Energy battle set as nuclear delay on cards - as it happened | Fin24
  • Ferial Haffajee

    Why should SAA employees pay for the sins of Dudu Myeni and Jacob Zuma?

  • The Namibian Link

    Evidence is mounting that VBS Mutual Bank aided another elaborate bank heist.

  • Mobile Merger?

    Telkom has confirmed it is in talks to buy network operator Cell C.


Energy battle set as nuclear delay on cards - as it happened

2016-11-22 09:02

Eskom's Matshela Koko has pleaded with South Africans to take the politics out of nuclear and just consider it on its merit.


Jump to

Last Updated at 04:12
22 Nov 13:11

The Integrated Energy Plan

22 Nov 13:06

Preliminary power demand projections by sector:

22 Nov 12:58

Sapvia: It is important that the energy debate is one based on facts rather than assumptions and we intend to robustly participate in the public participation process.

In the current fiscally constrained environment, we believe that the additional cost of deviation from this ‘least cost scenario’ should be made public to allow policy makers to make informed value-for-money decisions.

Any additional cost to the South African fiscus that will impact on critical social spending programmes should be debated.

We believe that the ‘build constraint’ placed on renewables should be removed in the IRP models and scenarios in order to reflect the real potential that solar technology can play.

22 Nov 12:56

The South African Photovoltaic Industry Association (Sapvia) has welcomed the release of the 2016 update of the long-awaited Integrated Resource Plan (IRP) and urged government to move forward with the renewables implementation.

Sapvia said the updated IRP will give all South Africans the opportunity to interrogate the choices and cost assumptions used by the IRP planners to reach their conclusions regarding technology choices.  

"The allocation of 17 600 MW for Solar PV in the 2016 IRP update is a step in the right direction, but falls short of the immense potential South Africa has to offer in this sector.

"Independent modelling, based on up-to-date figures from South Africa’s REIPPPP bidding rounds confirm that renewables are the best policy choice in order to meet South Africa’s energy needs at the least cost, while still maintaining our carbon obligations.  

"Evidence shows that the least cost path for South Africa to achieve a sustainable, low carbon, high job creating energy mix is one that contains a large renewable energy component, supplemented with gas fire power. This renewables and gas scenario has been repeatedly seen in our BRICS partners and elsewhere globally."

22 Nov 12:49

Koko’s message to South Africans regarding nuclear: "Be dispassionate about it. Take the politics out of it and just consider it on its merit – that’s all that I am asking.

“We (Eskom) are not married to it (nuclear). It must make sense to the country. We must be able to afford it. It must be able to decarbonise the country. It must be able to meet and check all the boxes.”

22 Nov 12:48

Koko: It’s not uncommon for the request for proposals for projects like this to request for the funding proposals from the vendors. You are building an outfit here that is going to last 80 years, that you plan to pay back in 25 years. So you have got fundable options. You also have room for equity from original equipment manufacturers.

Then we are back to the 2008 scenario where you slow it down and you stop. We won’t hesitate to do that because we have done it in the past. We started it and we didn’t like the numbers – they were too expensive and we stopped it.  

22 Nov 12:47

Asked by a journalist if Eskom is going “hell for leather” on nuclear, Koko replied: “Not at all”. He said the plan is 9 600 MW. “But we have always said that we will build in chunks that we can afford”.

22 Nov 12:43

Why Eskom will release request for proposals this year:

Matshela Koko, Eskom’s group executive for generation: It is very important for us to go into the market so that we are able to go back to give cabinet what the best rollout is, including localisation, including the funding options. It’s quite important that we do that, otherwise, we keep guessing.

22 Nov 12:42

The SA Renewable Energy Council has welcomed the IRP update assumptions and base case: "It has been common knowledge that the IRP2010 has been outdated since 2013. The 2013 update report has still not made it into policy and we hope that the 2016 update report will be realised within the timeframes put forward by the department i.e. with promulgation of the updated IRP shortly after March 2017.

The IRP is based on a set of important assumptions which inform model outputs and which in turn determine the country’s electricity investment decision-making to 2030. Two of the most important assumptions from our perspective are: demand and RE costs. The assumptions made on these have a direct bearing on what the model selects for investment.

The IRP2016 update published today clearly takes current data related to these assumptions into account, and in addition, extends the planning horizon to 2050.

