South Africa Takes Another Run for Nuclear Energy
- May 9, 2020 9:25 pm GMTMay 9, 2020 9:27 pm GMT
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- South Africa to Make Another Run at Nuclear Energy
- Czech Government Takes New Steps for New Nuclear Power at Dukovany
- European Union May Reject Challenge to UK Over Hinkley Plant
- Barakah / Coronavirus Will Not Delay Arab World’s First Nuclear Station
South Africa Plans to Issue a Request for Information
for 2,500MW of Generating Capacity
South Africa’s Director of Mineral Resources and Energy Gwede Mantashe told the nation’s legislative body last week that his agency is developing a road map for 2,500MW of nuclear-powered generating capacity with the procurement process completed by 2024.
The plan is to allow vendors to self-finance 100% of the cost which means the national government will not provide any funding. This policy opens the door to all types of technologies and reactors sizes from big iron at 1,000MW or more to small modular reactors (SMRs) that range from 50-300MW.
The agency said it will issue a request for information to assess the market with a focus on SMRs. However, Mr. Mantashe said that all options are being explored and if the market indicates one design is more affordable and can e built more efficiently; he wants to go with it. However, he did not say when his agency would expect a vendor to break ground nor did he specify LWR v. advanced reactor designs as preferences.
He told the Reuters wire service, “We may give a company a right to develop a nuclear station (modular or other) on a build, operate, and transfer basis. It means there is no immediate funding from the state.”
The announcement immediately ran into significant challenges. Opposition leader Kevin Mileham questioned whether the 100% vendor financed approach would work and discounted the feasibility of the short time line to issue and evaluate a tender for the reactors.
Additionally, he pointed to the national government’s Integrated Resource Plan (IRP) for 2019 which he said makes no mention of nuclear energy at least the next decade.
The Mining Weekly, a trade publication, checked the IRP found that there is a brief mention of “preparations for nuclear energy,” but no mention of a specific level of generating capacity nor a timeline for a procurement nor starting work on a new power station.
In 2018 South Africa halted an ambitious plan put forward by then President Jacob Zuma that would have inked a deal with Russia’s Rosatom for eight 1,200 MW VVER nuclear reactors at a projected cost of between $30-to-$50 billion dollars. Rosatom’s terms were that it would provide 50% of the financing.
The plan died for three reasons. The first is that is South Africa couldn’t afford it, even with generous financial terms from any vendor, given the condition of its economy. The second is that 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 came about as a result of a “secret” meeting between Zuma and Russian President Vladimir Putin in a side meeting at a development conference in Brazil. No tender had been released for the project prior to that meeting.
Separately, the nation’s economy has been hobbled by a series of electricity brown outs due to a lack of electrical power and an aging grid infrastructure. Eskom, the state owned utility, has been thwarted in its requests to raise rates as the government uses cheap electricity as a way to address the appalling levels of 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 Coronia virus 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). In April the Fitch rating service downgraded ESKOM’s massive unsecured debt as a result.
Conditions for financing a new nuclear program remain difficult as the country’s economy, like many others, has taken a deep dive into a major recession adding to the country’s budget deficit.
South Africa has one nuclear power station which is the Koeberg plant that was connected to the grid in 1984. It is composed of two 970 MW PWR type units.
Czech Government Takes Steps for New Nuclear Power at Dukovany
In late April the Czech government achieved a long sought after goal. It approved an agreement with the state-owned nuclear electric utility CEZ to build and commission a new nuclear power station the Dokovany nuclear site by 2036.
While the government owns just under three-quarters of the shares of CEZ, private, institutional investors have long objected to a new nuclear power project citing the risks of cost escalation.
The log jam of opposition broke because the government has agreed to several stipulations including an agreement to buy power from the plant at guaranteed rates rather than allowing market auctions to set the price. Also, CEZ could build and operate the plant for a set period of time and then sell it back to the government at an unspecified future date.
Some financial analysts believe that CEZ may have to buy out the shares of those institutional investors who object to the project in order to proceed with it.
Industry Minister Karel Havicek told the Reuters news wire service that the price of power would be determined by “the justified costs and reasonable profit” for CEZ.
He said the plan is for the state to buy the power directly from the utility at an agreed upon price and then sell it to customers via power exchange market either at a profit or taking a loss depending on market conditions.
