DMRE moves to appoint service provider to design nuclear procurement framework

9th February 2022 By: Terence Creamer - Creamer Media Editor

DMRE moves to appoint service provider to design nuclear procurement framework

Minister Gwede Mantashe argues there is scope to update the IRP to accelerate nuclear
Photo by: Creamer Media's Donna Slater

South Africa’s Department of Mineral Resources and Energy (DMRE) is seeking to appoint a service provider to develop a framework for the procurement of 2 500 MW of new nuclear capacity.

The department has published a terms of reference document for such a service provider and a compulsory briefing session will be held virtually on February 16 for potential bidders. The actual tender will close on February 25.

The successful bidder will have 12 weeks to develop a framework that is in line with national legislative prescripts and international best practice.

It should also take account of Eskom’s unbundling process and address the suspensive conditions set out by the National Energy Regulator of South Africa’s (Nersa’s) concurrence for the procurement of 2 500 MW of new nuclear generating capacity.

Nersa’s concurrence, provided in August, has been questioned, owing to the fact that no new nuclear is provided for in the Integrated Resource Plan of 2019 (IRP 2019), which covers the period to 2030.

The document does, however, include an allocation to extend the operating life of Koeberg in the Western Cape, beyond its current licence term of July 21, 2024. Eskom is seeking a licence for the extension from the National Nuclear Regulator and has already initiated works to replace the steam generators at both Koeberg units, which will result in the power station operating at half its capacity for most of 2022.

The Nersa concurrence for the procurement of new nuclear capacity is subject to several suspensive conditions, including establishing, through a demand and generation profile analysis, the rationality of adding 2 500 MW of nuclear post-2030.

In addition, the regulator wants Decision 8 of the IRP 2019, which requires that any nuclear build programme be implemented at a pace and scale that the country can afford, to be satisfied, and for technological developments in the nuclear space to be considered.

Nersa also stipulates that the new nuclear power should be procured based on the engineering, procurement and construction contract principles, rather than through fragmented contracts and that the generator of the electricity be Eskom Holdings, or any other organ of State, or in partnership with any other juristic person.

The service provider would be expected to produce a “coherent
report” that includes an analysis of a recent request for information process that tested the market for conventional nuclear plants and small modular reactors.

Besides making recommendations on a procurement approach, it should also include recommendations on how localisation and industrialisation could be maximised.

The tender release follows a recent Fin24 report in which Minerals Resources and Energy Minister Gwede Mantashe is quoted as saying that there were compelling reasons to update the IRP to include more gas and accelerate the nuclear build programme.

Several technoeconomic studies have indicated that a least-cost IRP for South Africa would not include any new nuclear capacity.