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How South Africa should select a nuclear power plant
The Selection Criteria
In his address to the University of Witwatersrand’s Business School on August 17, 2023, Minister of Mineral Resources and Energy, Gwede Mantashe, reaffirmed that Nuclear Energy will be part of South Africa’s mixed energy strategy. His remarks agree with the 2019 Integrated Resource Plan (IRP) that specifies an additional 2.5 GW of nuclear power “at a pace and scale that the country can afford, because it is a no-regret option”.
The 2.5GW of nuclear power should ideally be proportioned between a traditional pressure water reactor (PWR) and Small Modular Reactors (SMRs) as they become available within the next decade.
A new PWR will provide affordable baseload electricity and desalinated water to our coastal cities. Two sites have already been identified for construction, Thyspunt in the Eastern Cape and Duynefontein in the Western Cape. Both locations are ideal for a NPP as grid integration costs, freshwater usage, and logistics costs are minimal.
The Nuclear Power Plant (NPP) process starts when the Nuclear Energy Corporation of South Africa (NECSA) is instructed to send out a Request for Proposal (RFP) so NPP options and a vendor can be identified. There are currently 5 countries (France, America, South Korea, Russia, and China) that are in the export market and vendor selection requires a balance between economic, geopolitical, and internal political trade-offs. In 2019 the UK Government and the Energy Technologies Institute released a report titled The Cost Drivers of Nuclear Power that can serve as guidance for the minister’s decision as well as for the public to be informed.
Below is my advice of what should go into South Africa’s decision matrix. They are guidelines for NPP selection, and they will have to be traded of against each other.
· Cost and Affordability: What is the cost of the NPP going to do to South Africa’s fiscus in Net Present Value and does the Minister of Finance agree that we can afford it?
· Vendor Financing: Is the financing of the NPP split between the vendor and host country? (Generally speaking, the vendor brings 85% of the capital).
· Risk: In the case of overruns will the vendor country or the South Africa’s fiscus cover the construction risk?
· Scares Skill Retention: Does the NPP come with a strategy to bring back the numerous South Africans with scarce skills back home such as those who were involved with the Barakah Nuclear Plant, El Dabaa, Hinkley Point C, ITER or for SMR startups like X-Energy, Kairos or Seaborg?
· Desalination: Is there a provision for desalination (as is the case with Koeberg) so that our inland rivers can recover? (a 2GW nuclear power plant has 4GW of rejected thermal energy that can be used for this purpose).
· Development: Will the Western or Eastern Cape benefit the most from the investment in terms of development?
· Intellectual Support: Is there a university located nearby with a physics or engineering department and tradition that isn’t hostile to nuclear energy?
· Diplomacy: Is the vendor involved in a current geopolitical conflict with implications for South Africa’s Trade Agreements and has the Department of International Relations and Cooperation been approached?
· Nuclear Non-Proliferation: Has the vendor country taken steps to advance South Africa’s goals of Nuclear Nonproliferation?
· Treaty of Pelindaba: Is the vendor undermining Africa’s ambition of a Nuclear Weapons Free Zone by stationing nuclear weapons in another African country and preventing the right of return of its indigenous population?
· Design Maturity: Is the NPP based on an approved detailed design and has it been licensed by a regulator elsewhere?
· Recent Experience: Is the vendor currently building a NPP or have they recently completed a project?
· Track Record: Has the vendor completed a similar nuclear project reasonably on time and on budget in the last few years?
· Domestic Market: Does the vendor have multiple plants of the same type in his own domestic markets in the case that spare parts are needed?
· Export Market: Does the vendor have experience with an export market and preferably one that crosses the sea lanes?
· Intellectual Property: Does the vendor have full control of all Intellectual Property that is used in the NPP, to avoid political and diplomatic conflicts?
· NGO: Is there a legal and national security strategy in place to battle the NGO industrial complex so they cannot intentionally to delay the project?
The Department of Energy should give the go-ahead for the RFP, because there is public support for a new NPP from the voters of all major political party as recent poll from the Social Research Foundation confirmed.
A PWR is turnkey technology and as IRP2019 rightfully states, Nuclear Power is a no-regret strategy for South Africa.
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