Why the hurry with nuclear power?

BusinessDay, Energy Research Centre, UCT, 12 December, 2017.

The economic benefits of a nuclear fleet are no better than a flexible build plan, even in a future where we assumed nuclear is cheap


Energy Minister David Mahlobo reportedly wants to finalise quickly the latest iteration of our electricity plan in support of new nuclear power. The minister claims that “there’s no discussion about the need, the need is there” for nuclear power.

Yet research that we have undertaken at the Energy Research Centre supports neither a need for, nor benefits of, forcing a large nuclear fleet into our electricity system.

Modelling of all available electricity generation options continues to show that nuclear power is not the least-cost solution. Nor does the country have the ability to finance the investments required for a 9.6GW fleet of large reactors. SA currently faces an excess of capacity and will not need this power in the short to medium term.

The latest modelling shows nuclear only coming into the mix around 2040. This is a finding consistent with earlier work the centre undertook for the National Planning Commission in 2013. Current research together with economic modellers also suggests a wait-and-see approach. The rush to complete the Integrated Resource Plan (IRP) and increase the share of nuclear is suboptimal for the electricity system and for the South African economy. There is no urgency about the decision around nuclear.

When would we need nuclear power? Nuclear plants take 10 years to build and will run for decades after, but it is virtually impossible to predict demand half a century into the future. Electricity demand projections have consistently been higher than actual growth, when evaluated ex post. Smaller nuclear reactors could in future track demand more closely than those being considered for the fleet.

In the past few years, electricity demand has flattened and is even declining. The global financial crisis reduced economic demand, which is a key driver assumed in modelling electricity demand. The period of load-shedding that followed in SA further kept electricity demand low. So SA has time to carefully consider future investment needs as no new generation is needed before the late 2020s.

Does SA “need” nuclear when it is not the lowest-cost option for the country? Good policy should be informed by sound evidence. Here’s an explanation on how we cost nuclear power, in research terms.

Much of the public debate centres on “overnight capital costs”, which are the costs of construction, excluding inflation or interest. There are divergent figures on the “overnight costs” of nuclear, dependent on certain assumptions, technology choices and country of construction.

The IRP 2013 used a range of about $5,000/kW–$7,000/kW. This range was found to be consistent with literature for the types of plants SA would be considering, and was used in studies by the centre on nuclear power and bounding uncertainty, including those on costs. A more recent review by three research groups of overnight costs suggests that the upper range could be as high as $8,500/kW.

The “overnight cost” is not a very good basis for comparing the costs of electricity plant since it excludes other key components — fuel and operating costs, aggregate availability, lifetime, interest during construction, borrowing rates, system integration aspects and risk. Another measure of cost is the “levelised cost of energy”. This cost is expressed in cents per kWh, and takes into account the overnight costs and the other aspects listed above except for the system integration aspects. Risk is taken into account to a certain extent through the discount rate, but this does not fully account for the risk of over-build.

In SA, renewable energy prices have fallen rapidly, echoing global cost reduction trends. Actual average tariffs from solar photovoltaic (PV) and wind electricity generation decreased from R3.65/kWh and R1.51/kWh in 2011 respectively to R0.62/kWh in 2015, making it cheaper than electricity produced from a new-build coal-fired power plant (R1.03/kWh) as well as nuclear (R1.09/kWh), the latter figures being those published by the Department of Energy in 2016.

The measure of levelised costs can be useful for comparing the overall observed and expected energy cost from different technologies, but can be misleading when comparing technologies with very different characteristics. For example, non-dispatchable solar PV and wind do not provide the same value to the system as dispatchable generators. The actual value (and costs) to the energy system of any technology is a complex and dynamic combination of all prospective new and existing capacity and their overall ability to meet demand. Both demand and supply options change over time — over a day, week, month, year — as the structure of the overall power system evolves.

It is important to the operation of the system when supply and demand-side options produce and whether this is at the same time as demand. To fully understand the implications of the advances in energy technologies on future electricity generation in SA, a fully integrated energy systems assessment is required. An energy system model is also useful to compare different scenarios.

