In an exclusive interview, Chris Yelland, investigative editor at EE Publishers, posed a number of questions to Nuclear Energy Corporation of South Africa (NECSA) CEO Phumzile Tshelane and Chairman Kelvin Kemm, to explore issues surrounding the science, engineering and law surrounding nuclear fuel production and the proposed nuclear new-build in South Africa.
Q1: Did the recent judgement in respect of the nuclear procurement process in South Africa come as a surprise to NECSA, Eskom and the nuclear industry, and what are the next steps? An appeal, or starting the process again with a clean slate, or what?
Dr. Kelvin Kemm: The nuclear industry in South Africa has always been known for doing things precisely right. In fact we have the reputation at the International Atomic Energy Agency (IAEA) of being about the best country in the world, or equal to the best, for all the procedures and protocols that we abide by. That is our culture. So yes, it did come as a surprise. However the judgement has been largely misinterpreted, because it was not an attack on nuclear technology as such – it raised a problem with procedure, and we are quite happy to fix this.
Right now, the lawyers are considering exactly what to do and how to approach the whole issue in order to get it right. I can’t imagine that the process will have to start again from scratch, as so much has already been done. This is not a new project, it is nearly 20 years old. It has been sketched as though this was thought up a couple of years ago, but it wasn’t – we were talking about the project at the beginning of the century. The examination of nuclear sites alone has been done over ten years. So there’s a lot of work that’s been done.
Even if the intergovernmental cooperation agreements (IGAs) are wiped off the table, it doesn’t alter the spirit with which we have been interacting with our counter-parties to the agreements. The issues with the Section 34 ministerial determinations are procedural, and this will have to be addressed by the lawyers.
Q2: Are intergovernmental cooperation agreements (IGAs) a legal prerequisite for nuclear fuel production and a nuclear new-build in South Africa? Do IGAs have to be in place before any request for proposals (RFPs) to potential vendors or partners is issued?
Mr. Phumzile Tshelane: The answer is simple. We had co-operation agreements with most countries that deal with nuclear fuel and nuclear power even before the nuclear IGAs. So we have been dealing with these countries for many years. However the important thing is that the nuclear IGAs are specific to certain activities. They are not a legal prerequisite, but they entrench the spirit of co-operation that we are looking for with potential vendor countries.
There is certainly nothing stopping us from cooperating in developing and producing nuclear fuel, from mining, beneficiation and enrichment, through to construction and fabrication of complete nuclear fuel assemblies. In fact, we have been dealing with the USA, France, Japan and Russia with nuclear fuel related activities and procurements for both Koeberg and the SAFARI-1 nuclear reactors for decades without the IGAs, so there’s no stopping us.
Q3: Why did the DoE and NERSA not follow due process in meeting the constitutional, legal and regulatory requirements in respect of the nuclear IGAs and ministerial determinations for the proposed nuclear new-build in South Africa?
Dr. Kelvin Kemm: I think it was more of a slip-up in the sense of minor things. It appears to us as that the ministerial determinations for wind and solar power have also not followed the prescribed requirements in respect of public consultation processes. These are fine detail which we thought had been done.
I personally have been involved in a number of public meetings on nuclear power in general, site approvals, etc. In my mind, along the way, I never thought that there was something that had been left out. So my feeling is that some fine details have been dug up, of which we were not aware.
Certainly, whatever it is, we are quite happy to fix it. We are quite happy to do whatever the wind and solar power industries did, because obviously everybody must abide by the same set of rules. So I think it was more a surprise that there was fine detail that previously never came to light. There was never any intent to deviate from the prescribed processes.
Q4: Knowing that nuclear power is subject to intense scrutiny and challenge whenever loose ends occur, surely one should proceed strictly by the book on the constitutional, legal, regulatory and technical requirements of nuclear to avoid the very kind of challenge experienced?
Dr. Kelvin Kemm: I believe you are correct. As I have said, I think we tried to do that. There is the science and engineering side, and there is the legal side. And it is unlikely that the science and engineering side would spot the finer legal issues unless these were drawn to their attention. I myself have been to the various nuclear sites, and I have been involved on the science and engineering side. We looked at every aspect that we could find. Site investigations went down to the last plant, bug and bird, and have been done over and over again.
