NO NATION, and most certainly not a developing one, should strive to use less electricity, but should rather strive to use more electricity, efficiently. There is a simple correlation in economics — the greater the availability and use of electricity, the larger the economy becomes. The two seem to grow in absolute unison.
The experience of developed countries has clearly shown us that the electricity sector played a fundamental role in their economic development, not only as a key input in their industrial development, but also as a key factor in improving the quality of life of their people. Recent studies have also indicated that there is a stronger correlation between electricity use and wealth-creation than there is between total energy use and wealth.
There seems to be a misconception in the country that a large sum of money — the talk is of more than R1-trillion — will simply be shipped out of the country and in return, we will acquire nuclear power plants. This cannot be further from the truth. The aim of this project, in line with the National Development Plan (NDP), is not to supply the country with affordable and clean base-load electricity only, but to also to create much-needed jobs, help reindustrialise the country and in essence, boost the economy.
When one looks closer at a nuclear power plant, one soon realises that almost everything, besides the nuclear island (the area containing the reactor and spent fuel storage), is similar, if not the same as a conventional thermal power plant. Steam turns a turbine, which drives a generator, which produces electricity.
This is the same process used across nuclear, conventional thermal and coal plants to generate electricity, the only difference being the heat source.
Coal-fired power stations currently provide almost 90% of SA’s power and the country is constructing two of the largest and most complex coal-fired power stations in the world. The local industry is therefore well versed in this technology. So when one considers the fact that the conventional island makes up a substantial portion of the entire project, it becomes easier to see the huge potential for local participation.
One also needs to consider the civil work, which makes up a significant portion of the project. We are not going to be importing sand, cement and bricks, nor will we be importing the labour.
There is also the huge amount of related industry that needs to be taken into account. Indirect spin-offs include increased road infrastructure, accommodation, retail stores, hospitals, micro-industries, farming and schools, to name a few.
All this considered, it becomes far clearer that a nuclear build programme will bring with it an immense amount of economic growth to the area it is built in.
Another point that should not be overlooked is the fact that nuclear requires the highest number of skilled workers per 1,000MW of installed capacity of any power source. According to a paper published by the Nuclear Energy Institute, nuclear requires 500 skilled workers per 1,000MW whereas coal requires 220, wind 90 and natural gas only 60.
This in itself has a positive effect on the economy — skilled workers are far better paid, which leads to increased spending levels in the economy, which drive sales, which require higher production numbers, and this, in turn, creates a higher demand for more electricity. It is very much a chicken-and-egg scenario. What comes first: more electricity or economic growth?
According to the Department of Planning, Monitoring and Evaluation, load shedding is currently costing the country up to R11bn per month; for every kWh lost due to load shedding, it costs between R9 and R15, mainly in damage to machinery, equipment and labour. Compared to Eskom’s average cost of 67c/kWh, it becomes absolutely clear that a far greater capacity of base load is needed. These losses do not factor in the potential investments lost from the global market due to low investor confidence brought on by power disruptions.
Taking this into account, it is not surprising to learn that load shedding is costing our economy an estimated 2% growth per annum. There are two major issues in SA that are negatively affecting investor confidence — labour issues and the power shortages. One of these is relatively easy to remedy. With an affordable and stable electricity base load, the country can expect to see an influx of new investors. Let us not forget that SA is still seen as the springboard into Africa.
Nuclear has to be part of the energy mix. By broadening and expanding our nuclear industry, we can lead in providing expertise and industrialisation for the rest of the continent. One of the responsibilities of being an economic power-house in the region is our ability to provide the much-needed technological and industrial leadership.
• Msebenzi is MD of the Nuclear Industry Association of SA