Our research has compared the economic effects of a nuclear fleet against a flexible, least-cost build plan. We found that the economic benefits of a nuclear fleet are no better than a flexible build plan, even in a future where we assumed nuclear is cheap. Given that the result depends on many inputs, the centre’s researchers further analysed many variants of these two scenarios and found that nuclear is not the least-cost option. A forced nuclear scenario results in electricity prices that are higher and this “would have negative impacts on growth, employment and welfare in SA”. In plain language, one has to cherry-pick a future in which nuclear power is affordable.

In a world where there is uncertainty about future demand, future technology costs and capabilities, future grids with distributed generation and storage, committing ourselves to a large investment far in advance is not prudent.

So nuclear power is not the most affordable option, by overnight costs, levelised costs or by running an energy system model. But there are factors other than cost to consider. SA would do well to invest in technologies that deliver what we really need, especially employment.

The localisation and respective job-creation potential of a nuclear fleet is low compared with other technologies, as most of the local jobs will be temporary construction jobs and a couple of thousand permanent jobs in operations and maintenance, depending on the number of nuclear plants being built. Pushing up the local content requirements for the nuclear programme is another way of increasing the cost to levels even unknown to the industry.

Over- and under-supply are both costly to the economy, and we have a poor track record in avoiding either. The “fleet” approach taken to nuclear in IRP 2010 makes the investment particularly large. A 9.6GW fleet has been estimated to cost between R322bn and R1.4-trillion. These estimates do not include cost overruns, which are common on mega-projects. Many studies do not include interest during construction, which due to long lead times of nuclear and depending on interest rates, can increase the capital cost of projects by 40%-50%.

The government is already committed to providing a R350bn debt guarantee to Eskom, and we have an unaffordable debt-to-GDP ratio (currently at 51.7%). Another R1.4-trillion in guarantees or sovereign debt would more than double our national debt, which is currently about R870bn. The Treasury is seeking to reduce debt to keep the interest paid on our national debt under control. Increasing that debt in the current economic climate seems unwise.

• Caetano, Merven and Winkler work at the University of Cape Town’s Energy Research Centre. They write in their personal capacities.

Here is the link to the article

Does hope inspire more action on climate change than fear? We don’t know.

David Roberts, Vox.com, 7 December, 2017

This is something completely different, but well worth reading!

On climate change communications, the science really isn’t settled.


NEWS RELEASE                                                                                                                    



 Today, the Southern African Faith Communities’ Environment Institute (SAFCEI) and the Campaign for a Just Energy Future (CJEF) joined a number of civil society organisations to discuss the way forward, following the deliberate exclusion of civil society in the Minister of Energy’s rushed energy indaba, planned for tomorrow and Friday (7-8 December).

According to SAFCEI, the short notice indaba does not fulfil the Western Cape High Court’s ruling regarding meaningful participation in the nuclear court case – since it was announced just more than two weeks ago, it was only accessible by invitation, and therefore not open to the public or various concerned civil society organisations.

In November, Energy Minister David Mahlobo told parliament that the energy plan will have nuclear energy even though the draft released for comment in 2016 found no need for nuclear energy.

There is overwhelming evidence that it is too costly and also unnecessary. In addition to this, a study published by Eskom further reinforces that there is no rational case to support nuclear.

According to Pooven Moodley, Campaign Coordinator for the Campaign for a Just Energy Future, the number and nature of the organisations excluded from the invite list is serious cause for alarm and feels like a manoeuvre to wilfully exclude those in civil society who are working on energy.

“While the Minister of Finance says that SA will take on nuclear at a rate and pace the country can afford, he is unwavering in his desire to keep it in the plan. It is unclear whether Minister Mahlobo’s intentions are questionable and linked to #StateCapture claims or whether his insistence on nuclear has to do with his naivety in the role of Energy Minister,” says Moodley.

Liz McDaid, SAFCEI’s energy expert says, “SAFCEI was NOT invited, tried to register and at the last minute, after the minister expressly told civil society organisations that the meeting was not for civil society and was by invitation only, suddenly responds saying we can come. This makes no sense, and it seems that the minister is playing games.”

We are serious about engaging with lawful processes as set out in the April 2017 court judgement, which ruled the nuclear deal unlawful and unconstitutional, and ordered government to follow a process of public consultation over any proposed nuclear deal. This indaba is definitely not part of any real consultation.

