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Eskom’s role and outstanding generation plan key to nuclear RFP delay

Statue at Eskom's head office in Johannesburg

Statue at Eskom's head office in Johannesburg

Photo by Duane Daws

30th September 2016

By: Terence Creamer

Creamer Media Editor

  

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The issue of Eskom’s role in the procurement process for South Africa’s nuclear new build programme is said to lie at the heart of Cabinet’s surprise decision to delay the release of the controversial nuclear request for proposals (RFP), which was due for dissemination on September 30.

However, it is also apparent that some in government are keen for the Integrated Resource Plan (IRP) for electricity to be agreed and updated prior to commencing with any process to test offers from nuclear vendors. The current IRP iteration, which outlines the inclusion of 9 600 MW of additional nuclear capacity by 2030, contains demand and generation-technology price assumptions that are six years out of date.

Minister in The Presidency Jeff Radebe has indicated that the decision to delay the issuance of the RFP arose following interactions between government and Eskom.

The State-owned utility has already been confirmed as the owner and operator of any new nuclear power plants, but there is now also a suggestion that it should play a more prominent role in the actual procurement process, which is currently led by the Department of Energy (DoE).

This is significant in light of the fact that, at the height of Eskom’s operational and financial instability, even the utility’s owner-operator role had been brought into question. However, that position was reaffirmed by Cabinet last year and, following more recent interactions between Eskom and the DoE, a view was expressed that Eskom should be more fully integrated into the procurement of the plants for which it will be ultimately responsible.

Under CEO Brian Molefe, Eskom has become increasingly vocal in its support for nuclear and for the utility playing a dominant role in the build programme. Eskom has even indicated that it will be in a position to contribute to financing the plants, owing to projections that it will generate some R150-billion from its operations in the coming ten years. The utility has also indicated that it is targeting a levelised cost from the new nuclear facilities of less than R1/kWh and that it will be pursuing tried-and-tested reactor designs.

Eskom spokesperson Khulu Phasiwe tells Engineering News Online that the issue of Eskom’s role in the procurement process is yet to be finalised, but that early indications are that government is keen for the utility to “run the whole show”.

Less certain is what will become of the non-power-station components of the RFP, which relate to the multipurpose research reactor to replace the Safari 1 reactor at Pelindaba, the possible restarting of a domestic nuclear-fuel cycle and the back-end management of nuclear waste. It is understood, though, that the South African Nuclear Energy Corporation, or Necsa, has been participating in some of the recent discussions.

Eskom, Phasiwe stresses, is ready to play whatever role government’s deems fit and expects there to be clarity on how the responsibilities will be apportioned in the not-too-distant future.

Radebe indicates that Cabinet will consider the matter again in the coming few weeks, while Energy Minister Tina Joemat-Pettersson stresses that government remains “fully committed” to the programme. She indicates that the decision to delay the issuance of the RFP follows “various representations” over the last few weeks for further consultation in the build-up to the procurement process.

It is understood that Joemat-Pettersson also recently held a meeting of her Ministerial Advisory Council on Energy, where the issue of the new IRP was discussed. Questions were raised at the meeting about whether the nuclear RFP should not be delayed until the new IRP had been agreed within government and canvassed with the public.

Science and Technology Minister Naledi Pandor supported this view in late September by suggesting that, “at a minimum”, the new IRP should be agreed before the nuclear RFP was released.

Speaking at a briefing of Cabinet’s Economic Cluster, Pandor said the cluster of Ministers would be deliberating on the next iteration of the IRP at its next meeting. Once the cluster had agreed on the IRP, it would be taken to Cabinet for approval and it would then be shared with the public.

However, others in government believe it is possible to proceed with the issuance of the RFP even in the absence of agreement on an updated IRP and expect the document to be released before year-end.

That said, there is also growing sensitivity to the threat of litigation, with an application into legality of the procurement process, which has been brought by the Southern African Faith Communities’ Environment Institute and Earthlife Africa Johannesburg, already set down for a High Court hearing on December 13 and 14.

Edited by Creamer Media Reporter

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