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SA 'needs nuclear'

Cape Town - The SA government is investigating various financing models for the nuclear deal Energy Minister Tina Joemat-Pettersson has concluded with Russian state nuclear firm Rosatom, Xolisa Mabhongo, ‎group executive corporate services at the South African Nuclear Energy Corporation (Necsa), told Fin24 on Tuesday.

These financing options will be considered when a final decision has to be made, according to Mabhongo.    

Joemat-Pettersson said on Monday she regard nuclear as a key driver for economic growth and has signed a deal for SA to get up to eight nuclear reactors from Rosatom.

Mabhongo explained that the SA government has announced that the country will have an energy mix made up of different sources. These include nuclear, coal, solar and wind.

SA currently has one nuclear power station that provides around 5% of the country's 42 000 MW of installed generating capacity. Nearly all the rest comes from coal.

Eskom is scrambling to finish new power plants, including Medupi and Kusile that are far from complete.

"At the moment we rely largely on coal. Nuclear energy makes up about 5% of SA's current energy mix. We operate the Koeberg Nuclear Power Plant near Cape Town. This is where we derive the 5% of nuclear," said Mabhongo.

"We need nuclear to reduce our carbon footprint, because it is a clean source of energy that does not emit gases harmful to the environment. We also need it for energy security, because we currently have energy constraints which are not good for economic growth."

READ: Watch evening power usage, urges Eskom

In the long run SA will reduce its dependence on coal, he said and besides coal, nuclear is the only other source of baseload electricity that SA has.

"This means it is the only source of large scale continuous energy. Renewables such as solar and wind are good, but they are still intermittent because of their reliance on the weather," said Mabhongo.

Reliable energy needed for investment, jobs

"Therefore, nuclear will power our economy and support industrialisation and manufacturing. If we do not have reliable electricity supply it will be difficult to attract investors and we will not have jobs."

In terms of the SA/Rosatom deal the delivery of the reactors will enable the start of the first nuclear plant based on Russian technology on the African continent.

Rosatom director general Sergey Kirienko said in a statement on Monday South Africa will get all the necessary competencies for the implementation.

He said the deal will create thousands of jobs and the placing of a significant order to local players worth at least $10bn.

"As outlined in this year’s State of the Nation address and mentioned in the budget speech, South Africa’s biggest single renewable energy project goal is the development of new nuclear power plants, of which the government is targeting an additional 9 600MW of nuclear energy capacity," according to Claude Baissac, CEO Eunomix.

Baissac said the biggest constraints to growing SA’s energy production capacity, including increasing the percentage of renewable energy, are the inefficiencies of Eskom, government interference, and the huge financial resources needed to fund its current and future energy projects.

Updated in November 2013, SA's ambitious Integrated Resources Plan for 2010-2030, states its main aim is to reduce the country’s reliance on coal in electricity generation to below 50% by 2030.

In procuring renewable energy the Renewable Energy Independent Power Producer Procurement Programme (REIPPP) has been quite successful as a programme, according to Baissac.

However, its procurement target of 3.625MW, over an initial five tender rounds, is set at less than 10% of SA’s total power capacity of 43 000MW.

"There is also concern that it will take a few years to construct and add this base requirement to the national grid," said Baissac.
 
"Although limited, South Africa currently has other renewable energy power generation capacity, stemming from hydro-power, pumped storage and nuclear."

Hydropower capacity

Hydropower capacity is being sourced from the Ingula Pumped storage scheme, providing some 1 300MW in the first of four units, set to come online by mid-2015.
 
Regional power schemes, from renewable energy sources are also being pursued, with the Democratic Republic of Congo’s Inga project being the most prominent.

Inga has the potential to generate 40 000MW of power, unfortunately the timeframe on this being fully operational is highly uncertain.

Inga is proposed to be rolled out in six phases, the first of which is set to generate only 4 300MW, of which South Africa will procure 2 500MW.

Construction on phase one is only likely to begin in 2016/17, meaning it could be some time before South Africa benefits from this capacity source.

In 2013, just over 94% of South Africa’s electricity generation mix came from coal-fired power stations. The remainder came from gas power plants, the diesel-fired open-cycle gas turbines, which are very expensive to run and have been used extensively during power shortages, and from renewable sources, being mainly Koeberg.

Greenhouse emission
 
"Coupled with SA’s agreement on global Greenhouse Emission Policies, which knock our overextended and major supplier of energy, coal, what options does this country have?" asked Baissac.
 
"South Africa’s energy crisis has been caused by poor planning and the inefficiency of the government and its state owned enterprise, Eskom."

One of the major current issues Baissac pointed out is that South Africa commissioned two huge new coal-fired power plants, namely Medupi and Kusile, with a third in the offing, ‘Coal 3’.

READ: Eskom: We made mistakes at Medupi and Kusile

"South Africa has many options for reducing the reliance on coal.

"Potentially the greatest source of future energy supply could come in the form of additional renewable energy sourced locally and from the near region, off-shore gas deposits coming from gas imports from Namibia and from Mozambique, which holds the world’s fourth largest gas reserves and coal-bed methane," said Baissac.
 
Lastly the shale gas option is yet to be finalised.

Partial privatisation

"In terms of solving Eskom’s efficiency problems, one option for South Africa is to partly privatise Eskom, already suggested by some parts of South Africa’s cabinet," said Baissac.
 
“There needs to be a concerted effort from the South African government to ensure Eskom acts as an efficient company, perhaps more restructuring."

Lastly, he said Eskom could allow more independent power producers to increase their role in supplying power to areas that are experiencing particular shortages or are energy-intensive users.

- Fin24

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