Picture: THINKSTOCK
Picture: THINKSTOCK

THE decision to build nuclear power plants in South Africa can be delayed, says the Department of Energy, as revised projections of electricity demand show that new nuclear power will not be required until after 2025 or even later.

It also suggests that if the cost of nuclear power is too high, other options such as regional hydro and shale gas could fulfil the requirement and nuclear procurement should then be abandoned. This is among several revisions made to the updated version of the Integrated Resource Plan (IRP) for electricity, published for comment on the department’s website.

The IRP is a 20-year plan that models demand and supply of electricity and plans for generation needs.

News that the nuclear procurement is to be delayed will be music to the ears of the National Planning Commission (NPC), which has cautioned against committing to an expensive and irreversible nuclear programme, particularly when electricity demand has not grown in line with expectations.

The updated IRP makes a range of proposals, many of which relate to decisions that are keenly awaited by industry. In addition to the delay of the nuclear procurement, it is recommended that the proposed procurement of a "Coal 3" plant proceed but that this is done using fluidised bed combustion technology. Coal 3 would also be far smaller than Medupi and Kusile, with a generation capacity of 1,000MW-1,500MW.

The plan says among the guidelines for future decisions would be consideration of regional hydro projects in Mozambique and Zambia, and coal-generated electricity, among others. In addition, there will be procurement of natural gas in the region and the stepping up of shale gas exploration in South Africa.

Other measures to be looked at include additional rounds of the renewable bid programme and the extension of the life of Eskom’s coal-fired stations.

The planning framework rests on the assumption of lower electricity demand in 2030 than was assumed in the first iteration of the IRP in 2010. Demand in 2030 is anticipated to be 6,600MW lower than was expected at an upper range of 61,200MW.

The plan assumes a strong economic growth rate of 5.4% a year, based on the projections of the National Development Plan.

Deputy director-general of policy and planning in the department Omphi Aphane said the updated IRP took a more flexible approach to the 2010 version to allow for other variables. These included uncertainty of demand, potential for shale gas and other gas developments, the cost of nuclear and future fuel costs.

"It is a robust, flexible approach based on smaller investments rather than the big lumpy ones we have got used to, so that if there is an issue around fluctuating demand, we can respond to it," Mr Aphane said. "While we have aligned the plan with the NDP we want to be able to plan in a way that the planning is done but the investment decision is not triggered until we have a high degree of certainty."

With regard to the decision on nuclear procurement, the IRP says "revised demand projections suggest that no new nuclear base-load capacity is required until after 2025 (and for lower demand not until 2035 at the earliest)".

The 2010 IRP suggested additional nuclear power would be required by 2023. It also suggests regional hydro and shale gas could fulfil South Africa’s power needs if the cost of nuclear power is too high.

These alternatives should be explored, it says, "before committing to a technology that may be redundant if the electricity demand does not materialise".

But Mr Aphane said the delay of the nuclear procurement depended on a range of cascading factors falling into place. In particular, it depended on the extension of the life of Eskom’s existing power stations and the security of a supply of coal for them, which in turn depended on the construction of a rail line from the Waterberg region to Mpumalanga.

The retrofitting of Eskom’s power stations with flue gas desulphurisation is in any event required by air quality regulations and had to take place.

It therefore made sense "to sweat these assets and prolong their life", Mr Aphane said.

NPC commissioner Anton Eberhard said the IRP largely "validated the modelling commissioned by the NPC" that modelled for lower electricity demand and higher nuclear costs. While the updated IRP took much of this into account its estimate of nuclear costs was still too low.

Gareth Blanckenberg, energy analyst at Frost & Sullivan, said "actual nuclear costs would (be) much higher" than the IRP estimates. He raised reservations about the "aspirational" growth rate assumption of 5.4%.