Lydia Mogano, SAFCEI’s Regional Coordinator in Pretoria says, “The upcoming energy indaba is an epitome of how our government continues to undermine the voices, rights and values of its citizens, and this is disappointing.”

Right2Know Campaign’s Vainola Makan says that R2K is appalled by the closed-door approach to the energy indaba and the fact that environmental and social justice organisations have been excluded.

 Says Makan, “We demand full transparency and full consultation, not a secretive process like this”

 In October, SAFCEI and 40 other organisations – under the banner of the National Campaign for a Just Energy Future (CJEF) – sent a letter to the PCE chair, Fikile Majola, demanding that Parliament also have hearings on energy justice.

“We approached the chairperson to ask what happened to our letter to Parliament, but he did not even have the courtesy to table the letter to the Committee. We asked for the chance for civil society to put our views before the end of November. However, with Parliament has just about closed, the Chair has said that he might have public hearings next year. Sadly, Parliament has failed the people of South Africa in this matter,” said Zainab Adams, Outreach Coordinator at SAFCEI. 

Shu-Aib Appleby from the Muslim Judicial Council – a member organisation of SAFCEI – says, “As faith leaders, our appeal to our faith-conscious and strongly grounded political leadership is that they uphold their oaths of office with the truest of commitments. This means stopping any process to conclude the nuclear deal until there is due public participation, as prescribed by the Constitution and Parliamentary procedure and to make all information available to its constituency, the South African Nation. We also call upon the government to publish its reports on any steps taken on the Integrated Resource Plan (IRP) and procurement. We have the right to know.”

Andy Pienaar, Coordinator of the Namaqualand Action Group for Environmental Justice and representing a community affected by nuclear waste in the Northern Cape, and who were also not invited to the indaba adds, “We are tired of the empty promises. The chairperson promised, when we came to parliament last year, to have public hearings. But, it is now a year later and no public engagement has happened, yet now they hold indabas without us. The PCE and its chairperson have failed us.”

“How can Parliament hold the Executive to account if it is not prepared to listen to civil society? We have so much valuable information which can be used to challenge the Executive,” says Pienaar.


Issued by Natasha Adonis, on behalf of SAFCEI. For more information, contact Natasha on 0797-999-654 or adonisnatasha@yahoo.co.uk.

Recent engagements between Minister of Energy Mahlobo and civil society organisations

Joint Media Release: Recent engagements between Minister of Energy Mahlobo and civil society organisations

7 December 2017

Below we set out key events in recent engagements between Minister of Energy David Mahlobo and civil society organisations around the Integrated Resource Plan for Electricity and the Energy Indaba scheduled for 7-8 December 2017.

On 10 November 2017, Greenpeace Africa, together with the Life After Coal Campaign (made up of groundWork, Earthlife Africa Johannesburg, and the Centre for Environmental Rights (CER)), sent a letter to the newly-appointed Minister of Energy David Mahlobo to congratulate him on his appointment, to highlight numerous concerns and questions in relation to South Africa’s future energy plans, and to request a meeting with him. No response was received.

On 28 November 2017, a larger number of civil society organisations sent a joint open letter to Minister Mahlobo raising concerns around the planned Energy Indaba, the inadequate consultation around the Integrated Resource Plan for Electricity (IRP), and the Integrated Energy Plan (IEP).

On 29 November 2017, the Minister contacted the CER and invited the organisations who had sent the 10 November letter to a meeting on 5 December 2017. During that call, the Minister indicated that the organisations that had sent the joint open letter had incorrectly assumed that they had been invited to the Energy Indaba convened for 7-8 December 2017.

On 5 December 2017, 6 representatives of CER, groundWork, Earthlife Africa Johannesburg and Greenpeace Africa attended a meeting with Minister Mahlobo and 5 representatives from the Department of Energy, held in Johannesburg. The contents of this meeting are recorded in the attached letter sent to the Ministry today.

Importantly, at the meeting on 5 December 2017, the Minister made it clear that:

  1. there would be no further public participation on the contents of the IRP before its approval by Cabinet, and its subsequent publication; and
  2. the Energy Indaba was not intended to address the IRP in any way, shape or form – instead it was for business, labour, and government to discuss ways to reinvigorate the energy sector in order to stimulate economic growth.

