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Nuclear: too many conspiracy theories

Let’s see what the deal could look like in reality.

Nuclear fuel is not a big expense and South Africa will initially use imported fabricated fuel, energy engineer Andrew Kenny told the Power & Electricity World Africa 2016 conference in Sandton on Tuesday.

Kenny’s statement comes against the background of media reports alluding to a political agenda to build costly nuclear power stations to favour the politically-connected Gupta family’s uranium mines.

Speaking on behalf of Nuclear Africa, Kenny said uranium is cheap, and rumours that there is big money to be made from uranium if the nuclear build programme goes ahead, are nonsense.

He also slammed allegations that a deal has already been concluded between South African politicians and Russia for the supply of nuclear reactors, saying he has not seen any evidence in this regard. Kenny said the rumours stemmed from over-enthusiastic reports by the Russians that flamed conspiracy theories in South Africa.

While he personally prefers the American/Japanese AP1000 nuclear reactor, Kenny nevertheless believes the Russians with their VVER reactors are the front-runners to win the bid for South Africa’s proposed nuclear build programme.

The bid is still in its early stages with government expected to issue a request for proposals before the end of March.

Cost

Kenny further denied that the programme to build 9 600MW of nuclear power generation capacity would cost the country R1 trillion.

He said some recent nuclear deals elsewhere have been concluded within the affordability limit of $4 200/kWh set by government and construction periods were reasonable. He gave the following examples:

Screen Shot 2016-03-15 at 3.37.12 PM

Source: Andrew Kenny

Kenny said the only new nuclear construction that is badly late is the French EPR in Finland and Flamanville. During Moneyweb’s recent visit to the Flamanville plant, France’s EDF told South African journalists the new Flamanville unit will be switched on in 2018, six years later than expected. It was ascribed to the unit being the first with enhanced safte features and the French contended that subsequent similar units, including one being built in China, would be completed faster.

Kenny said the capital cost of building a nuclear power plant is bigger than for other technologies, but the fuel cost is very low in comparison. Operation and maintenance costs are reasonable, he said.

Nuclear power plants have a very long life of up to 60 years and very high load factors (availability). This translates into low levelised cost, which is total cost over the lifetime of the plant.

Keeping costs down

Capital cost can however be reduced by using standardised and simplified designs, and proper preparation for compliance with nuclear regulation. He said it is not uncommon for plant development to come to a standstill in order to ensure proper regulation. This is very costly.

Kenny said South Africa should therefore plan for a fleet of reactors of the same design, in order to bring down costs on subsequent units due to lessons learnt on the first. “That is why capital costs are coming down in China and South Korea,” he said.

He added: “The notion that 9,600 MW of nuclear will cost us ‘R1 trillion’ is an urban legend with no basis in fact.”

Funding

Kenny said it would most likely be financed by debt, as Eskom did from 1970 to 1990 when it built over 30 000MW of coal-fired power stations.

“Even today, with economic and political problems, with threats of down rating (downgrading), SA and Eskom bond yields are still only about 9.5% nominal (3.5% real). This is cheap debt for Eskom but attractive to local and foreign investors,” Kenny said.

He expects all vendors to offer loan financing, perhaps up to 100%.

He considers other financial methods like power purchase agreements (PPA) “too complicated and filled with contingent risks.”

This statement follows French representatives indicating that their bid would include a mix of debt and equity, with Eskom, intensive power users and possibly Chinese investors taking a stake. The intensive users would be offered security of supply through a PPA in return.

Front runner

Kenny said Russia’s Rosatom offers a range of reactors, but its 1 200MW AES-2006 (1200 MW) is the most likely for South Africa. Russia will offer VVER reactors, “which are pressurised water reactors (PWRs) of a sound, conservative, safe, reliable design,” he said. The RBMK plants that built Chernobyl, the site of the world’s worst ever nuclear accident, will never be built again, he said.

Russia has the world’s most integrated and complete nuclear power industry and is also the world’s biggest exporter of nuclear power plants, Kenny said. He told Moneyweb that France is the only other vendor country offering the whole nuclear value chain, including fuel production and waste management.

Kenny said Eskom’s Koeberg nuclear power station was build by the French and has been performing for well over 30 years. The French are offering their 1 600MW EPR reactor, but have suffered reputational damage due to delays and cost overruns on new EPR plants in Finland and France, he said.

Kenny said China offers a range of reactors, including the AP 1 400, which is a larger version of the Westinghouse AP 1000. The country’s nuclear industry has had a lot of experience in building nuclear plants on time and economically, but has not build one in another country.

