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New nuclear: DoE response to sensationalism

In response to media headlines that read “Zuma pals score first nuke deal”, the South African Department of Energy (DoE) has issued a statement to correct the context of these statements.

According to the DoE, Cabinet approved the Integrated Resource Plan 2010 – 2030 and the plan provides for the rollout of the nuclear new build programme for 9,600MW of nuclear power, which will be deployed by 2030.

Emphasising that the procurement process has not yet started, the DoE said it will only commence upon the issuance of the Request for Proposals (RFP) for the 9600 MW nuclear power, as directed by Cabinet.

New nuclear needed for clean baseload

During the State of the Nation Address in February 2016, Zuma highlighted that the country will only procure nuclear on a scale and pace that the country can afford.

The department explained:The National Development Plan enjoins the government to conduct thorough investigations on different aspects of the nuclear new build programme before a procurement decision is taken.

“More specifically, the National Development Plan [NDP] directed that South Africa needs a thorough investigation on the implications of nuclear energy, including its costs, financing options, institutional arrangements, safety, environmental costs and benefits, localisation and employment opportunities, and uranium enrichment and fuel fabrication possibilities.”

Keeping in-line with the NDP

In line with the NDP directive the Department of Energy, in conjunction with other organs of state (within the Energy Security Cabinet Sub-Structures) has, over the past five years, been developing various strategies and policies and as a result has commissioned independent studies to create a framework for the procurement decision and the preparation for the procurement of the nuclear new build programme.  Independent transactional and / or expert advisors and other resources have been sourced by the Department over the five-year period.

The department has noted that the current procurement processes as outlined below are part of the feasibility and assessment processes needed by government to make an informed decision in finalising the considerations for a nuclear build:

  1. Ingerop: Cost of Nuclear Power,
  2. KPMG: Procurement Framework,
  3. Ingerop: Owner-Operator and Financing Structures,
  4. Deloitte: Finance Options Models Solutions,
  5. Deloitte: Deferred Return On Government Investor Approach,
  6. Ingerop: Economic Impact of Localisation of Nuclear New Build Programme,
  7. Nathan Gift Nhlapho Incorporated: Feasibility Study on Effective Independence of the National Nuclear Regulator.
  8. Nathan Gift Nhlapho Incorporated: Requirements, Considerations and Necessary Arrangements by the Government in Order for South Africa to Accede to One of the IAEA Nuclear Liability Conventions.
  9. Zimkile Consulting: The Development of Training Programme of First Responders for Nuclear and Radiological Emergencies
  10. University of Pretoria: A Detailed Financing Model for the Radioactive Waste Management Fund
  11. Mzansi Energy Solutions and Innovations Pty: Feasibility Study on the withdrawal of Safeguards Function from NECSA
  12. Mahlako-A-Phahla Investments (with sub-contracting to Ledwaba Mazwai Attorneys and WorleyParsons): Pre-Procurement Readiness Assessment.
  13. Empire Technology: Programme Management System

“It is important to note that the above activities are all part of the preparatory work for the procurement for the programme. The procurement of all the transactional advisors and services providers has been conducted in a manner that is compliant and consistent with all applicable procurement prescripts,” the DoE explained.

The department added: “The suggestion that there has been any bias or irregularity in the procurement of any of the services and resources is rejected.”

Cabinet approved that the Department must issue the Request for Proposals (RFP) to the market and determine the final funding model as part of this process. The financial implications for the programme will be determined as the outcome of the Request for Proposals and resubmitted to Cabinet for consideration.

Ashley Theron
Ashley Theron-Ord is based in Cape Town, South Africa at Clarion Events-Africa. She is the Senior Content Producer across media brands including ESI Africa, Smart Energy International, Power Engineering International and Mining Review Africa.