The organisations who attended the meeting with the Minister have reported fully on the contents of the meeting to a broad coalition of civil society and community-based organisations working on energy issues. A number of these organisations attended a meeting on 6 December 2017 to discuss recent events, the state of the IRP, and the Energy Indaba.

At this stage, we know that:

  1. very few civil society organisations were invited to the Indaba, and people from affected communities and members of the public have not been involved in this process at all;
  2. a number of civil society organisations who tried to register for the Indaba did not have their registration confirmed;
  3. others who tried to register by email had their emails returned as undelivered, presumably because the email address for registrations was full;
  4. the evening before the Indaba, 6 December 2017, representatives of at least 2 civil society organisations were invited to the Indaba, although the invitation indicates that a response to the invitation was required by 4 December 2017;
  5. the leaked, and allegedly confidential draft agenda for the Indaba does not address any of the issues raised repeatedly by civil society organisations as serious concerns around South Africa’s electricity plans – including nuclear, coal and renewables, and the IRP;
  6. the final agenda will only be made available to delegates on registration at the Indaba on 7 December 2017; and
  7. the media advisory circulated to certain members of the media on 4 December appears to have been since amended. Whereas the initial advisory stated that “the Indaba will be attended by all energy stakeholders including academics, and civil society,” the amended version no longer states that civil society will be attending.  The initial advisory indicated that the Indaba’s purpose is to “stimulate a national conversation for South Africans to find solutions towards a sustainable energy sector”. By contrast, the amended version indicates that the Indaba
    “brings together various role players in reigniting economic growth amid the challenges of growth”.

The Minister has failed to respond to our joint open letter of 28 November 2017. In particular, the Minister has failed to provide the long list of information requested on numerous occasions by organisations – and formally from the Department through the Promotion of Access to Information Act – included in the list below.

The undersigned civil society organisations wish to make it clear that we regard the consultation around the IRP as inadequate, and susceptible to legal challenge. Furthermore, we do not regard the Energy Indaba as a legitimate process for the discussion of South Africa’s energy future – a discussion which should include members of civil society, particularly members of communities most impacted by the pollution and harmful effects of electricity generation; and labour.

The serious concerns that we have raised with the Minister remain, even after the meeting that was scheduled on 5 December 2017. We now await the publication of the IRP, following which we will decide the way forward, which may include further litigation.







Notes on a meeting with Mr David Mahlobo, Minister of Energy on % December, 2017


These four NGOs had a meeting with the Minister of Energy on 5 December, 2017. The meeting was granted at very short notice, so only these four interested parties were able to attend.

Here are the meeting notes sent to the Minister:

The Honourable Mr David Mahlobo, MP Minister of Energy

By email: zinhle.mbhele@energy.gov.za; deidre.nkopane@energy.gov.za david.mahlobo@energy.gov.za

Copies to: Mr Vusimusi Sekgobela Mr Thami Mthembu Chief of Staff Stakeholder Relations Manager Department of Energy Department of Energy By email: vusimuzi.sekgobela@energy.gov.za

By email: thami.mthembu@energy.gov.za Ms Nomvula Khalo Ministry: Media Liaison Officer Department of Energy By email: nomvula.khalo@energy.gov.za

7 December 2017

Dear Minister


1. We address you on behalf of the Life After Coal Campaign (consisting of the Centre for Environmental Rights, Earthlife Africa Johannesburg, groundWork), and Greenpeace Africa. We write to thank you for our meeting on 5 December 2017 and briefly to record some of the key points from our discussions.

Integrated Resource Plan for Electricity (IRP)

2. You indicated in the meeting that you regarded the IRP not as a policy, but rather an operational plan, related to implementing already existing policy. You indicated that you view the National Energy Act of 2008 as the applicable policy.

3. You advised us that “everything” had been put on hold pending the finalisation of the IRP. We understood this to mean that all energy procurement processes were on hold. However, you indicated that a decision had been made on renewable energy independent power producers bid windows 3.5 and 4 and this would be announced by the President this Thursday, 7 December 2017 (today).