He said South Korea, offering a 1 400MW APR-1400 reactor, also has a successful domestic record of building and operating nuclear plants and is currently building four reactors in the United Arab Emirates.

Nuclear power in nine years?

Kenny expects that the South African government will award all of the six to eight planned nuclear plants that will make up the 9 600MW it requires, to one vendor. The first construction will be at Thyspunt near Jeffreys Bay in the Eastern Cape and will consist of two units, he predicts.

He expects suppliers to be given hard orders for the first two units with promises of more to come. Construction might begin in two years’ time and the first unit might come in operation seven years thereafter, he says. “The second will follow within a year or so.”

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Because of the very low demand on our Escom power supply grid we can delay the high cost of building new nuclear power stations.
A better & safer investment would be to spend the money on education that will enable our black youth to become self supporting and productive.
If we do not do that we are going to find ourselves dealing with radicalization we see creeping down africa like we see in Nigeria, africa’s biggest economy.

I do not know where you get the “very low demand” from. Eskom is already talking about load shedding this winter. A few months ago there was an article about mines not being able to sink new shafts because Eskom refused to guarantee electricity supply.
There is plenty of money for education, the problem is not using it properly. If, and this is a very big if, somehow the education system was sorted out and this way the youth would became self supportive and productive as you claim, this would require far more electricity than Eskom is capable supplying. Just think of all the new companies employing millions of new workers.

@ johncan. Socialism will not give us power. Stick to the subject.

I don’t think it is so much about the conspiracy theories but rather to do with a huge number of very concerned citizens who think
1. The money can be better used elsewhere
2. The wobbly state of our economy
3. The wobbly state of our leadership and endemic corruption
4. The wobbly state of Eskom
5. The dangers of nuclear power
6. The attraction of alternative forms of energy

On further reflection i would like to add a couple of things.
Our country is battling – we need to put the basics in place –
1. money towards land ownership with security of tenure, small scale agriculture with training and support – no one should go hungry!
2. breaking the cycle of violence, domestic abuse, racism and aggression – identifying and supporting positive community models, more policing, rehabilitating offenders, positive community service
3. money towards basic technical skills – welding, sewing etc – with ongoing training and support.
4. Integrating poorer housing communities closer to areas of work.

Why 9600 MW? Everybody in the energy sector knows that an updated policy document (Integrated Resource Plan 2013 update) was published by the Department of Energy. In this document both Eskom and DoE concluded that a nuclear decision could be pushed out and the country did not need 9600 MW but only 4860 MW. Strange indeed that Kenny chooses not to touch on this aspect. Kenny has provided something useful by quoting some recent nuclear deals which range in size from 2000 MW to 5400 MW. This begs the question – why are we hell bent on 9600 MW and whose interest does that sort of capacity serve?

It will take at least 10 years for any new power station to come online, whether nuclear or conventional. Personally I think the time period is closer to 15-20 years. By then the population will be 65-75 million judging from the growth in the last 20 years. It will require far more electricity and if by some miracle unemployment will be reduced, or at least the number of unemployed will not increase, the growth in business will require far more electricity. The increased need from 4860MW to 9600 includes the expected decommissioning of several ageing power stations.

The IRP takes decommissioning and demand growth into account, but I suspect you know this….

What do you suppose happens to the final price when the schedule is estimated at less than 10 years, but it then takes 15-20 years to build? Hint. take a look at Medupi and Kusile.

It is hard not to think there are other factors in making the nuclear decision.

But let’s see how nuclear fares when:
1) they don’t rely on government to insure them (no private insurer will insure a nuclear reactor – and for good reason, of the around 450 nuclear power stations installed, there have been 3 that have resulted in cities being evacuated. I personally think a 1 in 150 chance of evacuation is pretty high).
2) they offer a price/kwh (i.e. per delivered unit of electricity) and take the capex and operation risk (just like other power plants).
3) the true cost of decommissioning is in their financials and guarantees to the value in South Africa are maintained for the life of the power plant (i.e. so not the parent company in another country). Currently, the UK governent is spending the equivalent of between 30 and 50% of the cost of a new power plant per MW to decommission nuclear plants (and when I say decommission that means fence it off, send as much nuclear waste to a rural area, and then concrete the plant up – let another generation in 50,000 years worry about it)

Nuclear lovers going on about it last 40 (or heaven forbid 60 years, when even now countries want to stop their unsafe old tech plants after less than 40 years), compared to other technologies, but this means a country needs to commit for 40 years. Solar, wind, even coal and gas would also last 40 years, and would have cheaper prices if contracted that long, ITS JUST THEY THE NUMBERS STILL MAKE SENSES ON RELATIVELY SHORTER PPA’s.

