Knox Msebenzi is the Managing Director of the Nuclear Industry Association of South Africa (NIASA). In August 2018 the South African government published draft Integrated Resource Plan (IRP) 2018, the roadmap for the country’s electricity planning until 2030. The draft IRP didn’t include nuclear in the mix. We caught up with Knox to find out more about the current status of the South African nuclear industry and his hopes for its future.
Question: Can you please provide an overview of the current nuclear industry in South Africa?
South Africa is the only African country with an operating nuclear power plant, which has been producing power since 1984. The Koeberg Power Station about 30km northwest of Cape Town has two units of 900MW capacity PWR reactors each. Owned by Eskom, the power station generates 5% percent of the country’s electricity. Vaalputs, which is about 500 km North of Cape Town, is the country’s low and intermediate waste disposal site, while high level waste is stored on site. (CGD).
Circa 2018, nuclear in South Africa is facing an existential crisis. Despite its ability to produce carbon-free electricity from plants that operate at over 90 % capacity, nuclear is struggling to get a seat at the table or credit. At the heart of its woes these days is not long-standing discomfort about safety or nuclear-waste but rather perceptions of corruption and lack of transparency in the eyes of the South African public. Despite well-meaning efforts from the industry, the notoriety stuck. .
Question: The South African nuclear industry recently held a workshop to formulate its response to the draft IRP. Could you share some insights from the workshop and explain why you believe it’s so important to bring back the previously proposed 9.6GW of nuclear energy into the energy mix.
NIASA has concluded that it is mostly overheated rhetoric and fuzzy science that seems to have dictated parts of the new Integrated Resource Plan 2018 (IRP2018). The scrutiny of the industry has resulted in nuclear being paraded as a game of cloak and dagger and less competitive economically.
The case in point is that IRP2018 makes provisions (although not committed) for some 25 GW, with the mix dominated by wind, gas/diesel, solar PV, hydro and coal. Using the same metrics, measures, generation capability and costs provided in the document, a wind-solar-gas combination is expected to cost in the region of R303 billion, with average plant life expectancy of 20 years. Nuclear on the hand could dispatch grid-ready power at some R308 billion with plant life expectancy at 60 years. Clearly the wind-solar-gas combination has to be recapitalised 3 times during 1 plant life of nuclear.
To match nuclear’s dispatchability with the wind-solar and gas combo for the same period of 60 years, the government will have to outlay just shy of a trillion rand (R924 bn). It is evident then the assumptions made by the authors of the IRP2018 are mathematically flawed and simply point to deep biases. And let us not forget that gas is imported a dollarised commodity, compromising on security of supply.
Furthermore, the term “least-cost” appears on 15 pages within the draft IRP document. However, this term is not defined, so the methodology to achieve the least-cost plan cannot be evaluated. Least cost is based on cost-benefit analysis and by definition, it is clear that the methodology applied in the draft IRP2018 does not meet the criteria for least-cost planning. It appears that the developers of the least-cost utilised a “cheapest” plan rather than a least-nett-cost plan to the economy as is defined by the utilities industry.
We want to request the government to issue a non-binding Nuclear RFI in order to obtain accurate nuclear costing as well as financing options. This will also ensure costing of fully and partially indexed pricing for various energy sources is accounted for correctly. It has been shown that bid-window prices (as used in the IRP2018) utilise full indexing where normal LCOE calculations result in partially indexed pricing over time (fixed CAPEX indexed OPEX).
The RFI is a transparent and a pragmatic approach and will level the playing field for all energy sources. We are definitely not dictating to the government on the shape or size of the nuclear fleet, our efforts are directed at ensuring nuclear is treated fairly as an energy source and any decision taken is made on the basis of sound science and not emotions.
Question: We’re seeing more and more African nations considering nuclear energy as part of their future energy mix. Why do you think we are seeing this now and do you have any thoughts on what some of these countries could do so they have a bright nuclear future?
Powering the economy might strike many as sloganeering but when you separate the rhetoric from reality, it is easy to understand that “developed economies” have achieved the status because someone in the government had the foresight to invest early in enablers like energy generation. While the continent is a late comer to the game, with wise policy making and prudent fiscal integrity countries like Ghana, Kenya, Nigeria, Sudan, Tanzania and Egypt might be able to throw serious shade on SA which has been a pioneer of sorts in Africa.
Clearly, they will have to consider the current energy requirements, domestic availability of natural resources, consideration for greenhouse gas emissions and cost-effectiveness measures, not to mention safety. The one thing almost all these countries will already have in place is some kind of arrangement / agreement with an international nuclear power developer that covers various aspects of deploying nuclear power – from finance, technology, training to safety.
Youth unemployment sits at a staggering 60% on the continent and at around 40% in South Africa. It is one thing to throw money at job creation and altogether another to invest to build infrastructure that not only leaves you energy secure but also contributes to brighter futures.
Koeberg’s largesse both in its contribution to the economy and community is well documented. Intended consequences of a nuclear build as pursued by the likes of Egypt, Nigeria and others include job creation both directly and indirectly, formal and informal. This in turn boost tax collection, local skills development and windfalls from rapid industrialisation.
The majority of the countries on the continent need to double their generating capacity to meet current needs. While South Africa’s patchwork policy on energy somehow has managed to keep the lights on, its steadfast opposition to nuclear is without merit. The rolling blackouts that were a common feature “in the day of the life of a South African” cost the economy some R300 billion.
Not all countries on the continent are resource rich in oil and gas and for them nuclear power plants are an attractive options. Without doubt the cost of construction of nuclear power plants is high, but one needs to also look at the plant life span which is around 60 years. For SA, it is the “best buy” as our fuel cost is likely to be low compared to the rest of the continent.
An argument can surely be made for renewables but with storage expensive and power from sources like solar and wind intermittent – owing them is as expensive as nuclear. They also die a relatively young death at 20 years with plant efficiency under 50%. We are not advocating that countries must get all the electricity from nuclear power, it is important to diversify energy sources for security. It is always a good idea to have some form of domestic baseload option and not to rely entirely on buying from other countries.
In SA’s case, there shouldn’t really be a debate, as a signatory of the Paris Accord and tied to emission targets, fossil fuels now have a “best by date”. With no known gas reserves and limited hydro, the onus to power SA’s appetite for continental domination might well sit with nuclear.
The opinions expressed in this interview are those of Knox Msebenzi and do not necessarily reflect the opinions of Nuclear Focus.