Koeburg, currently South Africa's only nuclear power generation plant
In light of today's hotspots on the globe, I found the title of the article really intriguing.
I mean why, when the entire world is confused and perturbed (to say the least) with Russia's current activities in Ukraine, would South Africa cement such a deal? Putin's attitude can definitely be called a threat to any semblance of peace on our planet. So South Africa's making a deal with Russia, that would pour several billion rubles into Putin's war coffers....?
1000000000 South African Rand equals 3459652021.83 Russian Ruble.
Well, that's not the South African government, grounded in the moral consciousness of Nelson Mandela, Desmond Tutu, Ruth First, Joe Slovo, and Fatima Meer that I and millions of others hoped to see born from our decades of protest against the former apartheid system.
In the second piece, an editorial also from Mail & Guardian-Africa's Best Read discusses many of the controversies around Tina Joemat-Pettersson, the South African Energy Minister who signed the deal. The last editorial traces the deal to S A President Jacob Zuma's plans to use a fleet of nuclear power stations to increase the nation's ability to generate electricity.
lovu,
Kendke
SA, Russia Agree to $50-billion Nuclear Deal
AFP
Russia’s Rosatom State Atomic Energy Corporation said on Monday it will
provide up to eight nuclear reactors to South Africa by 2023, in a
$50-billion strategic partnership between the two countries.
The delivery of the reactors will enable the foundation of the first nuclear power plant based on Russian technology on the African continent, the Rosatom agency said in a statement.
Rosatom director general Sergey Kirienko estimated the value of the deal at around $50-billion, given that one reactor costs around $5 billion, according to the Itar-Tass news agency.
The inter-governmental agreement, signed in Vienna on the margins of the International Atomic Energy Agency conference, also calls for Russia to help build infrastructure in South Africa and to train African specialists at Russian universities.
Rosatom will create thousands of jobs in South Africa as part of the deal which will be worth “at least $10-billion” to local industry, Kirienko said in a statement.
South Africa’s Energy Minister Tina Joemat-Pettersson said the country sees nuclear power as “an important driver for the national economic growth”.“I am sure that cooperation with Russia will allow us to implement our ambitious plans for the creation by 2030 of 9.6 GW of new nuclear capacities based on modern and safe technologies,” she said in a statement.
Following this announcement, Lawson Naidoo, Executive Secretary of the Council for the Advancement of the South African Constitution (CASAC) today wrote to Joemat-Pettersson. He requested a copy of the Inter-Governmental Agreement on a Strategic Partnership and Co-operation in Nuclear Energy and Industry.
“CASAC is concerned whether proper and appropriate procurement and other approval processes have been followed in respect of this Agreement,” said the statement.
Eight reactors by 2035
South Africa, the continent’s most industrialised nation, currently has only one nuclear power plant. It is heavily dependent on coal for its energy supply and its electricity capacity is already near the maximum.
Government had announced at the end of last year that it was going to have up to eight new nuclear reactors online between 2023 and 2035, along with other energy sources, including shale gas and hydroelectric power from the future Inga III dam in the Democratic Republic of Congo.
South Africa’s nuclear power ambitions had attracted several proposals.
French group Areva, which built South Africa’s only nuclear plant at Koeberg, had proposed to provide the country with its new generation of EPR reactors.
Government had also solicited an offer from the US-Japanese group Westinghouse.
The new Russian reactors from Rosatom are expected to go online in 2023.
The delivery of the reactors will enable the foundation of the first nuclear power plant based on Russian technology on the African continent, the Rosatom agency said in a statement.
Rosatom director general Sergey Kirienko estimated the value of the deal at around $50-billion, given that one reactor costs around $5 billion, according to the Itar-Tass news agency.
The inter-governmental agreement, signed in Vienna on the margins of the International Atomic Energy Agency conference, also calls for Russia to help build infrastructure in South Africa and to train African specialists at Russian universities.
Rosatom will create thousands of jobs in South Africa as part of the deal which will be worth “at least $10-billion” to local industry, Kirienko said in a statement.
South Africa’s Energy Minister Tina Joemat-Pettersson said the country sees nuclear power as “an important driver for the national economic growth”.“I am sure that cooperation with Russia will allow us to implement our ambitious plans for the creation by 2030 of 9.6 GW of new nuclear capacities based on modern and safe technologies,” she said in a statement.
Following this announcement, Lawson Naidoo, Executive Secretary of the Council for the Advancement of the South African Constitution (CASAC) today wrote to Joemat-Pettersson. He requested a copy of the Inter-Governmental Agreement on a Strategic Partnership and Co-operation in Nuclear Energy and Industry.
“CASAC is concerned whether proper and appropriate procurement and other approval processes have been followed in respect of this Agreement,” said the statement.
