South African Cabinet approves nuclear program Request for Proposal

29 December 2015

South Africa's Department of Energy has received Cabinet approval to issue a Request for Proposal (RFP) for the country's 9600 MWe nuclear new build program. The final funding model will be informed by the response of the market to the RFP and be submitted to Cabinet thereafter for final approval and implementation.

The Cabinet gave its approval at a meeting on 9 December when it received a report back from the Energy Security Cabinet Sub-Committee, which had considered work being done by both the Department of Energy and the National Treasury in respect of funding and financing the program.

In a statement on 26 December, the Department of Energy said the decision to proceed with issuing the RFP will further assist in developing a funding model. Proposals in this regard will first be submitted to Energy Security Cabinet Sub-Committee for recommendation before being considered by Cabinet.

"Any decision to proceed further with a Nuclear New Build Program will therefore only take place after the RFP process has been completed and a final funding model has been developed, and then referred back to Cabinet for consideration and approval," the Department of Energy said.

The Department of Energy noted there had been a number of media reports "alleging that the Government and the Cabinet, in particular, have finalised a decision to implement the nuclear program".

The decision to proceed with developing the program was taken in principle by the Cabinet in June, namely that South Africa should proceed with developing a program for the procurement of the 9.6 GWe of nuclear power plants "to realise its self-sufficiency policy objective with due consideration to the financial implications", the Department of Energy said. "However this was subject to more work being done on the proposed funding model; the risks and mitigation strategies; and the contributions by countries as contained in the relevant inter-governmental agreements."

The Department of Energy stressed that it is committed to cost effectiveness and full transparency. "We will ensure that the integrity of the process is safeguarded at all times and is done within the existing fiscal policy framework of our Government," it said. "It should be further noted that the current process is guided by the Integrated Resource Plan for Electricity 2010-2030 which was first gazetted in May 2011."

This plan included proposals around the appropriate mix for electricity generation including, primarily, coal, nuclear and renewable sources of energy. In order to proceed with the RFP it was necessary to ensure that the National Electricity Regulator of South Africa (NERSA) has been consulted on the appropriate energy mix and particularly the intention to procure additional nuclear capacity. This was done in 2013, the Department of Energy noted, and agreed by NERSA and the energy minister at the time, Ben Martins.

"A determination to this effect in terms of the Electricity Regulation Act of 2006 was signed. However the actual gazetting of this determination was withheld until such stage that government had agreed to proceed with the Request for Proposals. Once this agreement was reached, on 9 December 2015, the present Minister of Energy, Tina Joemat-Pettersson, consented that the determination signed in 2013 could be released, particularly as nothing had changed in the Integrated Resource Plan for Energy in the intervening period," the Department of Energy said.

It added: "The Department accepts that this should have been made clear when the determination was gazetted on 21 December 2015."

South Africa is the only African nation currently to generate electricity from nuclear power. The two Koeberg reactors have been in operation since the mid-1980s and today provide around 5% of the country's electricity. South Africa produced 540 tU in 2013. Although the country currently procures conversion, enrichment and fabrication services on the world markets, it has in the past operated its own fuel cycle facilities, and has carried out initial feasibility studies on the re-establishment of nuclear fuel cycle programs. Conversion, enrichment and fabrication facilities are all envisaged, either domestically or with overseas partners.

Researched and written
by World Nuclear News

Filed under: Energy policy, South Africa