4. You advised us that all public participation on the IRP had been concluded and that the IRP had been sent to Cabinet for approval, which you expected by the end of the year; whereafter it would be published for implementation. We confirm, as we have recorded in previous correspondence, that there was only public participation on the base-case and assumptions, and not on the various scenarios or the policy-adjusted IRP, and that we received no responses to any submissions made on the IRP, or to requests for any documents requested for purposes of commenting on the IRP. We also indicated to you at the meeting that the public participation for this IRP has differed from the process followed for the IRP2010, when there were several opportunities for interested and affected parties to give input. In response, you advised that the IRP2010 was about setting a baseline, and the same process was not necessary for the IRP2016, on which, in your view, there had been adequate public participation. Although we were not able to elaborate further on this in the meeting, we confirm that we believe that the level of consultation on the IRP2010 created a precedent in terms of what constitutes adequate public participation, and that we believe it is inadequate to only seek input from the public on the most initial of the models and scenarios. Moreover, such consultation as has taken place was only conducted in bigger urban centres to the exclusion of many communities directly affected by the IRP, such as mining-affected communities, and communities affected by air and water pollution from coal-fired power stations.

5. You advised us that all energy sources will be in the IRP (we take this to mean the sources listed in the IRP2010, namely natural gas, hydro, landfill, pumped storage, coal, wind, solar PV, CSP, nuclear, and diesel), but that the allocation of these sources would be proportionally reduced in the IRP, because of reduced demand for electricity. You indicated that there would be “devastating” impacts if any energy source were excluded; that the game needed to be fair, with a “level playing field”, and you were the referee. You said that the “mantra” was that all energy sources must comply with pace, scale, affordability, and environmental requirements. Energy policy is, you advised, based on what we have available to us, and policy could not be changed. Although we were not able to respond to this in the meeting, the evidence is clear that the socio-economic and environmental impacts of some energy sources (coal, nuclear and gas) are significantly higher than others, and after decades of subsidies for coal and nuclear, the playing field is anything but level, particularly in terms of renewable energy.

6. In relation to coal in particular, you advised that coal should not be shut down entirely, but that it should rather use technology like carbon capture and storage (CCS) to ensure compliance with environmental standards. Although we were not given the opportunity to raise this at the meeting with you, we must point out that thus far major polluters such as Eskom and Sasol have strongly resisted complying with air quality standards, and that CCS has, to date, not been feasibly implemented, nor is it cost-effective. The South African Centre for Carbon Capture and Storage (SACCS), a sub-body under the South African National Energy Development Institute (SANEDI) has, to date, not been able to identify a possible suitable site even to pilot the storage of carbon dioxide.

7. In relation to nuclear energy, you indicated that this was the “best option”, but that nuclear waste had to be managed. You indicated that where other countries have had nuclear accidents, there was evidence as to why this had happened. Again, although we were not given the opportunity to respond to this at the meeting, we believe that one cannot underestimate the risk of a nuclear accident in South Africa, and its potentially catastrophic social and economic impacts. The potential for human error combined with nuclear technology means that nuclear is never safe.

8. You commented that, for renewable energy, it is a technology type that is variable – there is not always enough sun and wind and that dust particles in wind – and the wind blowing at the wrong speed – could destroy the turbines. Again, although we were not given the opportunity to respond to this at the meeting, based on extensive scientific research and modelling undertaken by reputable research institutions, we do not agree with this assessment.

9. On modelling, you said that you are advised by experts, and that we NGOs were not experts in modelling, and that we were “over-reaching” to seek to interrogate the modelling. Although we were not given the opportunity to respond to this at the meeting, we confirm that multiple experts1 1 https://www.csir.co.za/sites/default/files/Documents/20170331CSIR_EC_DOE.pdf. The CSIR has since updated its alternative IRP. A presentation on the update can be accessed at http://rodoyo.com/gtac/GTAC%20in%20Pretoria%20-%20Energy%20Planning%20-%20TBN%20- had confirmed that no new nuclear or coal power was required. Other research shows: that Eskom should accelerate the decommissioning of 3 of its older coal-fired power stations (Hendrina, Grootvlei and Komati) and curtail the completion of Kusile units 5 and 6 in order to save costs; these interventions can be achieved without affecting security of supply; and that these interventions could save Eskom up to R17 billion.