Eight reactors by 2035
South Africa, the continent’s most industrialised nation, currently has only one nuclear power plant. It is heavily dependent on coal for its energy supply and its electricity capacity is already near the maximum.
Government had announced at the end of last year that it was going to have up to eight new nuclear reactors online between 2023 and 2035, along with other energy sources, including shale gas and hydroelectric power from the future Inga III dam in the Democratic Republic of Congo.
South Africa’s nuclear power ambitions had attracted several proposals.
French group Areva, which built South Africa’s only nuclear plant at Koeberg, had proposed to provide the country with its new generation of EPR reactors.
Government had also solicited an offer from the US-Japanese group Westinghouse.
The new Russian reactors from Rosatom are expected to go online in 2023.
Editorial: Brownie Points Add up for Tina
From May 30, 2014 editorial Tina Joemat-Pettersson's promotion to the position of minister of energy seemed a bizarre move.
“You
must be joking!” was the reported response of one senior academic to
the news that Tina Joemat-Pettersson had been elevated to the
heavyweight energy portfolio in Jacob Zuma’s new Cabinet.
It does, indeed, seem a bizarre move. Joemat-Pettersson’s performance as agriculture and fisheries minister did not earn her this promotion. She has been a regular source of embarrassment to the government. An adverse finding by public protector Thuli Madonsela on her “blank-cheque attitude towards public funds” on a trip to Sweden; and the protector’s call for disciplinary action on irregularities in the marine fisheries patrol tender.
Joemat-Pettersson’s response has been to challenge Madonsela in court.
Major questions have also been posed about her competence. One case is the chaotic failure of the allocation of line-fishing rights, pinned on the now-suspended acting fisheries boss, Desmond Stevens. But the debacle took place on her watch; Stevens says he did nothing without her blessing.
What Joemat-Pettersson does offer is unswerving loyalty to Number One. She is said to have unfettered access to Zuma, and to have earned brownie points for delivering the Northern Cape delegation to him at the ANC’s Mangaung conference. Her department’s plan to donate R800-million to Zuma’s private rural development initiative or project, Masibambisane, was also widely seen as a move to curry favour.
Yet Zuma is not simply advancing a crony, as the Democratic Alliance has charged. The energy ministry is responsible for guiding South Africa’s future energy mix, which includes giant projects and proposed projects in the renewables, hydroelectric, shale gas and nuclear fields. It also controls the strategic Central Energy Fund, which in turn holds controversy-plagued PetroSA, with oversight of mega-deals including acquiring foreign oil fields and possibly developing a new local refinery; the Strategic Fuel Fund Association, which trades oil and holds South Africa’s strategic fuel stocks; and the African Exploration Mining and Finance Corporation, the state’s mining vehicle.
The main driver of Zuma’s decision may be that, as he approaches the end of his political life, he is eyeing his legacy and wishing to polish his marble. He is likely to be looking to Joemat-Pettersson to expedite and ensure the desired outcomes in two huge legacy projects, the proposed R1-trillion nuclear fleet and the planned Inga III hydro development in the Democratic Republic of Congo. Zuma has invested huge political capital in these projects.
Joemat-Pettersson will not have full control of big energy procurement projects, which will also involve Eskom and the minerals and energy and public enterprises ministries. But she will be a critical – and most importantly, loyal – stakeholder in many of them.
Editorial: Nuclear Ambition Could Cripple SA
It does, indeed, seem a bizarre move. Joemat-Pettersson’s performance as agriculture and fisheries minister did not earn her this promotion. She has been a regular source of embarrassment to the government. An adverse finding by public protector Thuli Madonsela on her “blank-cheque attitude towards public funds” on a trip to Sweden; and the protector’s call for disciplinary action on irregularities in the marine fisheries patrol tender.
Joemat-Pettersson’s response has been to challenge Madonsela in court.
Major questions have also been posed about her competence. One case is the chaotic failure of the allocation of line-fishing rights, pinned on the now-suspended acting fisheries boss, Desmond Stevens. But the debacle took place on her watch; Stevens says he did nothing without her blessing.
What Joemat-Pettersson does offer is unswerving loyalty to Number One. She is said to have unfettered access to Zuma, and to have earned brownie points for delivering the Northern Cape delegation to him at the ANC’s Mangaung conference. Her department’s plan to donate R800-million to Zuma’s private rural development initiative or project, Masibambisane, was also widely seen as a move to curry favour.
Yet Zuma is not simply advancing a crony, as the Democratic Alliance has charged. The energy ministry is responsible for guiding South Africa’s future energy mix, which includes giant projects and proposed projects in the renewables, hydroelectric, shale gas and nuclear fields. It also controls the strategic Central Energy Fund, which in turn holds controversy-plagued PetroSA, with oversight of mega-deals including acquiring foreign oil fields and possibly developing a new local refinery; the Strategic Fuel Fund Association, which trades oil and holds South Africa’s strategic fuel stocks; and the African Exploration Mining and Finance Corporation, the state’s mining vehicle.
