The success of all the countries that have undertaken large nuclear programmes shows that nuclear energy is a credible solution to State-owned power utility Eskom’s power challenges, says retired Eskom chief nuclear officer David Nicholls.
“The tariffs in pro-nuclear countries, such as France, show that it is a cost-effective option. However, nuclear energy does not lend itself to non-State investment, owing to the large capital cost involved for the large unit sizes – about 1 000 MW.” Financing “The financing is done at State level; therefore, it keeps the middlemen out,” he underscores.
Nuclear energy is vendor-financed at electronic commerce association rates and is, therefore, the only solution that South Africa can really consider, he adds.
Nicholls further mentions that Egypt, for example, has received a $25-billion loan facility at a 3% interest rate for its 4 800 MW nuclear power plant. This includes a major desalination facility.
While the economics of current generation nuclear power plants is competitive, there is the prospect of a new generation of small modular reactors (SMRs). These SMRs range in size from 50 MW to 300 MW, compared with over 1 000 MW of current designs. These SMRs promise to revolutionise the electricity industry and probably the most promising one under construction today is the HTR-PM in China.
“This is based upon similar technology to Eskom’s previous Pebble Bed Modular Reactor design. The Chinese believe that the HTR-PM, when deployed on a commercial scale, would cost less than $3 000/kW. “At this price, it would be very competitive and could lead to the return of the town power stations,” he explains.
Meanwhile, Nicholls predicts that, in the medium term, the risk of load-shedding will remain unless the industrial economy contracts further, which will be likely from the late 2020s due to Eskom’s older coal stations being decommissioned with no effective replacement.
As such, the price will have to rise to meet the actual costs. Currently, government pays R23-billion a year to subsidise price increases, similar to what the independent power producers are currently costing Eskom. Nicholls says subsidising price increases is “a very bad practice” because it distorts the real economics and constrains government spending in other areas.