I happen to have spent a large portion of my life working on coal power plants, and c$%$# happens – boilers blow up, turbines get flung over a kilometer away due to a combination of factors of wear, weather and human error. Accidents are a statistical thing and as one shores up one accident, sure enough the unexpected happens in another area. So the reasons for the next failure are never seen (and there have been 33 major incidents since 1952, including 3 town evacuations and including direct deaths from overexposure- source IAEA).

There is enough evidence to show that on average, nuclear plants are 120% over budget, and 90% of the projects are overbudget (Sovacool et al.) so let private industry take that risk (along with equal terms to the rest of sector, plus in a area where there is no-one living for 100km).

I do not want to say that nuclear is totally safe, but looking at statistics much safer than coal. Fukusima had not a single death because of radiation, but 10000 were killed by the tsunami. Even Chernobil had less than 100 confirmed death and their power station did not have a containment shell like any normal nuclear power station, with it the number would be far lower. On the other hand, even windmills have higher death rates per GWh than nuclear.

Are you on medication by any chance, because the deaths at Chernobyl and Fukushima are well documented. 6000 thyroid cancers directly attributable to Chernobyl alone.

ubuntupunk
The article you are quoting states: “This article is written like a personal reflection or opinion essay that states the Wikipedia editor’s particular feelings about a topic, rather than the opinions of experts.”
The real Wikipedia article is totally different, even the article you referred to states that the UN and WHO has far lower death rates than the writer claims.
You have totally ignored my note about the containment shell. Also, I could not find any death from radiation at Fukushima, Wikipedia claims 37 non-fatal causalities.
With radiation related death/cancer the major problem is that lot of people use the linear no-thresold model, which in my opinion extremely biased. Using it one should ban any high altitude settlement like Joburg because of the increased background radiation. (in JHB the background radiation is higher than inside a nuclear power station)
One can find totally biased anti-nuclear articles from people who know nothing about nuclear science or engineering. It is like using the opinion of the SACP to make investment decisions.

None of the nuclear experts – that have been given plenty of column space on moneyweb – have addressed the critical issue of nuclear waste storage.
If you want to know why advanced economies like Germany are anti nuclear – it is not because nuclear power stations are unsafe (the ones being built now are actually quite safe) but rather that no one has developed a safe long term storage method for nuclear waste.

You will not find better proof of this than by visiting the UK regulator for nuclear waste website ( http://ukinventory.nda.gov.uk/about-radioactive-waste/how-do-we-manage-radioactive-waste/high-level-waste/ )
and hopefully shudder when you read that their masterplan for long term storage “At the moment, HLW is kept in robust interim storage facilities until a long-term disposal route is developed”.
Great! so just produce the radioactive waste now and THEN hopefully find some way to store it?!?!

Conventional Light Water Reactors are inherently unsafe. Nuclear power is both costly and bad for the environment. Capital costs will never be recovered, instead nuclear locks South Africa into a gillette-razor blade model in which uranium is first mined, and the processed into fuel, fissioned into transuranic products that are harmful to health and the environment, resulting in emissions of radioactive isotopes and finally dumped on rural people, where it needs to be stored for a very long time. The cost of decomissioning nuclear plants shows that the entire formula for calculating costs is flawed, since this isn’t costed into the commissioning of the plant. Instead taxpayers are forced to bail-out these costly ventures which do nothing more than line the pockets of persons such as Kenny. No to Nuclear Power. Forward to a non-racist, non-sexist, nuclear-free continent. http://medialternatives.com/2016/01/26/burning-platinum-no-solution-to-power-crisis/

Sickening to see Andrew Kenny “spokesperson for Nuclear Africa”, the man is a quack, who has spent the past two decades advocating for Pressurised Light Water Reactors, a 1950s technology which is inherently unsafe and dangerous to human health, as one can see, the guy looks like he stepped out of a museum. Capital costs will never be repaid in a “Gillette razor blade” scheme in which uranium is mined, then processed into fuel and patented pellets, fissioned to create heat resulting in transuranic products, which are then stored on site, or reprocessed into weapons such as depleted uranium, and also dumped on rural neighbourhoods. Cost of waste disposal and decommissioning the plant is never figured into the startup expense, which is then borne by the public, who effectively are forced to enter into a series of bailouts of the project. All of South Africa’s current reactor programmes have resulted in emissions of radioactive isotopes into the environment. The breeding of Cobalt-58 and other transuranic products at Koeberg resulting in contamination of workers has never been explained. Emissions of radioactive isotopes such as strontium-90 and caesium-137 from Koeberg exceed European Safety guidelines. Strontium and Caesium bioaccumulate up the food chain, via wheat, diary and shellfish and end up in people’s bones, where they become the cause of blood cancer.