Energy Indaba, 7-8 December 2017

10.You advised that the Energy Indaba was a meeting for labour, business, and government to discuss how to reinvigorate the struggling economy and address unemployment. At this meeting, business and bankers would sit together and determine how to ensure investment to promote the sector. You clarified that the indaba is not to discuss the IRP or any energy-related policy as this is before Cabinet. You told us that we had incorrectly assumed that we had been invited to the indaba.

11.On 6 December 2017 at 20h05 – the evening before the Indaba – Robyn Hugo of the CER received an invitation to attend the Indaba, with a registration form, but no agenda. None of the other representatives of the organisations who attended the meeting with you on 5 December 2017 have subsequently received invitations to the Indaba.

Future engagement

12.You indicated that you wished to have a broader civil society discussion in the beginning of next year – after 8 January 2017 – which includes all of the community-based and non-governmental organisations in the sector, and you look forward to a constructive engagement.

13.While we are always prepared to engage with the Minister and Department of Energy on issues of concern, we need to be clear that such commitment to engagement does not exclude our rights to access other strategies, including legal proceedings and peaceful protest, to pursue lawful energy policy that give effect to constitutional rights. In this regard, we attach for your attention our 31 October 2016 statement “No room for secrecy: environmental organisations publish minimum requirements for SA’s overdue Integrated Resource Plan for Electricity” and our 9 November 2017 statement “What we expect from SA’s Integrated Resource Plan for electricity”, setting out what we regard as the minimum requirements for the IRP. %204Aug2017.pdf

The CSIR also did the system analysis which was used for the Meridian Economic study’s reference scenario – and found that in a 34 year, least cost optimised, power system operation and expansion plan, no new coal-fired power capacity is built after Kusile, and no new nuclear plant is built either. It states, “new coal and nuclear plants are simply no longer competitive. When new capacity is required, demand is met at lowest cost primarily from new solar PV and wind”. Furthermore see https://arxiv.org/pdf/1710.11199.pdf . This study by the Frankfurt Institute for Advanced Studies at the GoetheUniversity in Germany, provides independent confirmation of the CSIR findings regarding the least-cost electricity mix for South Africa. It finds that an electricity system based on wind and solar PV can supply electricity demand at 10%-30% more cheaply than based on new coal and nuclear – this is the case even when investments in the grid and transmission of electricity are taken into account.

A study by Grové Steyn, Jesse Burton, Marco Steenkamp, 15 November 2017, available at http://meridianeconomics.co.za/wp-content/uploads/2017/11/Eskoms-financial-crisis-and-the-viability-ofcoalfired-power-in-SA_ME_20171115.pdf .

14.We request a written response from you to the issues raised in our 10 November 2017 letter, these being:

14.1. clarity on the timelines and immediate next steps in the development of the final IEP and IRP;

14.2. clarity as to what meaningful public participation in the remaining IEP/IRP process will entail, and at what stage/s the public will be able to comment and for what period/s;

14.3. clarity on how meaningful public participation will continue to shape the IEP/IRP process;

14.4. clarity on the status of the existing determinations for coal, nuclear, gas and renewable energy;

14.5. clarity on the way forward with the heavily-delayed Independent Power Producer agreements that Eskom has thus far continued to refuse to sign; and

14.6. the long-term energy vision for South Africa.

15. We ask that you respond to these by 15 December 2017. We also confirm that no response has been received to the open letter from civil society dated 28 November 2017.

We look forward to your response also to this letter by 15 December 2017.

16.Please note that, given the far-reaching national importance of the issues discussed and the fact that we are public interest organisations committed to transparency and accountability, we are placing this letter in the public domain.

Yours sincerely,

CENTRE FOR ENVIRONMENTAL RIGHTS www.cer.org.za and www.lifeaftercoal.org.za GROUNDWORK www.groundwork.org.za and www.lifeaftercoal.org.za EARTHLIFE AFRICA JOHANNESBURG www.earthlife.org.za and www.lifeaftercoal.org.za GREENPEACE AFRICA www.greenpeace.org/africa/