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Nuclear energy needs may be adjusted downwards - Mahlobo

Cape Town – Energy Minister David Mahlobo could not say at what scale South Africa would procure a nuclear build programme as part of its energy mix. This was because the Integrated Resource Plan (IRP) – the blueprint for South Africa’s energy needs – first needs to be approved by Cabinet.

Mahlobo briefed Parliament’s portfolio committee on energy on Tuesday about issues in his department, ranging from energy generation and the status of an investigation into the sale of South Africa’s strategic fuel stocks.

MPs, who expected a presentation on an updated IRP, were disappointed as Mahlobo could not give any indication of the details of energy mix allocation. 

The energy minister suggested that the acquisition of nuclear energy could be lower than the 9.6GW initially mooted in the IRP adopted in 2011, which was supposed to stipulate the energy needs for 2010 to 2030.

“The IRP is a living plan,” Mahlobo said, “and we are reviewing it because there’s a lower demand of energy because of the economic downturn. You can’t say you need 9.6GW of nuclear when the economy is down,” he said.

Mahlobo emphasised that he is not in favour of one form of energy generation at the expense of another. “I’m a minister of mixed energy solutions. I’m not a minister of isotopes. I’m a minister of energy.”

He added that South Africa has rich uranium endowments, which support the development of nuclear plants.

He reiterated that the current bid windows for the independent power producers (IPPs) will be honoured. “The IPPs are not up for negotiation. It’s a policy of government and it can’t change. The only thing that will change is the pace, scale and affordability (of procurement).”

Democratic Alliance energy spokesperson Gordon Mackay said during question time that Parliament is none the wiser on South Africa's energy needs, as Mahlobo did not divulge any numbers. 

Strategic fuel stocks

The investigation into the sale of South Africa’s strategic fuel stocks is still ongoing, Mahlobo said.

It was supposed to have been concluded in December, but he indicated that the report, which was produced by KPMG, needs to be subjected to a “reliance audit” which will be conducted by PricewaterhouseCoopers.

Mahlobo’s predecessor Mmamoloko Kubayi said in October that the probe into the sale of 10 million barrels of crude oil reserves may be delayed on the back of concerns about the credibility of KPMG.

“We said the investigation would be concluded by December, but now it’s nearly December,” Mahlobo said. He gave the assurance that the transgressors who were instrumental in the illegal sale of the country’s strategic fuel reserves in December 2015 and 2016 would be brought to book, but pointed out that they also have the right to state their case.

Fin24 earlier reported that South Africa could lose about R3.3bn due to the illegal sale, and the country may have to pay almost R6.5bn to replace the 10 million barrels that were sold.

Mahlobo said government finds itself in a “damned if you do, damned if you don’t” situation.

“The security of availability can’t be guaranteed. And the price of crude oil is going up all the time. To bring back the stock means we’ll lose money. Can we manage the elasticity of losing that money? We hope to have a conclusion by December. We took  (a) long (time), but it was necessary,” he said. 

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