In response to Dr Kemm: Nuclear? Not just yet… – Kevin Mileham

South Africa faces a pressing electricity crisis with real and immediate consequences. Loadshedding has become a common struggle, impacting businesses, education, and essential services. While acknowledging the potential of nuclear power, a recent podcast debate highlights the impracticality of a new nuclear build given South Africa’s historical challenges with large-scale projects. In light of financial constraints, technical uncertainties, and urgent energy needs, a pragmatic strategy advocates prioritising immediate solutions, such as incentivising rooftop solar, enhancing transmission infrastructure, and demanding transparent governance, before considering a nuclear new build.

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Nuclear? Not just yet…

By Kevin Mileham MP, DA Shadow Minister of Mineral Resources and Energy

There can be no denying that South Africa’s electricity crisis is real and immediate. It is not some vague, nebulous threat to be dealt with in the future. Its impacts on our economy and on our daily lives are felt in the ongoing loadshedding that is forcing businesses to close, learners to study in the dark, and hospitals, clinics and police stations to operate without power. In 2023, the worst year for loadshedding on record, we had more loadshedding hours than in the previous eight years combined.

In a recent Biznews podcast, Dr. Kelvin Kemm accused me of spreading anti-nuclear propaganda and not having the facts about nuclear correct. Let me be very clear: I am not opposed to nuclear power. I believe there is a place for it in South Africa’s energy mix. But from a purely pragmatic perspective, I cannot support a nuclear new build at this time. Here then, are the facts on which I base my opinion:

Nuclear builds typically take anywhere from 6 to 8 years to complete. The quickest build on record is that of Japan’s Kashiwazaki-Kariwa plant Unit 6, which was completed in 39 months (although designs, permits and authorizations were already in place). Many run much longer than the typical timeframe, or are abandoned halfway through. In the US alone, more than 100 nuclear power plant projects have been abandoned mid-construction.

In South Africa, we have seen the impact of labour issues, government interference, regulatory concerns, corruption and general mismanagement on large-scale builds, so you can add anything from 4 to 7 years to the typical timeline. One only has to consider Medupi and Kusile to recognize that we are not going to build a new nuclear reactor quickly or cheaply under the current government. So don’t expect a new nuclear plant much before 2040…

Despite the hype around Small Modular Reactors (SMRs), there are no commercially operational projects anywhere. The company that was furthest ahead, NuScale, has just cancelled its highly subsidised pilot project, as its cost projections rose from $58/Mwh to $89/Mwh and customers began withdrawing from the project. Kemm’s own company’s HTMR-100 is not yet even design approved.
It should be pointed out that Koeberg’s life extension project (for a further 20 years of operation, not 40, as stated by Kemm) is behind schedule, and there is very little clarity forthcoming from Eskom regarding the cost thereof. In addition, it seems increasingly likely that the licence to operate Koeberg will expire in July 2024, without a new licence in place.
South Africa’s debt to GDP ratio stood at 72.7% as at June 2023, with the national government debt standing at $266.9 billion. The overnight CAPEX cost, based on reasonable estimates (comparable to the recent Egyptian nuclear build) is $4500 per kWe. To build 2500MW would therefore cost in the region of $11.25 billion, excluding financing costs (and corruption, cost overruns etc.). This would add significantly to South Africa’s debt burden, and place increased pressure on the taxpayer.
Kemm implies that the cost of a nuclear new build in 2015 would have been offset by the money spent on renewable IPPs. But this is a false assertion. The capital cost of a nuclear new build would have been on the Eskom (i.e. government) balance sheet, while that of renewable IPPs is carried by the developer, and Eskom buys the electricity generated from them.
He further suggests that if we had built a nuclear power plant in 2015, we would not have loadshedding today.

Firstly, I doubt whether any nuclear procurement which commenced in 2015 would be adding any electricity to the grid for at least another few years. And, according to Kemm, there was no procurement deal on the table in 2015 anyway….

Secondly, he goes on to say that renewables are hardly contributing to SA’s electricity supply. This is untrue, as Eskom data from 17 December 2023 shows: overnight, renewables contributed 2088MW (in comparison to Koeberg, which was only generating 878MW).

Thirdly, he fails to acknowledge that the Renewable Energy Independent Power Producers Procurement Programme (REIPPPP) was effectively halted in 2015 by Brian Molefe and Eskom, who refused to sign power purchase agreements with the independent power producers. The programme was only restarted in 2022. It is widely agreed that this would have significantly reduced loadshedding, had it been allowed to proceed normally.

South Africa did indeed produce quality nuclear professionals for many years. Sadly, most of those have now left, and are working all over the world. A common refrain from Eskom is that Koeberg has difficulty retaining nuclear staff because they are being poached with higher salaries internationally. Much of the intellectual property we developed (in the Pebble Bed Modular Reactor, for example) is also gone.

You will note that I haven’t addressed the environmental aspects or the cost of generation of nuclear power at all. I have not done so, not because they are irrelevant, but rather because the issues I am raising are sufficient, in my opinion, to scupper any proposed nuclear deal at this time.

Our solutions to this crisis need to be prioritized to address the urgency of our need. A solution that is 5 or 10 years down the line needs to take a back seat to immediate actions that can restore some semblance of normality and security to our supply of electricity. It is in this context that the debate over a nuclear new build must be considered. So let’s sort out the immediate problem. We need more electricity right now. How can we achieve that?

Firstly, we need to incentivize rooftop solar, at both commercial/industrial and residential level. We need to make it easier and cheaper to import components and to install. We also need to accelerate the roll out of the various IPP procurement programmes to bring more generation to the grid as quickly as possible.

At the same time, we need to address our transmission infrastructure issues. At the end of 2022, Eskom indicated that it needed R180 billion over the next several years to upgrades its grid capacity (in particular, to build new transmission lines from where electricity can be generated to where it is needed, and to improve its ability to manage the inputs from various sources of electricity generation and storage). Since then, the projected grid costs have increased significantly on at least two occasions.

Lastly, we need a change in government, to one that is transparent and accountable. We need political leadership we can trust and an energy policy that addresses the situation we find ourselves in, not pie-in-the-sky vanity megaprojects, designed only to line the pockets of the corrupt and the connected.

Once all that’s in place, we can consider a nuclear new build.