Nuclear Industry Association of South Africa president Rob Adam remains convinced that the energy policy tide in South Africa is running in favour of nuclear power and that the country will, in due course, construct new nuclear power plants (NPPs), despite the fact that another year has gone by without any acquisition programme being launched.
“I’m optimistic for the medium term,” he affirms. “Two things have changed over the past two years. One is that the advent of a range of new vendors, outside of Westinghouse and Areva, has made for a whole lot of activity and proposals. It’s freshened everything up and introduced new dynamics for partnerships. Second, a new Energy Minister was appointed, who is very focused on the nuclear issue.”
Another factor highlighted by Adam is South Africa’s membership of the loose political alignment known as Brics (for Brazil, Russia, India, China and South Africa, which joined the group in 2011). Brazil, Russia, India and China all have active nuclear energy programmes and all are increasing their NPP numbers (although at varying rates). This provides an example and a stimulant for South Africa. “Brics is important,” he argues.
The last time South Africa was considering ordering a new NPP, in 2008, there were only two serious bidders: the US-based Westinghouse Electric (part of Japan’s Toshiba group) and France’s Areva. Now, in addition, there are Rosatom, of Russia, the Korea Electric Power Corporation (Kepco), of South Korea, and at least three companies from China – the China National Nuclear Corporation, the State Nuclear Power Technology Corporation and the China General Nuclear Power Holding Corporation. All seven of these groups have shown serious interest in South Africa’s new NPP programme. Areva, Kepco, Rosatom and Westinghouse have all built, or are currently building, NPPs outside their home countries.
In his 2014 State of the Nation address, delivered on February 13, President Jacob Zuma stated: “We expect to conclude the procurement of 9 600 MW of nuclear energy”. In his keynote address to the Nuclear Africa 2014 conference on March 18, Energy Minister Dikobe Ben Martins recalled this statement, saying: “President Zuma announced that government will include the procurement of 9 600 MW of nuclear energy as part of the energy mix.” Zuma’s and Martins’ statements were in line with the Integrated Resources Plan (IRP) 2010, adopted by the Cabinet in 2011.
Martins also outlined an ambitious objective for the country. “Our long-term vision is to be self-sufficient in all aspects of the nuclear value chain,” he said. The entire nuclear value chain includes uranium mining, enrichment, nuclear fuel manufacture as well as the design, construction, operation and decommissioning of nuclear power plants.
Significant progress, he affirmed, has been made in implementing the IRP 2010, which also covers coal, renewable (solar and wind) energy and hydroelectricity. Martins particularly cited the success of the Renewable Independent Power Producers Procurement Programme. This showed that “South Africa has the necessary capacity to undertake megaprojects”. “[The renewables programme had] contributed directly to foreign direct investment in the South African economy. We expect this to continue.”
The Minister and representatives of the Department of Energy, the Department of Trade and Industry, the Department of Public Enterprises, the National Treasury, the National Nuclear Regulator (NNR), Eskom and the South African Nuclear Energy Corporation (better known as Necsa) have undertaken visits to China, Japan, (South) Korea, Russia and the US to study their civil nuclear energy programmes. “Some of these countries have proposals for partnerships in developing nuclear energy skills,” reported Martins. These partnerships would particularly focus on South African undergraduates and graduates. “There is also a willingness to provide on-the-job training for highly skilled professionals in the nuclear sector.
“The Department of Energy and other sister departments and stakeholders are working in order to finalise the procurement framework of our nuclear programme,” he assured. “As soon as that is done, we will expect industry to take advantage of the opportunities throughout the value chain of the nuclear energy programme. This will be another opportunity for all our people with [the] requisite skills to enter the nuclear sector.”
Martins urged industry to develop local nuclear skills and research and development. “Government’s commitment to localisation will result in opportunities for local industry in the manufacturing of various components that are used in the nuclear energy sector.”
He called on international companies to develop connections with their local counterparts. This would ensure “that, when the [nuclear] roll-out is announced and commences, there will be vibrant partnerships between South Africans and international role-players”. Government believed that the future nuclear programme would “significantly contribute” to the country’s economic development, including jobs creation, skills development and industrialisation.
“The government in due course will announce specific details of the nuclear build programme as soon as all our consultations and preparations are finalised,” stated Martins.