We encourage all South Africans interested in South Africa’s development future, to engage with the IRP consultation process and to ensure that the IRP promulgated is reflective of rational planning, particularly as this relates to costs, job creation and economic sustainability."

22 Nov 12:33
Matshela Koko, Eskom’s group executive for generation: The real debate we will have is the one that says: “Do you have a carbon budget or not?” And if the answer is yes, then you will need a reactor operational by 2025. To have a nuclear reactor operating in 2025, you need a 10-year lead time, which will start now. Otherwise you will end up in a situation where you were when we ended up in load shedding.

22 Nov 12:30

Mackay: Low cost electricity is vital to grow industry, create jobs and end unemployment.

Necsa’s comments should be limited to the multi-purpose reactor, for which they are responsible at Pelindaba. Eskom’s view that nuclear should be procured as soon as possible should be taken in light of the public protector's report on state capture and implications on Eskom board. The DOE retains for energy planning within SA. Any attempts by Eskom to usurp that role should be strongly objected.

Today’s IRP and IEP if accepted will provide a legal and statuary framework against which nuclear procurement can be evaluated. Eskom will find it incredibly hard to justify a purchase of 9.6GW of nuclear capacity within 24 months, against an IRP plan which says such procurement should be limited to 1.8GW and should be delivered in 2037.

The IRP should be finalised by mid-2017, according to the DOE. 

22 Nov 12:27

Democratic Alliance MP Gordon Mackay on the IRP:

The minister should be supported for producing an IRP that clearly indicated that nuclear is not a requirement until the mid-2030s.

This stands in sharp contrast to the spin put out by Eskom, which has falsely punted the urgent need for nuclear procurement in the next 24 months.

The department’s assumptions on nuclear are aligned with nuclear experts within SA and clearly indicates that gas should be considered as a cheaper base load priority and supports a more aggressive adoption of renewables.

Of concern in the presentation by the department, was that it did not include the assessment of the impact of the electricity pricing path, because consumers will like to know what they are going to pay for government’s decisions.

22 Nov 12:16
Tshelane: “Necsa has been preparing for the major nuclear build and will continue to do so.  We are making good progress and I am pleased at the way in which our plans and actions have been unfolding.”

22 Nov 12:15
Necsa CEO Phumzile Tshelane: “Nuclear power is so clearly the way to go, that the DOE proposals are surprising to say the least.  I can’t see the logic in their ideas.”

22 Nov 12:14
One of the important factors in expanding the South African nuclear power production capacity is to be able to place power generation in the Eastern Cape, Western Cape and Northern Cape.  Currently, far too much of South Africa’s electricity is produced only in the far north east of the country which is a strategically unwise thing to continue doing.  All South Africa’s coal is situated in the far north east, says Dr Kemm.

22 Nov 12:13
Dr Kemm: “There appear to be some very strange assumptions made by the DOE in this surprising proposal. Quite frankly I cannot take it seriously. I am extremely disappointed that the DOE did not see fit to consult Necsa.”

22 Nov 12:08

Dr Kelvin Kemm, chairperson of government owned Nuclear Energy Corporation (Necsa) says the new proposed energy plan is a complete surprise: “The energy discussion document of the DOE which proposes a major delay in the introduction of nuclear power has come as a complete surprise to Necsa.  At no stage were we consulted by the DOE on this proposal.”

The DOE document relies heavily on gas as a base power source.  Gas is one commodity which South Africa does not have and so vast amounts of gas would have to be imported.  There is also no explanation as to where the giant gas power stations would be built and how gas would be transported to them, Kemm said.

22 Nov 12:03

22 Nov 12:02

More questions from Safcei's Liz McDaid: A whole bunch of energy experts say we don’t need nuclear, but now Eskom is still going ahead with a proposal. In who’s interest in Eskom acting?

The IRP 2013 which was put out for comment, also raised the risk of nuclear energy. Then that disappeared.

Now we have another plan, which is actually more wary of nuclear. So where is this going to go? Will it follow the fate of the 2013 IRP?  

22 Nov 11:56

Liz McDaid: In 2011, they said renewables were too expensive. Now we’ve proved they work, now we are told the Eskom grid infrastructure grid can’t take it. Why in every other country that is doing renewable energy, is this not a constraint?

We see government’s reluctance for more nuclear and a reluctance to invest in renewables. Eskom will issue a request for proposals for a scenario.

Will they bring in more renewables as well? What signal does that send the market?