The main driver of Zuma’s decision may be that, as he approaches the end of his political life, he is eyeing his legacy and wishing to polish his marble. He is likely to be looking to Joemat-Pettersson to expedite and ensure the desired outcomes in two huge legacy projects, the proposed R1-trillion nuclear fleet and the planned Inga III hydro development in the Democratic Republic of Congo. Zuma has invested huge political capital in these projects.
Joemat-Pettersson will not have full control of big energy procurement projects, which will also involve Eskom and the minerals and energy and public enterprises ministries. But she will be a critical – and most importantly, loyal – stakeholder in many of them.
Editorial: Nuclear Ambition Could Cripple SA
Jacob Zuma's plan for a fleet of nuclear power stations has the
potential to impose a burden under which the South African economy could
buckle.
Editorial
Jacob Zuma and Vladimir Putin are both small men with large appetites. Whereas Putin’s bare-chested nationalism threatens to consume Ukraine piece by piece and has brought on Western economic sanctions, his quest for a place in history does not yet threaten the solvency of Mother Russia.
Zuma, of course, has Nkandla and excessive security, though galling, these will not break the national budget. Yet Zuma’s nuclear ambitions, which are becoming clearer and clearer, formed an obvious backdrop to his mysterious visit to Moscow last month and definitely have the potential to impose a burden under which the South African economy could buckle.
The warning signs are flashing that Zuma intends to push ahead with plans to purchase a fleet of nuclear power stations to generate 9 600MW of electricity. He included the promise in his opening address to Parliament in June, reiterating what he had said in his State of the Nation speech in February.
He brought in the pliant Tina Joemat-Pettersson to head the department of energy. Business Day confirmed this week that the government has decided to sidestep Eskom as the owner and operator of the nuclear fleet. Instead, the process will be led by the Cabinet’s energy security subcommittee – chaired by Zuma himself; the lead department appears to be Joemat-Pettersson’s.
This neatly sidesteps the technical and financial oversight Eskom might have exerted, neutralises a new and more sceptical minister of public enterprises, Lynne Brown, and sets the stage for an opaque “country-to-country” negotiation process.
Meanwhile, several sources have told the Mail & Guardian that Zuma regards the nuclear power project as part of his legacy. A businessperson with historically close ties to Zuma told the M&G that the matter has been decided: Russia will get the deal.
He noted that the Russians had taken assurances provided to them by previous energy minister Ben Martins as a solemn undertaking, and did not generally take kindly to such promises not being fulfilled.
It would be a mistake to write off the French company Areva, which is competing for the nuclear contract – and government officials have provided nods in the direction of having more than one supplier – but the identity of the eventual contractors is actually beside the point.
Since 2011, the M&G has been warning that the likely price tag will be in the region of R1?trillion – or R100?billion more than the country’s entire tax revenue for 2013-2014. The estimated cost of the Hinkley Point power station under construction in Britain is close to R150-billion per reactor, which would equate to R900-billion for the six units needed to deliver 9?600MW of power to South Africa.
Neither Eskom nor, indeed, South Africa can afford to take on this much debt. Eskom is already struggling to avoid having its debt rating downgraded to “junk” status.
On Sunday the government moved to prop up the parastatal’s balance sheet by announcing an unspecified capital injection and a guarantee for some R250-billion in Eskom debt, meaning the taxpayer will stand as backstop for the increased borrowing needed to get Eskom out of its current hole. In any case, lending institutions by and large now refuse to finance nuclear projects because of the very high costs, long repayment periods and significant risks of cost and time overruns.
How, then, is the Zuma administration planning to fund this nuclear extravaganza? Through vendor financing, supposedly.
In other words, the Russian or French governments would put up the money. The catch is that payment would then be secured through a cast-iron commitment from Eskom to purchase power for 15 to 20 years at a price that would secure the investment, necessarily at a much higher tariff than currently applies. At Hinkley Point, for instance, the guaranteed price is about R1.70 per kilowatt hour, or more than double Eskom’s current average electricity tariff.
South African consumers and industry are already groaning under the weight of tariff increases driven by the need to fund Eskom’s existing build programme – with more hikes in the pipeline because of the failure to deliver the new Medupi and Kusile coal-fired stations on time and on budget. At the start of construction, Eskom estimated Medupi would cost R34-billion. Reports now suggest the latest estimates are that it will cost more than R100-billion.
Nuclear power plants are notoriously more complicated and prone to cost and time overruns. Trying to transfer all that risk to a vendor is futile. As Medupi has shown, what is written in an initial contract may be worthless – and very large strategic projects offer relatively little leverage for the buyer to enforce terms.
