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South Africa still to set price for nuclear build

15 July 2015

The government still has to negotiate the price for the procurement of nuclear power in South Africa, according to the Department of Energy.

It had completed various technical studies, including in depth studies into the cost of nuclear power, funding and financing models and economic impact of localisation, among others, deputy director-general for nuclear energy Zizamele Mbambo said yesterday.

"It is important to note that government is still to negotiate the price tag in the procurement process which is why exact figures for the study cannot be made available to the public at this stage. These studies were done to ensure that South Africa is a knowledgeable customer," Mbambo said at a press briefing in Ballito, KwaZulu-Natal on the status of the country's new build nuclear energy programme.

The procurement process would start in the second quarter and be completed by the end of the 2015 financial year with the selection of either a single or a group of strategic partners, he added.

Six to eight nuclear power plants

The first new nuclear power station would come on line in 2023. The government intended to build between six and eight nuclear power plants, and the bid invitation specification and related evaluation criteria would be finalised by the end of July, Mbambo said.

"It is important to note that government is still to negotiate the price tag in the procurement process which is why exact figures… cannot be made available to the public at this stage."

Mbambo gave examples of the current world experience, saying the current world experience for quoted numbers for real export would indicate an overnight cost of about $5-billion per 1 200 megawatts, which is equivalent to $4 200 per kilowatt per reactor in new comer states.

"In countries with established domestic construction programmes, such as China, South Korea and India, the prices in order of $2 500 per kilowatts are being quoted. Among the 70-plus reactors in the world, there are a number of projects where because of the local market and political conditions the project costs are higher than these figures."

The government was expected to complete its financing arrangements for the new build programme shortly.

Mixed energy plan

In March 2011, the Cabinet approved and promulgated a 20-year Integrated Resource Plan (IRP 2010-30), which is the government's electricity plan. It has a mixed energy agenda that puts nuclear at 23% (9 600 MW) of energy source by 2030.

The briefing followed the submission of the Inter-Government Framework Agreements on nuclear co-operation to Parliament.

These agreements laid a foundation for co-operation, trade and exchange of nuclear technology as well as procurement, according to the department.

Going forward, Mbambo said, the government planned to follow the approved procurement process that would include a competitive, transparent bidding process that was cost effective and in line with legislation.

Infrastructure review

Work already done towards the nuclear build programme was extensive. Over and above the inter-governmental agreements, the International Atomic Energy Agency has conducted an Integrated Nuclear Infrastructure Review (INIR) mission, which is an assessment of the country's infrastructure as it relates to readiness to start purchasing, constructing, and operating nuclear power plants.

Of the 10 recommendations made by the panel, several have been completed; others are being reviewed. Strategies have been drawn up in line with the recommendations.

The department has also undertaken study tours to various nuclear vendor countries to learn about the technologies they use and the lessons they have learned in using nuclear energy.

Vendor parades have been held, with South Africa professionals from government departments, state-owned entities and universities interrogating the vendors' technological offerings.

"The vendor parade workshops provided a platform for South Africa professionals to exchange views with their peers on the nuclear new build programme."

Skills development

In addition, in preparing for the nuclear new build programme, national skills development is being undertaken.

Mbambo said 50 trainees from the government, entities and industry were sent to China for Phase 1 nuclear training in April. "Plans are under way to send an additional 250 trainees to China this year. Additionally, a memorandum of agreement on skills development was entered into between Necsa [South African Nuclear Energy Corporation] and State Nuclear Power Technology Co-operation of China."

Russia had offered 10 scholarships for Master’s degrees in nuclear technology. A memorandum of understanding had also been signed covering the training and development of 200 South Africans at Russian universities and educational organisations.

South Korea had an existing programme to train South African students for Master’s degrees in nuclear engineering; already three students had graduated.

Finally, France had put in place 14 bursaries for young people from previously disadvantaged groups to study a four-year engineering programme at various universities.

"The negotiations on Nuclear Skills Development with the French government are at an advance stage that could see an establishment of a nuclear campus in South Africa," Mbambo added.

"Government remains committed to ensure energy security for the country, through the roll out of the nuclear new build programme as an integral part of the energy mix. Government remains committed to ensuring the provision of reliable and sustainable electricity supply, as part of mitigating the risk of carbon emissions," he said.

The nuclear new build programme would enable the country "to create jobs, develop skills, create industries, and catapult the country into a knowledge economy".

SAinfo reporter