Mace produced a report – it’s confidential and we call on that to be made public. That report did not include nuclear.

22 Nov 11:53

Safcei spokesperson Liz McDaid responds to new energy plan:

We think it’s a good idea that nuclear has been delayed to 2037 in the base case. There is space to consider the different options to come up with the least cost scenario for South Africa.

The IRP has been predetermined. The energy efficiency assumptions in the base case is base as usual. If you do no energy efficiency and you constrain the amount of renewables, you artificially shift your IRP to bring on more coal and nuclear. You would assume that the base case is the government’s best guess.

Now they are offering everyone an opportunity to comment. If you have a more climate friendly option, you then need to reduce coal and increase nuclear.

If you had to unconstrain renewable energy and increase energy efficiency, then you would find that the climate friendly option would drop coal and nuclear. We have seen Eskom’s reluctance to do renewable energy, now we see the DoE saying the grid can’t take more renewables. This is another excuse.

22 Nov 11:51

“The ratings agencies biggest concern with the nuclear plan would be the cost of it, and the amount of debt that the government has to carry for it,” Christie Viljoen, an economist at KPMG told Bloomberg.

“The ratings agencies view is over three to five years, so this makes a positive change to that outlook."

22 Nov 11:49

Quick summary from Fin24's Liesl Peyper:

Cape Town: South Africa will have nuclear energy at 2037 at the latest, the latest draft Integrated Resource Plan (IRP) shows.

In addition, the Department of Energy will issue a request for proposal for a nuclear build programme before the end of this year.  

A delegation from the Department of Energy, including Energy Minister Tina Joemat-Pettersson, and Eskom’s Matshela Koko, briefed the media on particulars of South Africa’s draft plans for energy and electricity generation that will be released for public comment on Friday 25 November.  

The revised IRP sets out a significantly reduced coal requirement compared to the 2011 IRP.  Coal and nuclear energy, however, will still be the principle source for base load energy.

22 Nov 11:47

Rand stronger on latest SA energy plans and favourable emerging market sentiment. Unit now trading at R14.08/$, that's 1.17% firmer than the previous close.

22 Nov 11:44

22 Nov 11:26

22 Nov 11:21

Matshela Koko, Eskom’s group executive for generation, says Brian Molefe is the best person for the job as Eskom CEO.

Listen to the full interview:

22 Nov 11:17
Koko says nuclear request for proposals will be published in 2016 for 9.6 GW, but that this will be similar to the 2008 request and does not mean it will necessarily proceed. However, he will push for nuclear to start ASAP to get the first nuclear reactor up and running by 2025. This will be part of the public consultation process before the IRP is finalised.

22 Nov 11:08
The briefing has come to an end.

22 Nov 11:03

DoE: Why no gas in base load? We don't see it as base load.

22 Nov 11:02
Tina Joemat-Pettersson: Mace has provided us with very important information and it has been taken into consideration with planning process. The cabinet has agreed that Eskom will be  procurer, owner and operator of nuclear power plants.

22 Nov 11:01
Koko has clarified that the nuclear power plants would be required to start being built in 2027 to meet the first 2037 deadline on the proposed base case scenario. However, another scenario that would see a carbon free energy sector would see nuclear coming online in 2025. This scenario will be debated during the public consultation period.

22 Nov 11:00
A  Mace committee member has challenged Koko about talking about  other scenarios that is not the base case for the IRP. Unconstrained renewables could also then be discussed, in which no nuclear is required.

22 Nov 10:52
Koko: You would need a reactor by at least the end of 2025. We  have to go out an inquire by end of this year. The DoE is policy coordinator. The nuclear is the procurer. It requires us to be ready 10 years before.

22 Nov 10:51

How Reuters reported the IRP news to the world:

South Africa says to boost nuclear, renewable power

South Africa plans significant increases in nuclear, wind and solar power output over the next three decades to meet growing electricity demand, a government document released on Tuesday showed.

South Africa will increase nuclear power output by 1 359 megawatts (MW) by 2037 and 20,385 MW by 2050, the document said. A further 37 400 MW of wind and 17 600 MW of solar power will also be added to the grid, it said.

22 Nov 10:48
DoE: Mace recommendation raised concern of renewable constraints. There is a scenario with no constraints on renewable energy.

22 Nov 10:47
DoE: Approach limited renewables to 1000 MW per year until learning curve was had. Then this amount was increased.

