DA, the Organisation Undoing Tax Abuse (Outa), and the Southern African Faith Communities’ Environment Institute (Safcei) have all voiced their concerns, each highlighting different aspects of the debate.
The DA announced on March 8, 2024, that it has filed legal documents against the minister of electricity and the National Energy Regulator of South Africa (Nersa) regarding their decision under section 34 to acquire 2 500 megawatts (MW) of new nuclear power generation. The DA argues that the approval process for the determination was procedurally unfair, as it did not allow for public input on the supporting submissions. Consequently, they seek to have it nullified.
The evidence indicates that the Nersa process for the section 34 determination of 2 500MW of nuclear power capacity involved extensive public participation that engaged all stakeholders. The process culminated in Nersa granting a concurrence in 2021 with suspensive condition. It is worth mentioning that Nersa also published the reason for the decision regarding this concurrence, considering the submissions from all stakeholders who participated in the public hearings.
In July 2023, the Department of Mineral Resources and Energy (DMRE) submitted a report to Nersa, addressing the suspensive conditions. After ensuring that the report met their standards, Nersa proceeded to maintain the determination of 2021 without the suspensive conditions, allowing the procurement process for 2 500MW of nuclear power to move forward. A clear concurrence was essential for the determination to be gazetted following government protocols.
Thus, the minister of electricity, authorised by the relevant powers outlined in section 34(2) of the Electricity Regulation Act and delegated by the president on March 7, 2023, was appropriately authorised to publish the Gazette for the determination of 2 500MW of new nuclear power generation on January 26, 2024. Therefore, the DA's argument on the matter lacks merit and factual basis.
Outa has a history of opposing a nuclear construction programme in South Africa, using the hashtag #NoNewNuclear and citing many reasons, such as “we cannot afford it. We don’t need it and it is not in the IRP2019”.
Safcei’s recent article accused the DMRE of manipulating the price of nuclear power in the Integrated Resource Plan (IRP) 2023. If the accusation goes uncontested by the nuclear industry, it could lead to a misconception that might be regarded as factually accurate. It’s crucial to note that the IRP2023 is in draft form, and the final version has not been released after the public comments deadline on March 24, 2024.
It is undeniable that evaluating energy technologies for South Africa’s energy mix requires transparency, competitiveness and procedural integrity. However, dismissing nuclear energy solely based on unverified cost concerns is not only misleading but also unfair. Furthermore, the DA, Outa and Safcei seem disconnected from reality as they ignore the widely accepted understanding that achieving net-zero carbon emissions by 2050 is unlikely without integrating nuclear energy.
The viewpoint was reinforced during the World Climate Action Summit at the 28th Conference of the Parties to the UN Framework Convention on Climate Change, where more than 20 countries across four continents launched the Declaration to Triple Nuclear Energy. The declaration acknowledges the pivotal role of nuclear energy in reaching global net-zero greenhouse gas emissions by 2050 and maintaining the 1.5ºC goal.
In addition, the IRP benchmarks rely on a variety of reputable sources to gather information on the cost of nuclear power. This also includes market information obtained through the DMRE’s 2020 Request For Information, and other credible sources such as the Lazard Report.
It is important to note that in December 2023, the DMRE indicated a capital overnight cost range of $2 100/kW (R40 285) to $7 500/kW, encompassing conventional pressurised water reactors and small modular reactors. Also, other sources such as the International Energy Agency (IEA) study on “Projected costs of generating electricity 2020 edition”, estimated a nuclear build programme’s overnight cost ranging from $2 500/kW to $6 920/kW, considering projects across the world.
The IRP2019 emphasises implementing the nuclear build programme at a pace and scale affordable for the country, a principle likely to be pursued in the proposed acquisition of up to 14 500 MW additional new nuclear reactors by 2050, as outlined in IRP2023.
While acknowledging the high initial capital costs associated with nuclear power, it’s important to note its comparatively lower expenses for operations, maintenance and fuel.
Nuclear power boasts an impressive availability factor of more than 85%, a design life of 60 years with potential extension by another 20 years, and an estimated payback period of around 20 years. One significant advantage of nuclear power is that once the initial investment is recovered, the power plant becomes a consistent source of reliable, cost-effective electricity, which supports sustainable employment and positively impacts the economy while maintaining minimal carbon emissions, as seen at Koeberg Nuclear Power Station.
For example, Eskom's Integrated Report compares the primary energy unit cost of various generation categories for 2023, showing nuclear at R106/MWh, coal at R492/MWh, and renewable independent power producers at R1 986/MWh. However, the IEA estimates the energy cost of nuclear for a new build programme at $0.0752 (R1.42)/kWh.
Why are the organisations so adamant about stopping a process of Request For Proposals (RFP) that will finally put the issue of nuclear build cost to rest? The RFP is not merely a bureaucratic process but a crucial step in procurement to gather country-specific cost data. This includes considering various factors in technology selection, such as whether it's an off-the-shelf solution or a unique design, the megawatt capacity per reactor unit, construction time lines and the discount rate.
The process facilitates informed decision-making for countries like South Africa and ensures transparency in cost evaluations. It’s important to recognise that costs can vary significantly among global vendors. This highlights the significance of RFP responses in accurately assessing the costs of South Africa's new nuclear build programme. Therefore, it’s essential for the DA, Outa, Safcei and all South Africans to support the release of the RFP, to gather concrete responses on cost data and then provide informed feedback.
To summarise, while renewable energy technologies like solar and wind have their place in the energy mix, their intermittent nature requires dependable back-up systems or energy storage solutions. The requirement may result in substantial costs and logistical challenges.
In contrast, nuclear energy offers a consistent baseload power source with minimal carbon emissions. Its integration into the energy portfolio enhances energy security and grid stability, particularly during times of peak demand or supply interruptions.
It is time to move beyond ideological divides and embrace a pragmatic approach to energy planning. This includes leveraging the RFP process to gather accurate cost data, evaluating all energy options based on merit and feasibility, and prioritising solutions that ensure long-term energy security and sustainability for South Africa.
Princess Mthombeni, known by many as “Princy”, is a founder of Africa4Nuclear and multi-award-winning communication specialist with more than 15 years in the nuclear industry.
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