So if you had asked me prior to this court case if there was anything that had been left out I would have said no. So it was indeed a surprise. There are still some issues of the judgement I don’t fully understand, in addition to precisely what it is that we have to do in terms of the public participation process. This must be clarified between the scientists, engineers and lawyers so we approach the issues in a unified fashion.
Q5: What do you believe is the appropriate mix for nuclear power in South Africa? Is it rational for RFPs to be issued for a 9,6 GW nuclear new-build based an outdated IRP 2010-2030, while a Draft IRP2016 is still in progress to determine whether a nuclear new-build is required or not, and if so its size, timing, business case and affordability?
Mr. Phumzile Tshelane: We don’t expect that the new revised IRP 2016 will be too different from the existing IRP 2010-2030. If it is, then we are schizophrenic as a country in what we do in terms of planning.
The appropriate level of nuclear in the South African energy mix is that we should get between 30 and 40% of our electrical energy from nuclear. The reason for that is we need dispatchable forms of energy to drive the economy on a continual basis, and reduce CO2 emissions. We also need to solve the problems of coal with carbon capture and storage (which is currently just an idea), and we need to develop battery technologies further for storage of energy from renewable sources.
Until we solve these issues, the deployment of baseload and dispatchable energy sources remains very important in the South African environment. Right now we only have 5% of nuclear in the mix. This is unacceptable – we have so much uranium underground, and we are not using this abundant resource.
Q6: What is the strategic need and business case for uranium mining and nuclear fuel production in South Africa, bearing in mind that nuclear fuel is readily available from multiple sources globally, and that the viability of nuclear power generation is not negatively impacted or dependent upon local nuclear fuel production?
Dr. Kelvin Kemm: I believe we are at the beginning of a whole new nuclear phase on planet Earth – it is the right way to go, it is the environmentally friendly way to go, and it is the sensible way to go. Our strategic position and the need for energy security requires that we should not be entirely dependent on foreign sources of nuclear fuel. Now is our chance to climb into the world’s nuclear market and become major suppliers of nuclear fuel.
South Africa is one of the oldest countries in this business. We were approached for uranium in 1940, and again immediately after the Second World War. Bear in mind that NECSA’s birthday dates back to 1948. Back then, already, South Africa’s superior uranium resource was recognized.
Now we don’t want to just sell uranium all over to the world, we don’t want to just sell yellow cake – which is the oxide that’s traded. We want to be in the processed fuel market. What I am seeing now is an opportunity to get into the market for the type of fuel that is used in the Koeberg reactors – the long, metallic, fuel-rod assemblies. We also want to manufacture and supply pebble-bed type fuel, comprising high technology, cricket-ball sized fuel elements that NECSA has manufactured, equal to the best produced in the world.
So we are looking at the potential for South Africa to be world exporters and earners of serious foreign exchange in the nuclear fuel business. It’s not just a case of us supplying our own needs.
Q7: How much life is left in the 52-year old SAFARI-1 research reactor at Pelindaba, and can its life be extended before you have to start decommissioning?
Mr. Phumzile Tshelane: SAFARI-1 is getting old, but is running better than any other research reactor of its type in the world. We run it for more than 300 days a year – a very significant achievement. The reactor is very important feature in the South African technology scene, and produces key outputs such as nuclear isotopes for medical treatment, non-destructive testing in the petrochemical industry, and much more.
There is no such thing as life-extension as far as research reactors are concerned. There are life-limiting issues that we have to deal with, for example if the reactor vessel is irradiated beyond a certain point, it has to be decommissioned because it will be too expensive to replace.
At the current state of the SAFARI-1 reactor, we can run it much longer, but we don’t know exactly when the life limit of the reactor vessel will be reached. But we plan for it to be decommissioned between 2030 and 2035. That’s the plan that we have, but the plan is not informed by some superior knowledge of when the end of life will be. It is just a plan so that we can put funding aside to deal with the different issues that could arise at that time.
Q8: Has adequate provision been made in NECSAs financials for the decommissioning liability? Has the NECSA board now signed off on NECSA’s 2014/15 and 2015/16 financial statements, with the concurrence of the Auditor General?
Mr. Phumzile Tshelane: Regarding decommissioning funding, we have a cabinet decision that says government is responsible for the financial liability of this critical resource, but NECSA must carry it out. NECSA must decommission and decontaminate the SAFARI-1 reactor and the other facilities we utilise for the national good.
