Bokamoso | The nuclear deal will turn our energy crisis into a jobs crisis


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Regardless of your personal view on nuclear power, our government’s plan to build up to eight new nuclear reactors is one of the worst decisions it could make for our country’s future.

This has nothing to do with the risks involved in atomic energy. It has nothing to do with what happened at Fukushima or Chernobyl. It’s not even primarily about the huge potential – or make that the likelihood – for grand-scale corruption in a procurement of this size.

It has everything to do with killing economic growth and killing jobs.

Until the government tells us how much the nuclear deal will cost, how we plan to pay for it and how they intend to choose the preferred bidder, we cannot begin to entertain the notion of going down this path.

To date, government has refused to disclose any of these crucial details, which should certainly set the red lights flashing. But enough smart people have pieced together the information to give us a pretty clear idea of what we’d be in for. And it is simply unaffordable.

A build of this size and nature will be absolutely disastrous for South Africa’s economy, and particularly for the poor. Whichever funding model is chosen, you can rest assured that it will be paid for by the South African taxpayer, and that we can expect substantial tariff increases over many years.

This will see the poor priced out of legal electricity usage, it will see illegal connections sky-rocket, it will see an increase in non-payment (which is already dangerously high) and it will see energy-heavy industries like mining and manufacturing shedding many more jobs

The nuclear deal will drag our economy even further back and it will cost thousands and thousands of South Africans their jobs. For a government that claims to be pro-poor – and for a country where 5.2 million people cannot find work and a further 2.4 million have given up looking – this is unfathomable.

Experts have put the bill for a nuclear build of this size in the region of R1 trillion. Of course, government has vehemently denied this astronomical figure and has now countered with their own estimate of R500 million (or $4200 per megawatt/hour). But nowhere, outside of China, has anyone built nuclear stations for anywhere near this amount.

And if government says R500 million, you can bet that’s their absolute best-case scenario. But even this number is deliberately misleading because it excludes financing costs, currency fluctuations, the cost of fuel storage over the lifespan of the station and the cost of eventually decommissioning these stations. And we’re not even talking about cost overruns yet. Globally, 75% of nuclear builds run well over time and budget.

But even if we were to agree on a ballpark number, we simply have no way of paying for it. Instead, government will likely opt for a private-public partnership – a 20 to 30-year offtake agreement between Eskom and the preferred bidder. Not only will the cost of such a financing model be directly reflected in our electricity tariffs (potentially starting five or six years before completion of the build to prevent a massive electricity price spike), it could also allow the funding model to escape all parliamentary scrutiny.

Apart from being unaffordable, a nuclear build of this size is also a complete contradiction of government’s very own National Development Plan.

The NDP urges caution. In fact, in the three paragraphs that fall under nuclear, the NDP actually speaks about developing gas as a vital energy source. According to the NDP, nuclear power should be only be considered “within the strict confines of affordability” and as a last resort. If government can so easily disregard their own blueprint for state policy and budgets, it does not bode well for anything else contained within the NDP.

Then there is government’s policy framework for energy planning, the Integrated Resource Plan (IRP), which they use as a justification for pursuing nuclear energy. This IRP was drawn up in 2010 and is flawed and outdated in its assessment of our future energy needs.

Our current energy consumption has regressed back to pre-2007 levels. NERSA recently indicated that baseload demand is now almost equal to installed baseload capacity, raising serious questions about government’s claims that nuclear is urgently needed to meet baseload electricity demand.

The IRP also overstates future demands while failing to take into account the massive advances made in recent years in cheap renewable energy.

And finally, we simply don’t have the capacity and the skills to run eight nuclear power stations. In fact, we don’t even have the capacity and skills to run the one we already have. A self-assessment conducted by our Department of Energy in 2011 (and reviewed by the International Atomic Energy Agency) reportedly concluded that South Africa was considered deficient in almost half the categories of assessment.

Twice a year, an organisation called the World Association of Nuclear Operators conducts their own assessments of our nuclear operations, and their report slams our ability to run Koeberg safely. It identifies leadership and management issues, serious skills deficiencies and cash flow problems. It concludes that “Eskom’s management policies do not promote a nuclear safety culture within the organisation or at Koeberg”. And government wants to run eight of them?

The DA is not opposed to nuclear power. But we are opposed to an energy plan that is outdated, spurious and plainly not right for the country.

We support the guide set out in the NDP that calls for a diversification of our energy mix. We support smaller, modular builds that can come online quicker. We support a far greater proportion of wind, solar, hydro and gas energy. We support the continued use of coal-powered generation, because this is one resource of which we have huge reserves. And we support the opening of the grid to more independent power producers to break the crippling Eskom monopoly.

We believe that this is the only solution to our energy crisis that will meet the demand of a growing population and a growing economy without shutting down businesses, shrinking our economic growth and killing precious jobs.

In the short term, there is one more thing we can do to prevent further damage to our energy security, and that is to fire the Minister of Energy, Tina Joemat-Pettersson. She is the worst possible appointment as head of one of our most important government departments.

Before taking over as Energy Minister last year, she single-handedly left a trail of destruction at the Department of Agriculture, Forestry and Fisheries. From the awarding of controversial tenders and the mess she made with fishing quotas to her exorbitant spending of public money on hotels and travel, she was consistently ranked among our worst cabinet ministers.

We simply cannot afford to have someone with her abysmal track record driving a project of this magnitude. Tina Joematt-Pettersson has to go.

The DA will do everything in its power to block this nuclear deal. I have already written to the Energy Minister asking for the missing details on cost, funding and procurement. We have also asked for a parliamentary enquiry into the agreements already signed with the various bidding countries.

The more we find out, the more it becomes obvious that we should just walk away from these nuclear power stations. We can’t pay for them, we don’t have the skills to run them, they are being pushed through by a compromised president and an incompetent Energy Minister and they will ruin our economy.

Mmusi Maimane
DA Leader

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