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Nuclear won’t cost R1trn, but can SA even afford R250bn?

Cape Town – South Africa’s nuclear procurement programme should cost between R250bn and R500bn, energy analyst Ted Blom told City Press on Sunday.

Anything more than that should raise concerns for taxpayers, said Blom.

After doing a comparison with France’s recent nuclear programme, Blom said even if we were to procure the ability to produce 9 600 MW of power, it would not cost close to R1trn.

However, he said even R250bn will be unaffordable for the fiscus. “We will have to borrow that money, but our economy is simply not growing fast enough to pay for it,” he told City Press.

The Department of Energy (DoE) officially announced on Saturday a Cabinet decision that authorised the department to issue a request for proposal (RFP) for the nuclear new build programme of 9 600 MW of nuclear power.

A government Gazette approving this process was issued on December 21.

READ: Energy Department confirms next steps for nuclear energy

Eskom told Fin24 this week that its environmental impact assessment (EIA) for the proposed construction of a nuclear power station would be handed over to the national Department of Environmental Affairs in February 2016.

The report recommends the power station be built in Thuyspunt in the Eastern Cape, but sources say there is a strong chance it could be built near the existing Koeberg nuclear power plant in Cape Town.

“The EIA process for the nuclear 1 project is almost at the end,” Deidre Herbst, Eskom’s environmental manager, told Fin24.

READ: Nuclear site process not being fast-tracked at Thuyspunt - Eskom

However, this step is far from a done deal and the overall process could collapse at any point, according to energy expert Chris Yelland.

“The nuclear new build is far from a done deal, either with the Russians or any other vendor country, especially with Finance Minister Pravin Gordhan now taking a firm grip on the till, with the question of affordability high on his mind,” he told Fin24.

He listed several steps before any deal could be signed, but warned that it could all fall flat.

“In a previous nuclear new build procurement process about five years ago, US firm Westinghouse and French company Areva were shortlisted,” he said.

“When their final bids were received, the procurement was cancelled on the grounds of unaffordability.”

READ: Nuclear energy plan can fail at any point - Chris Yelland

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