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THE SOUTH African government announced a nuclear energy procurement process that will be over in early 2016.
While nuclear agreements with other countries includes no details, the one South Africa has signed with Russia includes the type of reactor technology to be used, locations of future’ nuclear plants, liability in case of a nuclear accident, which will be South African.
This agreement also reserves the right for Russia to veto nuclear cooperation with other countries. Sounds very much like binding, even if some officials say otherwise.
WATCH: SA is not at the back of a queue, says Rosatom
Thyspunt, Bantamsklip and Koeberg are fixed in Russian agreement as nuclear sites along with others unidentified yet. The Department of Energy announced one more site in KwaZulu-Natal several weeks ago.
The total capacity of nuclear plants will be 9.6 GW, according to the agreement.
That equals to eight new Russian reactors of VVER-1200 type. None of those reactors are in operation in Russia or any other country. No verified safety record exists for it. Older designs of such reactors - VVER-1000 – are known for serious accidents, including hydrogen explosion at Russian Kalinin nuclear plant in late 2011.
Another issue associated with it is the constant leakages of radioactive tritium that comes out of the reactor during routine operation, along with cooling water discharged to the environment. Tritium may cause a genetic disorder if it gets into the human body.
How will SA pay R1.37trn for nuclear?
The cost of the new nuclear build programme in South Africa is estimated to be close to R1.37trn, while it is not clear where money would come from. Russia is experiencing one of the biggest economic troubles in history and cutting down nuclear and other development programmes at home.
Even at better times, Russia never funded foreign reactor construction with anything close to this amount. Five years ago, it promised to build a $20bn nuclear plant in Turkey, but active construction of reactors didn’t start until today and what was delivered did not exceed $1bn.
According to media reports in Russia, state nuclear corporation Rosatom is not only viewing South Africa as the next place to export its reactors, but also wants to build other parts of so-called nuclear fuel cycle, including uranium production. There are small reserves of uranium in Russia and Rosatom is keen to get access to deposits around the world. Threats that are associated with industrial scale mining require no explanation in Johannesburg, which is surrounded by old mines continuously poisoning drinking water and damaging public health in townships.
READ: Rosatom speaks out on nuclear in SA
New Russian reactor costs about $5-6bn, according to Rosatom. However, two known independent economic assessments conducted in this field were concluding with much higher numbers. In Bulgaria, where government hired HSBC bank to do an assessment, experts came up with the estimate of €10bn per reactor, compared to an earlier promise by Rosatom to build it for €4bn.
Soon after Fukushima, the Bulgarian government cancelled the contract, saying it can not afford Russian reactors. In Finland, where an agreement was signed several years ago, but nothing is under construction yet, independent experts estimated the cost of a new Russian reactor at €7.7bn. (Euro = $1.128 as of August 28, Bloomberg spot exchange rate).
This is not only the case with Russia.
Delays in nuclear construction
French Areva promised the Finnish government that it will build a new reactor for €3bn almost one decade ago. Today the cost of construction is estimated at around €8bn and almost decade behind the schedule.
Delays are another issue, which may add to the cost of construction significantly. On average, it takes about decade to build a reactor, but some of it has been under construction for over 30 years. This technology will obviously not help to solve the load shedding in the visible future. If going ahead with nuclear, South Africa would start to pay soon, while energy will come much later if it will come at all.
But would nuclear deliver cheap electricity? Current studies done in South Africa suggest it will not. The Council for Scientific and Industrial Research (CSIR) projects the levelised cost of electricity from nuclear power to be R1/kWh, from new coal R0.80/ kWh, solar photovoltaic R0.80/ kWh, and wind R0.60/kWh in today’s prices. The analysis done by the Energy Research Centre at the University of Cape Town also projects a high risk that the levelised cost of nuclear energy will come out higher than most other technologies.
Add here problems South Africa will experience later with large amounts of nuclear waste and reactor decommissioning that may become as expensive as construction itself. None of the other energy technologies leave waste that will be dangerous for thousands of years with the necessity of very expensive treatment.
Nuclear energy on the decline
It is no surprise that this problematic technology has been on the decline around the world. Contribution of nuclear to the world’s primary energy production dropped from 8% in 2000 to just about 4.4% in 2014. It will continue declining as hundreds of reactors are coming to the end of its designed operation lifetime in the next two decades.
When one source of energy is shrinking, there must be something else to replace it. In most of the countries it is renewable energy. There are technologies that can provide baseload power, for example concentrated solar thermal energy, geothermal and others. But what about the expensiveness of renewables?
Next year, Kenya is expected to add 1.4 GW in renewable capacity. Solar power plants at nine sites that could provide more than half the country’s electricity by 2016 and electricity costs could go down by as much as 80%. On August 24, according to Bloomberg, German wholesale electricity prices tumbled to a 12-year low. No surprise that renewable energy has been the investment champion around the world for long time.
It is clear that any decision to develop nuclear today would be uneconomic. But nuclear power has always been a political issue. For developing countries, a matter of being seen as more developed and respected. For developed countries, one of most effective instruments to create more dependence around the world on their technology, services and fuel. Nuclear would be dead long ago if treated solely as business. For one simple reason, you can take your billions and invest in many other places getting it back with benefit much faster than in 20 years.
It is crystal clear that South Africa is at the crossroad. Going ahead with nuclear will take all available resources and put the country into giant debt. Fortunately, there are healthier alternatives that will benefit stability and economic growth.
* Vladimir Slivyak is famous in South Africa for leaking the secret Intergovernmental Framework Agreement between Russia and South Africa for the procurement of 9600 MW of nuclear power. Slivyak is a senior lecturer in environmental policy at the Higher School of Economics in Moscow.
