THE government is determined to press on with its nuclear build programme at a potential cost of up to R1-trillion.
This is despite the National Development Plan (NDP) and the Integrated Resources Plan, the government’s own electricity master plan, advising that a more flexible approach to energy supply is needed.
Delivering her budget vote speech in Parliament on Monday, Energy Minister Tina Joemat-Pettersson said the "nuclear expansion option is a central feature in our future energy mix". It would help with the emissions reduction target that the country had set itself.
It would also catapult South Africa "into the top echelons of the knowledge economy".
The plan was to introduce 9.6 GW of nuclear energy in the next decade, in addition to supply from the Koeberg power station, Ms Joemat-Pettersson said. "Our country’s track record in running a nuclear programme speaks for itself.
"Apart from Koeberg for power generation, our current programme includes Pelindaba, currently one of the world’s biggest producers of medical radioisotopes from low-enriched uranium.
"We are therefore not starting from zero base; in fact, we want to build on the expertise and skills base that already exists in the country."
Democratic Alliance MP Lance Greyling said Ms Joemat-Pettersson had to answer the "fundamental question" of how South Africa was going to pay for the construction of the new power stations. "There are only two realistic ways to pay for the nuclear build programme.
"Either the fiscus stumps up the money, but it can’t do that due to the tight economic constraints. The other way is through hiking electricity prices and we have already heard Eskom say they would have to increase tariffs at a rate of 24% per year for at least five years."
Mr Greyling said Eskom had already accumulated a government-guaranteed debt of R250bn. Therefore, Ms Joemat-Pettersson " has to tell us how much electricity prices have to go up to finance this nuclear build programme".
Many opposition politicians and experts who have questioned the nuclear programme warn that it will not be the silver bullet to solve the country’s energy crisis.
South Africa consumes about 35GW of electricity each day with a total generation capacity of about 40GW. This means that the reserve margin is extremely small, and when one major power plant has a problem, it affects the entire grid.
Mr Greyling said what the government should instead be examining was a more flexible approach to electricity as articulated in the NDP.
This would require bringing in more, smaller independent power producers that would reduce the points of failure and reduce upfront costs.
Anton Eberhard, a national planning commissioner and University of Cape Town professor, said on Monday the commission had raised questions about the cost, finance and timing of decisions on additional power stations. "The latest Integrated Resource Plan (updated in November) confirmed all those as being issues.
"Considering there is also depressed demand for electricity, there is no urgency in making the nuclear decision," Prof Eberhard said. "If it emerges that the cost of nuclear-generated electricity is above $6,500 per kilowatt-hour, other options are an attractive financial reality."
Nuclear Africa CEO Kelvin Kemm welcomed Ms Joemat-Pettersson’s announcement, saying that the nuclear build programme would boost the economy. "I would be happy if the investment in nuclear went to R2bn-R3bn as it would mean a large investment in the economy.
"South Africa would develop the capacity to build and export nuclear equipment such as valves and pumps ."
Ms Joemat-Pettersson said she intended to "focus on and accelerate" all the outstanding matters that would lead to the start of the nuclear programme as envisaged in the Integrated Resources Plan.
"These include the localisation, financing, funding, skills development, fuel cycle and uranium beneficiation strategies to support the build programme ."
Ms Joemat-Pettersson said the process to establish a Cabinet energy security subcommittee, as President Jacob Zuma had directed, was being refined.
The Cabinet would pronounce on the matter shortly.
"The establishment of this structure will contribute immensely to positioning the energy sector at the apex of our National Development Plan," Ms Joemat-Pettersson said.
"During the course of this year we will review the operations of the Department of Energy and will seek to position the organisation to respond to the tasks as set out by the president."