Nuclear deal – The calm before the storm?

22nd February 2017 By: News24Wire

National Treasury’s 2017 Budget Review and Finance Minister Pravin Gordhan’s speech kept a wide berth from mentioning nuclear energy, following President Jacob Zuma’s cue in his 2017 State of the Nation Address.As anti-nuclear energy protesters chanted "no, no nuclear power" outside Parliament on Wednesday morning, the media searched for clues of the nuclear procurement plan in the offices above, ahead of Gordhan's speech.

No mention was given to nuclear whatsoever in Gordhan’s speech or the Budget Review, bar the usual R20-billion worth of guarantees for the Nuclear Energy Corporation of SA.

Zuma only mentioned nuclear in passing during his address earlier in February. "Renewable energy forms an important part of our energy mix, which also includes electricity generation from gas, nuclear, solar, wind, hydro and coal," was the only time he referred to the term.

During his media briefing on Wednesday, Gordhan said government and State-owned entities needed to work within the tight fiscal framework aim to find higher levels of efficiency and effectiveness with the resources they currently have. "This is a zero sum game," he said.

Referring to this "zero sum game", Fin24 asked the minister how the nuclear procurement programme would be implemented under such a framework.

"Right now, the whole process is in very early stages," he replied. "The fiscus is not required, except for R200-million given in 2016. As progress goes forward, we will let the public know if any fiscus is required."

In 2016, Treasury set aside R200-million to support preparatory work for nuclear procurement. With Eskom taking over the procurement of nuclear in late 2016, there was no mention of nuclear expenditure.

In December 2016, Eskom fired the gun on the 9.6 GW nuclear new build procurement project, when it released the request for information (RFI). By the end of January, the main nuclear reactor vendors - China (SNPTC), France (EDF), Russia (Rosatom) and South Korea (Kepco) – had responded to the first deadline, stating their interest in the RFI. The deadline for their submission is on April 28, 2017.Eskom and its partners at Necsa, Treasury and the Department will use this information to determine the costing of the project, before releasing the request for proposals.

The RFI needs Treasury's sign-off before being released, which Eskom hopes to achieve this year. Therefore, all eyes should be on the mini budget in October 2017, to see how this year’s budget changes.