Indeed, vendor financing offers a perverse incentive to the project company to cut corners – an especially dangerous scenario for nuclear power – because cost and time overruns can be financially catastrophic.
What, then, is to be done?
Renewable energy sources, including solar, wind and hydro – backed by the baseload capacity coming on stream from Medupi and Kusile – offer the potential for incremental solutions that distribute risk.
Simply put, South Africa must repudiate the siren song of ego-driven mega-projects that have the potential to bankrupt us.
Editorial
Jacob Zuma and Vladimir Putin are both small men with large appetites. Whereas Putin’s bare-chested nationalism threatens to consume Ukraine piece by piece and has brought on Western economic sanctions, his quest for a place in history does not yet threaten the solvency of Mother Russia.
Zuma, of course, has Nkandla and excessive security, though galling, these will not break the national budget. Yet Zuma’s nuclear ambitions, which are becoming clearer and clearer, formed an obvious backdrop to his mysterious visit to Moscow last month and definitely have the potential to impose a burden under which the South African economy could buckle.
The warning signs are flashing that Zuma intends to push ahead with plans to purchase a fleet of nuclear power stations to generate 9 600MW of electricity. He included the promise in his opening address to Parliament in June, reiterating what he had said in his State of the Nation speech in February.
He brought in the pliant Tina Joemat-Pettersson to head the department of energy. Business Day confirmed this week that the government has decided to sidestep Eskom as the owner and operator of the nuclear fleet. Instead, the process will be led by the Cabinet’s energy security subcommittee – chaired by Zuma himself; the lead department appears to be Joemat-Pettersson’s.
This neatly sidesteps the technical and financial oversight Eskom might have exerted, neutralises a new and more sceptical minister of public enterprises, Lynne Brown, and sets the stage for an opaque “country-to-country” negotiation process.
Meanwhile, several sources have told the Mail & Guardian that Zuma regards the nuclear power project as part of his legacy. A businessperson with historically close ties to Zuma told the M&G that the matter has been decided: Russia will get the deal.
He noted that the Russians had taken assurances provided to them by previous energy minister Ben Martins as a solemn undertaking, and did not generally take kindly to such promises not being fulfilled.
It would be a mistake to write off the French company Areva, which is competing for the nuclear contract – and government officials have provided nods in the direction of having more than one supplier – but the identity of the eventual contractors is actually beside the point.
Since 2011, the M&G has been warning that the likely price tag will be in the region of R1?trillion – or R100?billion more than the country’s entire tax revenue for 2013-2014. The estimated cost of the Hinkley Point power station under construction in Britain is close to R150-billion per reactor, which would equate to R900-billion for the six units needed to deliver 9?600MW of power to South Africa.
Neither Eskom nor, indeed, South Africa can afford to take on this much debt. Eskom is already struggling to avoid having its debt rating downgraded to “junk” status.
On Sunday the government moved to prop up the parastatal’s balance sheet by announcing an unspecified capital injection and a guarantee for some R250-billion in Eskom debt, meaning the taxpayer will stand as backstop for the increased borrowing needed to get Eskom out of its current hole. In any case, lending institutions by and large now refuse to finance nuclear projects because of the very high costs, long repayment periods and significant risks of cost and time overruns.
How, then, is the Zuma administration planning to fund this nuclear extravaganza? Through vendor financing, supposedly.
In other words, the Russian or French governments would put up the money. The catch is that payment would then be secured through a cast-iron commitment from Eskom to purchase power for 15 to 20 years at a price that would secure the investment, necessarily at a much higher tariff than currently applies. At Hinkley Point, for instance, the guaranteed price is about R1.70 per kilowatt hour, or more than double Eskom’s current average electricity tariff.
South African consumers and industry are already groaning under the weight of tariff increases driven by the need to fund Eskom’s existing build programme – with more hikes in the pipeline because of the failure to deliver the new Medupi and Kusile coal-fired stations on time and on budget. At the start of construction, Eskom estimated Medupi would cost R34-billion. Reports now suggest the latest estimates are that it will cost more than R100-billion.
Nuclear power plants are notoriously more complicated and prone to cost and time overruns. Trying to transfer all that risk to a vendor is futile. As Medupi has shown, what is written in an initial contract may be worthless – and very large strategic projects offer relatively little leverage for the buyer to enforce terms.
Indeed, vendor financing offers a perverse incentive to the project company to cut corners – an especially dangerous scenario for nuclear power – because cost and time overruns can be financially catastrophic.
What, then, is to be done?
Renewable energy sources, including solar, wind and hydro – backed by the baseload capacity coming on stream from Medupi and Kusile – offer the potential for incremental solutions that distribute risk.
Simply put, South Africa must repudiate the siren song of ego-driven mega-projects that have the potential to bankrupt us.
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