Study pours cold water on SA’s nuclear build plan

NEW National Planning Commission (NPC) modelling of South Africa’s energy demands says nuclear power should be delayed by years, and an immediate commissioning of new gas-generation capacity should take place to avoid rolling blackouts in the near future.

The remodelling commissioned by the NPC signals the start in earnest of what will be a highly contested policy debate: whether South Africa needs and can afford nuclear power or not, and by when.

The implication of the modelling is that no new nuclear power would be required before at least 2029, but more likely as far away as 2040 if demand grows as expected. It had been envisaged that new nuclear power would come on line in 2023.

It also means the Department of Energy should act promptly to procure imported liquefied gas and gas power stations to avoid blackouts in the highly likely event of delays to the completion of Eskom’s Medupi and Kusile coal-fired power stations.

The commission’s initiative in undertaking the modelling comes in the wake of a delay in the revision of the department’s Integrated Resource Plan 2010 (IRP2010), which should be updated every two years.

Department director-general Nelisiwe Magubane told Parliament’s energy portfolio committee this week that the IRP2010 would not be updated before the end of the year as it depended on finalising a broader energy plan.

The modelling exercise, undertaken on behalf of the commission by the Energy Research Centre at the University of Cape Town, said such a delay in updating the IRP2010 could be disastrous.

"Ignoring this new information and fixing decisions, including a large nuclear roll-out of large units, on an outdated plan is going to be very costly to the economy.

"The analysis shows that even in a higher-demand (scenario), new capacity in nuclear is only required in 2029 and not in 2023 as per the IRP2010. This means there is more time to make a decision about nuclear and it is by no means a matter of urgency," the report said.

However, in her briefing to Parliament, Ms Magubane said that the nuclear build programme was non-negotiable and that the Cabinet would not re-evaluate it.

She also erroneously stated that the NPC was in favour of nuclear power, while in fact it has questioned this option. The National Development Plan calls for a thorough investigation into the costs, timing and financing of nuclear investments.

Planning commissioner Anton Eberhard said the modelling had been commissioned in order to "catalyse" the debate around South Africa’s electricity future. The NPC recognises the legislative mandate of the Department of Energy to produce electricity plans and saw this new report as an input into future updates of the IRP2010, he said.

The report on the modelling argued that many of the assumptions on which the IRP2010 was based are out of date.

First, it said, growth in energy demand has been much slower than expected due to the slowdown in economic growth as well as rising electricity prices, which have dampened demand and encouraged energy saving. While the IRP2010 recommended an installed capacity of 89GW by 2030, the new power plan suggests 61GW might be sufficient.

Lower growth in demand means that no extra capacity will be needed other than investments already in the pipeline and the need for immediate power to cover shortfalls due to delays in Eskom’s build programme.

The second assumption the report said is out of date is about costs for energy inputs, which have changed significantly since the IRP2010 was finalised. In particular, it said, nuclear costs are a lot higher now — at $7,000/kW — compared to $5,000/kW when the IRP2010 was modelled. New data are also available on renewable energy and gas sources.

The updated assumptions change the recommended energy mix significantly.

They suggest that new capacity between 2025 and 2030 be dominated by gas, with solar, thermal, wind and imported electricity meeting the remaining requirements.

The earliest at which nuclear power might be required is 2029, but the more likely scenario — based on the lower demand growth — would be no new nuclear before 2040.

Even then, other low-emission alternatives to nuclear capacity could be installed at lower cost with shorter lead times.

But in the short term, new generation capacity is urgently required as the delays to Eskom’s new power stations "will almost certainly result in rolling black-outs", the report said.

The department said it would respond to questions but at the time of going to press it had not yet done so.