Government says we must have it, but debate still rages over whether it can solve our energy problems, report Antoinette Slabbert and Francois Williams
Government’s plans to build nuclear power plants may be dead in the water as experts warn that it has become unaffordable.
Estimates of the potential cost of a new nuclear power station vary from R400 billion to R1 trillion, depending on the business model.
But it can
safely be assumed that it would cost no less than R500 billion, excluding the cost of delays and escalations, which have proved to be significant, not only in South Africa with its coal-powered projects.
Trade and Industry Minister Rob Davies confirmed after a recent Cabinet meeting that nuclear power plans are going ahead.
According to government’s integrated resource plan (IRP), which outlines power plans to 2030, a total of 9 600 megawatts of nuclear power is planned.
That is about equal to the combined Medupi and Kusile coal-fired power stations that are currently being built at a cost of more than R200 billion.
Ben Martins, the minister of energy, confirmed at the end of July that this is still the plan, and that the national executive coordinating committee for nuclear power, under the personal leadership of President Jacob Zuma and a technical team, will make the necessary decisions.
Nelisiwe Magubane, the director-general of energy, told Engineering News earlier that a study on the cost of new nuclear power plants could be completed by this month and a decision on the type of contract and shareholding in the power stations could follow in November.
Eskom will be the majority shareholder.
But experts believe the window of opportunity for nuclear power has passed as it becomes increasingly unaffordable.
It has long been argued that nuclear plants are more expensive to build than coal power stations, but that its running costs are much lower. This is now under debate.
Comparing the costs of the different technologies is not a simple task, says Pieter Stoker, a professor at the Centre for Continuing Engineering Development at North-West University.
Along with his colleague, Professor Johan Fick, he has calculated that the comparable cost of electricity from nuclear power – including capital and operating costs – can range from 92c/kWh under optimum conditions to as much as 134c/kWh. On the same basis, the cost of power from coal is 79c/kWh.
Stoker said the comprehensive security measures for nuclear power stations and compulsory provision for rehabilitation after the closure of nuclear power plants pushes the costs up.
At a conference on electricity supply in South Africa earlier this month, University of Cape Town business school professor Anton Eberhard said that the capital cost of nuclear power stations fluctuates widely, from about $2 000 (R20 500)/kW in China to $7 000/kW and more in Europe and the US.
Construction costs are usually significantly more than the initial budget and the work is rarely completed within the estimated time.
He said countries in Europe and the US are beginning to move away from nuclear power.
In China and Korea, nuclear power stations are completed at lower costs, but they do not have the experience to build such plants in other countries.
The structure of an agreement on the construction of nuclear power stations is something government should think about very carefully, according to energy experts.
Problems with labour relations and substandard work at Medupi, resulting in additional costs and delays, raise serious doubts about whether Eskom can manage such a complex project.
A comprehensive contract – where the contractor accepts full responsibility and simply hands over the completed project – is an attractive model.
“But Eskom should not try to manage it themselves,” said an energy expert who wished to remain anonymous.
Eberhard said the Russian group Rosatom, which is already lobbying in South Africa, is building a nuclear plant in Turkey that it will own and run. This model, he said, is financially viable.
Eberhard asked why the buying process for nuclear power stations is handled differently – by a special committee chaired by Zuma – than those for renewable energy projects, for example.
The IRP is outdated, he said. Demand for electricity is falling and consumers are making their own plans for power. To base megaprojects
on outdated data could lead to oversupply and will be disastrous for the economy, he said.
Magubane did, in fact, say earlier that the IRP is being reviewed and the deadlines will probably be extended. Provision could be made for more power generation from gas and the inclusion of more private power producers. She added, however, that the nuclear power plans are still firm.
Other power sources
» Shale gas:
Fracking and horizontal drilling technology have turned the US’ power industry upside down. The same could happen here, as South Africa may have the world’s fourth-or fifth-largest shale gas reserves. But reserves can only be proven once exploration begins. Some are strongly opposed to fracking because of the possible contamination of groundwater.
» Natural gas:
Huge gas fields have been discovered off the coasts of Mozambique and Angola, and foreign firms are now looking for oil and gas on the South African coast. The Ibhubesi gas field on SA’s West Coast is yet to be developed. Imported liquefied natural gas or local natural gas can be used quickly and stations can be built faster and cheaper than nuclear and coal power plants.
» Wind power:
The construction of wind-power infrastructure is already cheaper than for new coal stations, but they only provide between 20% and 30% of the available capacity owing to the irregularity of wind. In terms of the IRP, wind power will supply between 4% and 5% of South Africa’s electricity by 2030, though it will represent about 20% of the total capacity.
» Solar power:
Photovoltaic solar power will soon cost as much as new coal-fired power, but will supply only 5% of South Africa’s electricity by 2030. An increasing amount of private enterprises are using solar power. Concentrated solar power has great potential for SA, but it is more expensive than other options.
Government has just announced plans for a third new coal-fired power station, but the construction of the Medupi and Kusile plants has been dragging on for two years already. Coal prices are rising while solar and wind energy are free, but SA has enough coal for another 200 years. Due to age, older coal power stations will close down from 2023. New coal-fired power stations will have to have expensive technology in the future to capture and store carbon dioxide to limit greenhouse gas emissions.
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