Zizamele Mbambo.  Picture: SOWETAN
Zizamele Mbambo, left. Picture: SOWETAN

THE government on Tuesday put a speculative number to the costs of the nuclear build programme, saying that similar build programmes in like countries had cost in the region of R500bn.

This is the first time that government officials have put forward their expectations of what the programme will cost. However, the estimates are not based on real financial modelling but rather on what similar plants have cost elsewhere in the world.

The R500bn is an "overnight cost" — what it would cost to build in a day — and excludes financing costs. It also excludes critical dimensions of a nuclear power programme such as the costs of dealing with nuclear waste, decommissioning and insurance in the event of an accident, all of which are borne by governments rather than nuclear vendors.

During a briefing at Zimbali lodge near Durban on Tuesday on the nuclear build, the deputy director-general of the Department of Energy, Zizamele Mbambo, said that accurate costing and modelling had been done but could not be shared with the public.

"These studies have confirmed that this programme is fundable and will contribute positively to the economy of the country," he said.

However, as the government was "still to negotiate the price tag in the procurement process … exact figures for the study cannot be made available at this stage," he said.

The R500bn estimate comes from a comparison of construction costs in countries that are "newcomers" to nuclear power and include the United Arab Emirates (UAE), Pakistan, Turkey and Belarus. Costs in these countries, said Mr Mbambo, were in the region of $4,200 per kilowatt. For South Africa’s proposed programme of 9.6GW of nuclear power, this would amount to about R500bn at the present exchange rate.

International nuclear energy critic Steve Thomas, a professor of energy policy at Greenwich University, said that none of the countries being used for price comparison allowed for any accuracy of prediction. The plants in Pakistan were built too long ago to allow for a comparison; the UAE plant was lacking in basic safety features that South Africa would need to include; the Turkey build had not yet begun due to wrangling over financing; and the Belarus plant had gone 70% over budget.

"The only recent comparison that can be made is the plant being built in the UK at Hinkley Point, for which the cost is $8,000/kW," he said.

As an illustration of what financing costs would add to the overall price, the Hinkley Point plant has an overnight cost of £16bn but when financing costs are included the figure rises to £24.5bn, said Prof Thomas.

Energy Research Centre director at the University of Cape Town Harald Winkler criticised the government for refusing to reveal its financial modelling.

"It is not transparent for government to say they have completed financing studies, but will not tell the public what those show. If South African taxpayers or electricity customers will be asked to foot the bill of the nuclear deal, then we deserve to know exactly how much and by what mechanism we will be asked to pay it back."