A decision expected later this year on a tender for the provision of a series of nuclear power stations in South Africa could provide a long-term solution to the country’s power shortfall, but will come at a cost, with estimates putting the price tag for the project at up to R1.2-trillion, business intelligence report publisher Oxford Business Group (OBG) has said.
Noting that government had, to date, carried out vendor “parade” workshops in which five countries – the US, South Korea, Russia, France and China – had presented their nuclear proposals, the company affirmed the country’s nuclear strategy, noting that renewable and coal-fired energy sources alone would be insufficient to cover baseload demand.
“While there has been increased interest in developing alternative energy production capacity, with both solar and wind power options in South Africa, proponents of nuclear energy contend renewables will not be able to meet the rising demands for electricity in the decades to come,” said the group.
It added that the need for the ambitious proposal “was clear”, as ageing infrastructure and the slow roll-out of new generation capacity continued to place increasing strain on the South African economy, disrupting service provision and reducing industrial output.
“[While] new capacity from [energy utility] Eskom is scheduled to come online in the form of two coal-fired power plants, Medupi and Kusile, which will produce 4 800 MW each, these are [only] expected to be completed by 2021,” it noted.
The lack of adequate electricity had, meanwhile, “clearly” taken its toll on the South African economy, with OBG citing a report tabled in Parliament by the Department of Public Enterprises in March in which Eskom’s load-shedding programme was revealed to be costing between R20-billion and R80-billion a month.
Analysts estimated that shortfalls in power supplies had cost R300-billion, while Efficient Group chief economist Dawie Roodt asserted that power shortages had wiped 10% off the potential growth of the economy between 2007 and 2014.
While South Africa had other options to expand its baseload capacity, growing concerns over carbon emissions militated against increased use of coal.
“Imports of gas or using diesel are also costly, while imports of hydroelectricity from elsewhere in Africa such as Mozambique have proved unreliable,” said the group.
Another factor driving the push for nuclear energy, it argued, was the fact that many of South Africa’s coal-fired stations were nearing the end of their operational lifespan.
With much of its ageing network of fossil fuel power stations set to close before 2035, South Africa would need a “massive” expansion of baseload generation capacity to offset plants going offline, let alone meet rising demand and sustain growth.