UNCERTAINTY AND INDECISION
Despite Zuma and Martins publicly adhering to the nuclear provisions of the IRP 2010, uncertainty has been created by the draft IRP 2013 update, which recommends that South Africa delay the introduction of new nuclear energy capacity (to after 2025 instead of by 2023) and, more seriously, cut the capacity ordered to 6 660 MW – 2 940 MW less than under IRP 2010. Moreover, the President’s use of the word “expect” in his State of the Nation address comment on nuclear energy leaves the door open for a change in the capacity to be acquired, or for a delay in the concluding of the procurement, or both.
On the other hand, the draft IRP 2013 update is open for comment, including from the nuclear industry. “We have to put in comments,” says Adam. “Hopefully, these comments will be heeded.”
Confronted by the slow progress in nuclear decision-making in the country, Necsa CEO Phumzile Tshelane urged the local nuclear sector to adopt a different approach in promoting the expansion of nuclear energy in South Africa. “We have to talk about nuclear today,” he affirmed in his address to the Nuclear Africa 2014. “Let’s talk about it differently – with action plans in mind.” These action plans would not be detailed yet, but “[w]e must convince our [political] masters that we can do it”.
“We need nuclear. It’s the only other baseload electricity solution we can apply. The other is coal,” he asserted. “We need to have our own reliable source of power. We need to mitigate climate change.”
Yet the country has been talking about building new nuclear power plants since the early 2000s. “We went through a procurement process back in 2008 and we were going to announce the bidders before the end of that year,” he noted. “That didn’t happen . . . What is it that drives South Africans not to make these decisions, or to be slow to make these decisions?” he queried, pointing out that, time and again, projects are announced but nothing happens. Meanwhile, other countries are emerging and overtaking South Africa.
“I think it is everything to do with [the South African nuclear sector],” he argued. “We haven’t been effective in meeting our [country’s] leaders.” He pondered whether or not the local nuclear sector had any plans to convince government that it could execute the proposed new nuclear build programme.
All new energy megaprojects in South Africa will be haunted by the serious technical problems and delays at the Medupi coal-fired power station, now under construction, Tshelane warned. If the lessons of Medupi were not learnt, “no one” would believe that a nuclear reactor could be built in South Africa, “not even a research rector”. (Research reactors are much smaller and simpler than power reactors.)
The draft IRP 2013 update also argues for a capital cost of below $6 500/kW (in 2012 dollars) for nuclear energy. This, however, has been publicly welcomed by Areva. The French group also welcomed the “realistic projections” regarding the quantity of capacity to be built by 2035. (See https://www.engineeringnews.co.za/article/areva-welcomes-irp-updates-nuclear-cost-ceiling-proposal-2013-12-11/searchString:Areva.)
However, a cut in the nuclear baseload capa- city to be built would have a real effect on the localisation programme. An NPP is divided into three main elements: a nuclear island (containing the reactors), a turbine island (where the electricity is generated) and the balance- of-plant. In the nuclear island, every component, no matter how apparently insignificant, must be made to nuclear (that is, the very highest) standards. At the other extreme, nothing in the balance-of-plant needs to be of nuclear standard. However, merely average quality is not acceptable anywhere in an NPP.
Localisation can be grouped into two main categories: construction and manufacturing. Manufacturing can, in turn, be subdivided into the making of nuclear island components and parts, non-nuclear island components and parts, and nuclear fuel production.
“If we only commit to a smaller – 660 MW – programme, the local production of nuclear fuel will not be an option,” cautions Adam. “About 10 000 MW is the minimum to make the establishment of a local nuclear fuel production cycle economically viable. This would be achieved with 9 600 MW new capacity plus Koeberg’s existing 1 800 MW capacity. If the revised IRP figure is adopted, a local fuel cycle is unlikely to be economically viable.”
Another factor that would affect localisation is whether South Africa orders a fleet of NPPs or orders each NPP separately, one after the other. “Local construction would not really be affected if there is no fleet order,” he cites. “But manufacturing would be affected. If a fleet isn’t announced, local manufacturing companies won’t make the heavy investments needed to make nuclear island components. Frankly, if there’s no fleet, there’s no value chain. Or you focus on making things that are not exclusively nuclear. Ordering the new NPPs one at a time will hit local manufacturing, but not local construction.”