Koeberg emissions include radioactive Strontium-90 which has a half-life of 28.79 years, in other words, it is around for almost 60 years when released into the environment, and continues to emit beta radiation for this period, during which it bioaccumulates and ends up in peoples bones. Good reason why we don’t want beta-emitters in our environment. Think about medical isotopes, this is like going for chemotherapy on a daily basis. Koeberg also has routine emission of radioactive Caesium-137, a fission product which has a half-life of 30.17 years, is around for over 60 years and is a beta-emitter. Thanks to Eskom and Koeberg, we get our daily dose of beta-emissions via milk, wheat, shellfish. This isn’t the same as UV radiation. Beta emissions are distinct from X-Ray emissions. Beta radiation takes the form of either an electron or a positron (a particle with the size and mass of an electron, but with a positive charge) being emitted from an atom. The main threat is primarily from internal emission from ingested material.

You must have failed science in school, half-life of 28,79 does not mean that it disappears in 60 years, it means that in 28.79 years the radiation halves, the same happens in an other 28.79 years too. So in 60 years the radiation level is about quarter of the original. You probably live in a lead lined bunker because there is plenty background radiation outside, and the higher you go, like Joburg, it increases. Do not comment about things you know absolutely nothing.

Quite so. If it had been the half life that ubuntupunk described, then it would have been pointless to have such a measure, because multiplying by two is not difficult, provided of course that one has a calculator which include a multiply function. Most do. 🙂

Mr Kenny can slice it & dice it as many time as he likes, but the end result will always be that nuclear will ‘generate’ an IMF loan with suffocating payback conditions attached. Eskom’s legacy.

I see two possible long term scenarios for SA.
1 The country muddles on with low or even negative growth and high unemployment.
In this case the nuclear stations make no real difference. the country will be bankrupt anyway, it will slide into the usual African mess. The country (Russia or France) financing the power stations will loose more than SA.

2 Due to some major changes the growth increases to 3%+, hopefully 5%+ level.
This can happen by the ANC waking up or the IMF/Chinese force drastic changes in the way the country is run. This would increase the employment level and so the electricity demand. This case the country would definitely need much more power than now. Personally I think the nuclear option is cleaner than using coal. Hydro is not feasible, other renewables cost much more specially if you take the base load requirement into consideration.
Since a power station takes more than 10 years to build and commission, might as well start now and hope for the best.

Wow! Start now and hope for the best, is a great way to approach the single biggest financial decision ever made by SA. Hope that we need the power, hope that the country can afford it, hope that the cost will not run away, hope that the schedule will not slip.

Will dear Mr “drivel” Kenny and his counterpart Mr Kemm be the first to buy property next to any of our new Reactors for which he is the paid mouthpiece and propaganda expert? Answer….. NO

Will Mr Kenny and his counterpart Mr Kemm allow their families to live right next door to one of these new Reactors? Answer….. NO

These “people” are highly paid to spread lies and to make any truths about Reactors seem like conspiracy theories.

Mr Kenny, Mr Kemm and all their Nuclear counterparts are just far to eager to have a big cash cow that they can all feed off.

In my opinion, with so much uncertainty about the potential for developmental breakthroughs in all facets of future energy supply (nuclear, wind, solar), it is a huge risk to invest in fixed nuclear installations.

Far better would be to hedge our bets on the risk of investing into hugely expensive fixed-installations, and then having that technology dramatically superseded by some marvelous new technology that came out of nowhere, and was cheaper and more reliable.

Seems to me that the purchase (or lease) ship-based nuclear generators, which could be moored in the nearest suitable harbour, would be the wiser bet until better clarity on the competing technology solutions had settled out.

Marine-based nuclear installations would be relatively immune to seismic risk (certainly as we experience it in SA), and could be easily returned to the country of origin for re-fueling or repairs or upgrading.

And the best bit is that once their mission has been accomplished, they are either sold on to another country, or returned to the supplier – and we don’t have to decontaminate or close off acres of land at huge expense.

There is nothing new to this idea – Russia is very accomplished at making these floating nuclear plants.

It seems a no-brainer that such an alternative should – at the very least – be considered. In my opinion, any study that ignores this future-proofing option without giving proper engineering or economic rebuttal is seriously deficient, and has some explaining to do.

Perhaps the nuclear enthusiasts (Kenny? Kemm? Anybody??) can enlighten us?

End of comments.

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