The government is positioning nuclear energy as a “low-emission source” based on European Union rules. It believes that this designation will help reduce the costs of the plants.
The new plant is expected to be built with a generating capacity of at least 1,200MW and at an estimated cost of $5.6-$6.4 billion ($4,600-$5,300/Kw) which is in line with current global overnight costs for new reactors. However, given that the project won’t break ground for at least another six-eight years, these estimates could change.
Potential bidders on the project include Russia’s Rosatom, China, South Korea’s KHNP, France’s EDF, and Westinghouse in the U.S. as a supplier but not as the EPC.
The Czech Republic, once held behind the Iron Curtain by Russia, has a long-standing aversion to being pulled into Russia’s energy orbit but President Milos Zerman, a member of the nations old guard, born in 1944, thinks Rosatom should be considered for the project.
In the last round of tenders for new reactors, the Czech government disqualified Areva, now EDF, from the bidding leaving only Rostom and Westinghouse in the running. It subsequently got cold feet over committing to a new build and canceled the procurement altogether in 2014.
European Union May Reject Challenge to UK Over Hinkley Plant
The top court of the European Union is expected to reject an attempt by Austria to block the UK government support for nuclear power at the Hinkley Point C project, which is building two 1650 MW EDF PWR type nuclear reactors.
A key adviser to the court, Advocate General Gerard Hogan, said in a non-binding opinion that a ruling by a lower court rejecting Austria’s claims should be upheld.
Austria claimed in 2015 that the decision by the European Commission to allow the UK government to provide aid to the project with guarantees for credit and a fixed price for electricity rates violated EU competition rules, failed to account for renewables, and disregarded environmental concerns.
Hogan said the environmental argument was not germane since the rules about financial aid don’t include them. He said that the EU rules provide that each member state can determine its own energy mix.
Austria has a long record as an anti-nuclear thorn in the side of EU members. Its stance on the UK project was one of the underlying causes of PM David Cameron’s decision to seek a BREXIT vote on leaving the EU.
Barakah / UAE:
Coronavirus Will Not Delay Arab World’s First Nuclear Power Station
(NucNet) Operations at the Barakah nuclear station in the United Arab Emirates are “on schedule” despite the coronavirus pandemic, with first criticality at the first unit expected “very soon,”
Mohammed Al Hammadi the chief executive of the Emirates Nuclear Energy Corporation (ENEC) said in a statement via video link to Washington-based Atlantic Council, a think tank, that “the first criticality at reactor number one will be ‘very soon.” (Full report from the Atlantic Council at its website),
Mohammed Al Hammadi explained that, as a result of rigorous measures taken at the Barakah construction site, the Covid-19 virus had not affected the timetable for completion.
“We are planning to go critical very soon. In a couple of weeks or month or so from now. We are targeting to get the units operational and start putting power to the grid before the end of the year.”
The four-unit nuclear station on the Persian Gulf coast of Abu Dhabi, is the first commercial nuclear energy facility in the Arab world. The cost of the facility, which has four South Korea-suppled APR1400 units has been put at $24 billion
The ENEC head said leadership at the corporation had worked quickly to assess the “multifaceted crisis” presented by the pandemic.
“We assessed the situation that we were in seven weeks ago. We did stop all the non-essential work at Barakah. We demobilized people from the head office to 90-100%. Almost everybody is working from home,” Mr Al Hammadi said.
“They looked at the construction site. Priority number one was to keep people safe and keep covid-19 out of Barakah. That was the ultimate goal. Nothing else.”
He explained the site was swiftly locked down and workers were monitored and tested. As a result, there have been no covid-19 cases at the site.
First fuel loading was completed in March at Barakah-1 after the receipt of an operating license from the Federal Authority for Nuclear Regulation in February. The license authorizes the plant’s operation for 60 years. Construction of the 1,345-MW Barakah-1 began in 2012 and was completed in 2018.
ENEC said the plant is now ready for teams from Nawah, the operations and maintenance subsidiary of ENEC and Korea Electric Power Corporation, to start operating the plant.
ENEC is in the final stages of construction of the remaining three units at Barakah. The overall construction of the four units is more than 93% complete. Unit 4 is more than 83%, Unit 3 is more than 91% and Unit 2 is more than 95%.
The four units at Barakah will generate up to 25% of the UAE’s electricity demand once all four of them are online.
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