So the decommissioning liability issues that we had with the Auditor General have been dealt with, and the 2014/15 and 2015/16 annual financial statements have been signed off and accepted by the Auditor General. We are now starting a new auditing phase for the 2016/17 financial year, and we don’t expect any issues at this point.
Q9: Is the cost of decommissioning the SAFARI-1 research reactor at the Pelindaba site a NECSA liability, reflected on NECSA’s financial statements, or a SA government liability, supported through government guarantees?
Dr. Kelvin Kemm: The decommissioning liability is reflected on the NECSA balance sheet. What happened, and gave rise to some of the issues with the Auditor General, was that internationally there is a debate about “What do you mean by decommissioning?” In earlier days, decommissioning looked problematic. But as time goes by, it becomes easier and easier, because much more decommissioning is being done now than was done a decade or so ago.
Now we look at decommissioning as taking the actual reactor apart, the metal casing and what’s inside. We do not include the entire building, waterworks, and so on. There are some people that maintain you have to take the entire plant and buildings apart, to plough the land and return it back to virgin state. Therefore you get very different numbers depending on the approach to this. To my mind, the problem originated from a very unrealistic figure for decommissioning put down as a debt to be paid by future generations, escalated into the future to a very large number.
We resolved these issues with the Auditor General, as it is of course NECSA’s responsibility. However, NECSA is an organ of the state, and so at the end of the day, the state has responsibility. If anything ever went wrong, and NECSA was closed down, the liability wouldn’t just evaporate – there is ultimately a state responsibility.
Q10: Is there a stand-alone business case for a new nuclear research reactor on the Pelindaba site that can be project financed and/or financed on NECSA’s own balance sheet? Or will there be a need for government guarantees to fund the new research reactor?
Mr. Phumzile Tshelane: Any facility that fits into the National System of Innovation is a government responsibility. Thus any new research reactor would have to be a government responsibility. You can have a business case, but if the government doesn’t want to do it, it’s not going to happen. So government will have to come to the party in one form or another. It may not be guarantee, but government will have to make the decision as to whether South Africa will have a new research reactor or not.
In fact, as we speak, government wants a new research reactor on the Pelindaba site to continue the work under the National System of Innovation, just as we are doing at present.
Q11: What is the plan for long-term storage and final disposal of nuclear waste in South Africa?
Dr. Kelvin Kemm: At present we have the Vaalputs repository in the Northern Cape for low and medium-level nuclear waste. NECSA is responsible for this, and the repository has been operating for 30 years. NECSA is also responsible for on-site storage of high-level nuclear waste from the SAFARI-1 reactor.
High-level nuclear waste in the form of spent nuclear fuel elements from Koeberg nuclear power station for the last 30 years is currently stored on the Koeberg site, and is the responsibility of Eskom.
Long-term storage and final disposal of the relatively small volume of high-level nuclear waste – which by the way is extremely valuable – could be carefully stored underground. South Africa has unique tunneling and deep-level underground mining skills, so none of this is new to us. I do not see it as a technological problem – it is primarily a public relations issue to keep people properly informed.
At the moment there are only two countries in the world, Finland and Sweden, where there is a government authorised decision on high-level nuclear waste disposal. I would love to see South Africa as the third country, and there is no reason why we can’t be. However, at present there is no government decision on what to do with high-level spent fuel. This doesn’t mean we don’t know what to do with high-level nuclear waste – it just means we can’t go into the next phase until the government authorises this.
The National Radioactive Waste Disposal Institute, currently under the leadership of Dr. Wolsey Barnard, came into being in South Africa a few years ago, and in due course will take responsibility for all nuclear waste in South Africa. I certainly don’t have any sleepless nights over what to do with nuclear waste in future.
Q12: What are the funding requirements for long-term storage and final disposal of high-level nuclear fuel waste in South Africa, who funds this, where does the financial liability for this currently reside, and how much will it cost?
Dr. Kelvin Kemm: I don’t think the costs of long-term storage and final disposal will be nearly as much as some make them out to be. The costs will be largely related to digging the underground tunnels, and transportation of the spent fuel to the final repository.
Some people put numbers to nuclear waste disposal and storage, they multiply these out for thousands of years, they include all sorts of risk factors, and then they escalate these things for ages. When we look at it, our minds are absolutely boggled as to how a smallish number gets magnified out of all proportion to some outlandish figure.
The reality is that there isn’t any mystical expenditure related to this. We know what we doing, we move radio-active material around already, and so do not see this as a major financial or technological problem.