How to waste other people’s money
South Africa is going to build nuclear power plants – again. This morning, while trawling the web for an offensive story to get Stokes’ Stage underway, I stumbled upon a Reuters’ press release in which energy minister Dipuo Peters admitted signing off on
You need quite a long memory to track government’s nuclear energy policy. Our nuclear plans are akin to a comet in deep-space orbit – they are visible to the common citizen for a fleeting moment before they disappear into the ether again... I’m not going to get into the debate over whether or not we need nuclear power stations – there are plenty of ‘greens’ to take up that fight – but I would like to take a stab at government for the ‘couldn’t care less’ manner in which they squander taxpayers’ money.
Winding back the clock to late 2007
We’ll begin today’s tirade by winding the clocks back to late 2007. Back then our state-owned electricity supplier Eskom set 30 June 2015 as the date by which it hoped to have the first of five new nuclear reactors up and running. And the 2015 ‘power up’ date was no thumb suck. The utility company had already identified sites, completed certain of the required environmental income studies and approached international companies to provide quotes. At the time five sites had been selected – including Oyster Bay, Pearly Beach, Bantamsklip, the current Koeberg site, and Kleinzee.
In fact, by September 2007 Eskom had short-listed French nuclear company Areva and international nuclear-technology group Westinghouse Electric Company as bidders. The idea was to sign new-build contracts by the end of 2008 – at a likely cost of between R100 and R120 billion per plant. One has to love how government and state-backed utility leadership ‘round off’ numbers when talking about spending our contribution to the state coffers! A year down the line, when the utility company had to put pen to paper, the global economic outlook was so cloudy they chose not to go ahead with the plan. Eskom called off the deal with the EPR (Areva) and N-Powerment (Westinghouse) consortiums because of the “magnitude of investment” required. And that means today – five years after deciding to build five nuclear power stations and spending untold millions on a lengthy bidding and selection process – we are back at square one.
Burning billions more on the pebble bed debacle
The ‘on again / off again’ nuclear power plant debate isn’t the only confusing signal being sent out by the energy ministry. While government considered building new plants they were funding another project known as the Pebble Bed Modular Reactor (PBMR). This venture was set up in 1999 and burned through no less than R9 billion over the next 11-years! The idea was to design and build a test plant of a mini nuclear reactor based on ‘pebble bed’ technology. Funding was provided by a number of project participants including Eskom, the Industrial Development Corporation and Westinghouse. By mid-July 2010 government finally cried “enough”! Then minister of public enterprises Barbara Hogan was fairly brutal in a letter to the National Union of Mineworkers at the time: “The minister of finance has clearly stated that there will be no further funding for [PBMR], and I would like to reiterate that this position has not changed…”
The PBMR project was a bit of a political catch-22. There was no way government could pour more funds into a venture that was showing such limited progress – but at the same time, why pull the plug on the country’s only nuclear skills pool if nuclear was still on the agenda? As it turns out government only partially pulled the plug. PBMR is still running with a skeleton staff, to ‘look after’ intellectual capital and allow for certain licensing processes to wind down. And rumour has it that despite agreements to retain only a core staff there are still dozens of contractors on the PBMR payroll, with executives jetting around the globe first class in the style they were previously accustomed to!
Whatever the case, all South Africa has to show for this R9 billion ‘investment’ is a pool of staff occupying an office somewhere in Centurion, and a few expensive components for a demonstration plant – including a new R300 million ‘pressure reactor vessel’ – reportedly gathering dust in a warehouse in Saldanha Bay.
Chart a course and stay with it!
South Africa has to address its power problems. A sensible solution would be for the department of energy to sit down with affected stakeholders and ‘once and for always’ decide on how the country will address its future power needs. It makes no sense to gamble with the country’s energy security needs by making continuous about turns, dummy passes and false starts in this expensive game.
Editor’s thoughts: There are a number of local industries that have suffered for lack of clear political leadership. In many cases the difficulty is exacerbated by a blurring of lines between private and public sector interests. The telecoms industry and power sector are two that immediately come to mind. Are you confident in government’s ability to plan for South Africa’s energy needs? Add your comment below, or send it to gareth@fanews.co.za
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