22 Nov 10:46
DoE: Renewable energy approach is sustainable.

22 Nov 10:45
DoE: Constraining renewables - in the previous IRP, the biggest debate of RE was extent to which they were very expensive. Back then, we were faced with scenario as PV and wind were more expensive than what they are today. Through a policy adjustment, through learning rates, we anticipated costs would come down. If it was not for government, there would not have been renewables.

22 Nov 10:44

22 Nov 10:43

22 Nov 10:43
EE Publishers MD Chris Yelland asks minister why she ignored the Ministerial Advisory Council on Energy (MACE)'s base case assumptions, which does not see any renewable energy constraints. This would see a lot less nuclear being planned.

22 Nov 10:42

How Bloomberg reported the IRP news to the global business community:

South Africa Delays Nuclear Plant Plan as Economy Stagnates

South Africa delayed plans to build new nuclear power plants over concern about their cost and the waning demand for additional electricity as economic growth stalls.Under a new timeline, the first nuclear power is expected to come on stream in 2037, with a total 20,385 megawatts of nuclear energy added to the national grid by 2050, according to the “base case” scenario outlined in a presentation on the Department of Energy’s updated Integrated Resources Plan.

The proposal, released in Cape Town on Tuesday, also estimates as additional 37,400 megawatts of power from wind, 17,600 megawatts from solar plants, 35,292 megawatts from gas and 15,000 megawatts from coal by 2050.

The government previously said it wanted to generate 9,600 megawatts of energy from as many as eight reactors that should begin operating from 2023 and be completed by 2029. Price estimates had ranged from $37 billion to $100 billion.

While President Jacob Zuma has championed the nuclear program, the Treasury has cautioned that the country may be unable to afford new reactors at a time when the economy is barely growing and the budget deficit needs to be curbed to fend off a junk credit rating.“Gas and renewables forms the biggest chunk of installed capacity by 2050,” the Department of Energy said in the presentation.

“There is significant reduction in installed capacity from coal.”

The department, which has invited public comment on the proposals, also outlines two alternative scenarios that make different assumptions about costs, carbon emissions and the nation’s ability to generate additional renewable energy.

One envisions 25,821 megawatts of nuclear power added to the grid between 2026 and 2049, while the other sees the production of 5,436 megawatts of new atomic power coming on line starting in 2037.

Power CutsThe energy plan will be refined in March next year and then submitted to the cabinet for final sign-off.

Eskom, the state-owned utility, has said it could use the more than 150 billion rand ($10.5 billion) it will accumulate in reserves within 10 years to build new reactors. The utility operates Africa’s only nuclear power plant - the 1,800-megawatt Koeberg facility near Cape Town, which began operating in 1984.

Rosatom, Areva, EDF, Toshiba’s Westinghouse Electric unit, China Guangdong Nuclear Power Holding and Korea Electric Power previously expressed interest in building new reactors in South Africa.

South Africa experienced power cuts for about 100 days last year, as demand exceeded supply. Energy shortages eased as new generating capacity was bought on line, maintenance backlogs were addressed and a stagnating economy curbed power demand.

22 Nov 10:36
Matshela Koko, Eskom’s group executive for generation: Eskom issued a nuclear query in 2008 which tested the market and we decided not to proceed with it. We will do the same by the end of this year.

22 Nov 10:35
In the IRP proposal, by 2050 there would be 20 385 MW of nuclear, 37 400 MW of wind, 17 600 MW of solar PV, 13 332 MW of open cycle gas turbine, 15 000 MW of Combined Cycle Gas Turbines, 15 000 MW of coal and 2 500 MW of Inga hyrdo.

22 Nov 10:32
Doe: With an aggressive environmental assessment, the model calls for even more nuclear. It completely displaces coal and it also pushes up renewable. You would see 100GW of renewables.

22 Nov 10:30
DoE: Regarding nuclear, this (2037 to 2050) is when it must be in the system. You are better advised to start early. What we are saying is that this is based on a particular scenario. If that set of assumptions doesn't hold, then the date changes.

22 Nov 10:23

Matshela Koko, Eskom’s group executive for generation, responds to IRP:

22 Nov 10:22

See the presentation on the new IRP proposal:

22 Nov 10:18
Here is the official DoE presentation.

Jump to


Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

What do you think about private healthcare in SA?

Previous results · Suggest a vote