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South Africa / Policy Announcement Opens Door To All Types Of Nuclear Technology, Including SMRs

Dan Yurman's picture
Editor & Publisher, NeutronBytes, a blog about nuclear energy

Publisher of NeutronBytes, a blog about nuclear energy online since 2007.  Consultant and project manager for technology innovation processes and new product / program development for commercial...

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By David Dalton, Dan Yurman - 22 July 2020

(NucNet) South Africa’s announcement that it is developing a roadmap for 2,500 MW of nuclear-powered generating capacity signals a policy revival that opens the door to all types of technologies and reactor sizes from 1,000MW at the higher end to Generation IV small modular reactors (SMRs) that range from 50-300MW.

The plan is to allow vendors to self-finance 100% of the cost which means the national government will not provide any funding.

Mineral resources and energy minister Gwede Mantashe said his agency will issue a request for information to assess the market with a focus on SMRs. However, he said all options are being explored and if the market indicates one design is more affordable and can be built more efficiently, he will go with it. He did not say when his agency expects a vendor to break ground, nor did he specify a preference for any particular reactor designs.

He said: “We may give a company a right to develop a nuclear station on a build, operate, and transfer basis. It means there is no immediate funding from the state.”

The nuclear plans are a significant development on what has been a long and sometimes controversial effort by South Africa to add to its existing commercial nuclear capacity.

In 2018 plans to expand nuclear capacity by building up to 9,600 MW of new plants were put on hold with nuclear excluded from an integrated resource plan (IRP) because the government saw electricity generation from other sources as cheaper and because there was a lower demand for electricity than forecast in an earlier plan in 2010.

The IRP called for nuclear capacity to remain at 1,860 MW (net) by 2030, which means there will be no change.

South Africa’s only nuclear station at Koeberg has two pressurized water reactor units that have been in commercial operation since 1984 and 1985. In 2019 their output accounted for 6.7% of the country’s electricity production, according to the International Atomic Energy agency. 

The plan was drawn up a year after the Western Cape High Court said a series of preliminary procurement deals for new nuclear between the government of South Africa and Russia, China, the US, South Korea and France were illegal.

The court ruled in April 2017 that the procurement process was unconstitutional and illegal as it was not sufficiently public and did not involve adequate environmental and financial assessments. After the verdict, then energy minister Mmamoloko Kubayi said the government would go ahead with the signing of five new intergovernmental agreements with potential international partners, but this never happened and ambitious plans for up to 9,600 MW of new nuclear capacity were dropped.

That plan, put forward by then president Jacob Zuma, would have seen South Africa sign a deal with Russia’s state nuclear corporation Rosatom for eight 1,200 MW VVER nuclear reactors at a projected cost of between $30-to-$50 bn. Rosatom’s terms were that it would provide 50% of the financing.

The plan died for three reasons. The first was that South Africa couldn’t afford it, even with generous financial terms from any vendor. The second was that Mr Zuma’s administration was rife with allegations of corruption and nepotism. The third was the lack of transparency related to how the procurement process for the deal was done.

It was said to have come about as a result of a “secret” meeting between Mr Zuma and Russian president Vladimir Putin in a side meeting at a development conference in Brazil. No tender had been released for the project before that meeting.

Separately, the nation’s economy has been hobbled by a series of electricity blackouts due to a lack of electrical power and an aging grid infrastructure.

Eskom, the state-owned utility that also operates Koeberg’s two reactors, has been thwarted in its requests to raise rates as the government uses cheap electricity as a way to address poverty in the country. The government has also declined to subsidize Eskom directly.

A proposed turnaround plan for Eskom has been put on hold due to the coronavirus pandemic. Eskom’s turnaround plan includes proposed debt transfer to the government, cost containment, operational reforms and the company’s unbundling into three separate entities: generation, transmission and distribution.

The latest announcement from Mr Mantashe immediately ran into significant challenges. Shadow minister of mineral resources and energy Kevin Mileham questioned whether the 100% vendor financed approach would work and said the timeline for issuing and evaluating tenders might not be feasible.

Additionally, he pointed to the IRP, which he said makes no mention of nuclear energy at least for the next decade. In fact, the IRP makes brief mention of “preparations for nuclear energy”, but does not mention a specific level of generating capacity or a timeline for a procurement.

Meanwhile, the need for new baseload generation remains. Africa’s inability to generate enough electricity continues to hamper economic growth, cutting 2% to 4% off GDP every year, according to the Africa Progress Panel.

Nuclear could be part of the solution, but financing remains an issue. Nuclear plants are relatively cheap to operate, but are expensive to build and require significant upfront capital with a long wait for any return on investment.

The Nuclear Industry Association of South Africa (Niasa) has proposed six possible funding options for new nuclear, but government officials have suggested the most likely is a “build, own, operate and transfer” (Boot) model similar to that used by Russia for project including Akkuyu in Turkey.

Niasa had earlier welcomed Mr Mantashe’s announcement of plans to produce a roadmap for new nuclear power plants, saying it gives the requisite policy certainty which “enables industry to respond accordingly”.

The government remains cautious. Mr Mantashe said it will “test the market” to hear what potential investors and consortia have to say about building a new nuclear facility.

Options being considered include giving a "right to develop a modular nuclear station on a build, own, operate and transfer basis," which means there may be no immediate call for state funding” he said.

“We are going to explore all options, when there is appetite for nuclear in the market we will go ahead with it,” Mr Mantashe added.

A 2019 International Energy Agency report said electricity generation from nuclear energy is likely to increase only slightly in South Africa by 2040, but could see a bigger jump if policies are enacted to develop the continent’s energy sector.

Those policies would include faster economic expansion accompanied by the full achievement of key sustainable development goals by 2030. Those goals, including full access to electricity, would allow economies to grow “strongly, sustainably and inclusively”, the IEA said.

South Africa / SMRs Could Be Built On Decommissioned Coal Sites, Says Industry Association

By: Dave Dalton, Dan Yurman

(NucNet) Small modular reactors could be located on the sites where South Africa is decommissioning coal plants as a way of taking advantage of existing infrastructure, the Nuclear Industry Association of South Africa has said.

SMRs located on South Africa’s coast could additionally be used for water desalination, Niasa said.

“The small units are quite flexible in terms of location,” Niasa said.

“Instead of investing in huge transmission lines where they do not already exist, these units can be sited as close to the load centres as possible. They can also be located inland as they typically require much reduced cooling water.

“There is opportunity in South Africa for retrofitting SMRs where coal plants are being decommissioned, thereby taking advantage of existing infrastructure.”

“This will make communities around current coal power stations sustainable into the future.”

SMRs are nuclear reactors with a capacity of less than 300 MW. As electricity demand increases, the number of SMR units on a site could be increased to meet that rising demand.

Because of their modular design, key SMR assemblies and sub-assemblies would be produced in a factory, which would greatly reduce the construction time for a SMR nuclear power plant (NPP). Manufacturing of these components in a factory would also allow for superior systems of quality control.

Earlier this year energy minister Gwede Mantashe’s announced plans to produce a roadmap for new nuclear power plants in South Africa with a total capacity of 2,500 MW. The country’s only existing commercial nuclear station is the two-unit Koeberg near Cape Town.

Options being considered include giving a "right to develop a modular nuclear station on a build, own, operate and transfer basis," which means there may be no immediate call for state funding” he said.

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