Posted by News Express | 8 September 2016 | 2,882 times
South Africa’s long-awaited procurement of nuclear power stations will kick off on September 30, when the government issues the formal request for proposals, the country’s Energy Minister Tina Joemat-Pettersson said in Parliament on Wednesday.
In June 2014, President Jacob Zuma set the procurement of 9.6GW of nuclear power as a top priority of his second term of office but political and legal opposition and controversy has held up the process.
Joemat-Pettersson, answering questions in the National Assembly, said the request for proposals “would test the market”. The bids will be the first indication of what nuclear energy will cost, as the Department of Energy has refused all requests for information on the studies it has performed on the cost of nuclear energy.
Bidders are also expected to submit financing proposals.
There is fierce debate among energy experts on whether SA can afford nuclear energy and if so, how much is needed and by when. The absence of an updated Integrated Resource Plan (IRP) – which projects energy demand, makes generation plans and determines the energy mix – has frustrated this debate.
The IRP was last published in 2010 and, according to the government’s own policy, should be updated every two years.
However, updated versions have been less nuclear friendly than the 2010 version and, moreover, the government has yet to adopt them.
The very latest attempt at an update submitted to the department earlier in 2016 stalled on an appropriate cost for nuclear energy, particularly when compared with renewable energies, where the price is falling.
The department has now promised that an updated IRP will be ready by December.
While the procurement process will now finally begin, it still remains the subject of a court challenge and could be overturned. Earthlife Africa and the Southern African Faith Communities Environmental Institute are asking the High Court in Cape Town to declare the process unlawful on the grounds that the state signed agreements on nuclear co-operation with foreign governments before making a determination under the Electricity Regulation Act.
They also argue there has not been sufficient public consultation on nuclear power.
The minister also answered questions on the future of the renewable independent power producers’ procurement programme, which recently came under fire from Eskom.
The power utility has said their electricity, which Eskom is obliged to buy, is in excess of demand and is expensive.
Joemat-Pettersson said her department was in discussion with Eskom, the Treasury and the Department of Public Enterprises about Eskom’s concerns around the independent power-producer programme, and the government would adopt a position on the issue once these consultations were finalised.
“At this point, the independent power-producer programme continues in its current shape and form, and continues to form an important part of our energy mix,” she said. However, the minister said the bid round 4.5 was under discussion between Eskom and the department, and she was “sure, we will be able to resolve this matter quite soon.”
On the subject of the sale of SA’s strategic fuel stocks in December 2015 by the Strategic Fuel Fund, Joemat-Pettersson told Parliament that she had appointed an independent review panel to assess the transactions.
The fund sold SA’s entire stock – 10-million barrels – at well below market value on the justification that “a rotation” of stocks was required.
The fund said it would replace the stocks when market conditions were right, but the oil price has since doubled, implying a large loss for the fund. The minister said the documentation around the disposal – which she had authorised, subject to certain conditions – had also been submitted to the Treasury and the auditor-general.
A full inquiry would take place before any further rotation of stocks was allowed to take place, the minister said in reply to a question by DA MP Pieter van Dalen. She said the strategic stocks were still in South African tanks and had not left the country.
However, Business Day has previously reported that, while the oil is still in the storage tanks of the fund, the fund no longer owns them, and they would have to be repurchased from the owners if required.
•Adapted from a Business DaySouth Africa report. Photo showsa nuclear power station.