There is, however, another factor that affects the local construction sector – the issue of the provision of bonds and guarantees by building companies seeking to participate in the new NPP programme. As Adam pointed out in his address to Nuclear Africa 2014, assuming a R150-billion project, with 40% localisation, such bonds and guarantees would come to R24-billion. But the total market capitalisation of the South African construction industry is only R50-billion. There is no way shareholders will allow their companies to take on such hugely onerous obligations, for any single project. “We need to think out of the box about how to cover that,” he told the delegates. “It will be a significant constraint on localisation. As far as I know, no one has consulted industry about this.”
One key area in which everything is ready, or almost ready, for the new NPP programme is independent oversight – a role vested in the NNR. Established by law in 1999, it has, in recent years, undertaken its own assessments of South Africa’s nuclear legislation and regula- tions and is developing guidance documents as well as having issued numerous position papers, especially with regard to the new build programme.
The NNR has also invited the International Atomic Energy Agency (IAEA) to send missions to examine South Africa’s readiness to execute the new NPP programme and to make recommendations. Thus, from January 30 to February 8, 2013, the IAEA carried out an Integrated Nuclear Infrastructure Review in South Africa, which looked at 19 relevant issues and made specific recommendations and suggestions. “We will roll out an action plan to implement these recommendations,” NNR CEO Dr Bismark Tyobeka told Nuclear Africa 2014.
In February this year, the IAEA returned to South Africa to undertake an Emergency Preparedness Review. “It was a full scope review,” he reported. “It envisaged a harmonised regulatory framework and regulatory infrastructure for the country.” It is hoped that the full IAEA report will be released by the middle of this year. An IAEA Integrated Regulatory Review Service mission to South Africa is planned. This type of mission is intended to strengthen the effectiveness of the national regulatory infrastructures of member States, especially with regard to nuclear radiation, radioactive waste and transport safety. Many IAEA members have already made use of this service, including China, France, Germany, Russia, the UK (twice) and the US.
“We believe that localisation is a non-negotiable, but, equally, we will be very unyielding on our mandate to ensure that the local industry and suppliers comply with our requirements,” he stressed. He noted that nuclear certification was not yet widespread in South African industry and that local companies will have to work hard to acquire this status.
Although the accident at the Fukushima Dai-ichi nuclear power plant, in Japan, following the devastating earthquake and tsunami in March 2011, set the global nuclear energy sector back, this has since been overcome. So affirmed US Deputy Secretary of Energy Daniel Poneman at Nuclear Africa 2014. “We had a setback after Fukushima. The whole world took a step back. Since that time, there has been a renewed commitment by most countries that nuclear has a critical role.
“I think the votes are in [regarding] what the role of nuclear energy will be,” he added. “We now have in the order of 70 nuclear plants being built around the world. The needs are tremendous, the opportunities are even greater.” Poneman highlighted that President Barack Obama had reaffirmed the importance of nuclear power in the US energy system. The President regarded it as an important factor in fulfilling his climate change and energy transformation agenda.
An important part of Obama’s climate change policy was international cooperation. “It’s going to be critical that we work together,” noted the Deputy Secretary. With South Africa, this cooperation could include the nuclear sector. The US, pointed out Poneman, has “a burgeoning relationship with South Africa”.
“We certainly understand the approach [to nuclear energy the South African government] is taking,” he stated. “We have excellent [nuclear] training programmes – we have tremendous programmes. And we’d be happy to send students here, as well.”
Poneman recalled South Africa’s abandoned Pebble Bed Modular Reactor project, which had involved US nuclear company Westinghouse. He suggested that some in the industry were still inspired by the idea of small modular nuclear reactors.
“Countries representing over 50% of the world’s population are still committed to building new nuclear power plants,” highlighted Adam in his address. One of the drivers for this is climate change. Another is energy security, especially for the rapidly emerging mega- cities. New NPPs are being built, or planned, in Africa, the Americas (including Brazil and the US), Asia and even Europe (including Finland and the UK), although the “real activity is taking place in Asia”. China is currently building 28 nuclear power reactors, with more planned. India is currently building six reactors.