SA’s R250bn nuclear power plan faces funding and approval hurdles

South Africa plans to procure 2,500MW of nuclear power at a cost of R250 billion, with funding challenges anticipated. Minister Kgosientsho Ramokgopa seeks National Treasury approval by August 2024. Expert Hartmut Winkler doubts approval, citing high costs and additional servicing expenses. Procurement could take 10-12 years to complete..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..Join us for BizNews' first investment-focused conference on Thursday, 12 September, in Hermanus, featuring top experts like Frans Cronje, Piet Viljoen, and more. Get insights on electricity and exploiting SA's gas bounty from new and familiar faces. Register here..By Myles Illidge.R250 billion, and energy expert Hartmut Winkler believes securing funding for the project will be difficult..This comes after the Minister of Electricity and Energy, Kgosientsho Ramokgopa, said he hoped to receive approval from the National Treasury in August 2024..Speaking to Newzroom Afrika, Winkler said the R250 billion cost only relates to construction and doesn't include the cost of servicing the station.."We're talking about R250 billion. That's based on projects of similar size in Bangladesh and in France," he said.."The country would most probably need to secure a major loan. The station would also then need to be serviced later and add to the cost.".Winkler is of the opinion that the National Treasury won't approve the project.."If it happens, it's still got to go through a huge number of processes. It's not just the Treasury approval; it's far more than that," he said.."Personally, I don't think we're ever going to get to the point where it will receive approval.".In January 2024, Ramokgopa gazetted a determination confirming the government's plan to procure more nuclear power..The document explains that the new stations could be built by Eskom or in collaboration with any other juristic person, such as a private business.."The procurer designated above will be responsible for determining the procurement process which will be established through a tendering procedure which is fair, equitable, transparent, competitive and cost-effective," it adds..Ramokgopa indicated that Eskom will likely be responsible for the plant's operation due to its experience with Koeberg..The minister said that some of the internal discussions around the project included what type of technology it would use.."There's the latest technology that is very rapid to deploy, relatively cheaper, and more efficient," Ramokgopa said..Previous indications were that Thyspunt near Jeffreys Bay in the Eastern Cape had been identified as a possible site for the new nuclear power station..Ramokgopa gazetted the determination roughly a month after he told the media that the Department of Mineral Resources and Energy's (DMRE's) plan to procure 2,500MW of new nuclear generation capacity is progressing..He added that the plan would be gazetted.."We are starting the process of gazetting, so we are triggering essentially a procurement process," the minister said.."We are going out to ensure that we are able to get that additional 2,500MW of nuclear capacity to ensure that we are able to meet the issues of national security and energy sovereignty.".Ramokgopa said South Africans could benefit from the new nuclear capacity within three to four years..However, DMRE deputy director-general for nuclear Zizamele Mbambo disagreed. He previously said it could take up to 10 years.."We found that the ideal time by which to start commissioning the first unit of this 2,500MW is around 2032/2033," said Mbambo..The DMRE had previously suggested that the new capacity wouldn't be operational until 2030. It said procurement would be completed by 2024.."Remember here, we are dealing with a long-term project which requires us to start early to be able to optimise on time. At the minimum, it takes about ten to 12 years to be able to commission a nuclear power plant into the grid," said Mbambo..He added that there was still uncertainty around whether South Africa would build a conventional nuclear power plant, small modular reactors, or another design.."At this stage, we cannot pronounce as to what the shape, form, and the format that the RFP [Request For Proposal] would look like or what it would call for," he said..Read also:.South Africa extends Koeberg nuclear plant license until 2044Nuclear power is the key to SA's energy future, but why is it taking so long: Andrew KennySA to unveil plans for 2,500MW nuclear power station.This article was originally published by MyBroadband and has been republished with permission.

SA’s R250bn nuclear power plan faces funding and approval hurdles

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