South African state-owned power utility, Eskom, yesterday released its interim financial results reporting that its interim profits were down 34% to R6 billion ($502 million).
This staggering figure has confirmed that the parastatal’s new nuclear build plan will need to be revised in terms of affordability versus real demand.
Interim Eskom chief financial officer Calib Cassim, stressed during the media briefing on Tuesday that the utility simply cannot afford the planned nuclear power expansion.
Cassim explained that: “If I had limited funds, I can’t be worrying about the future build if I can’t sustain existing operations.”
“I can’t go and commit to additional expenditure on a nuclear programme,” Cassim added.
Deputy President Cyril Ramaphosa raised the affordability in question, during his attendance at the World Economic Forum in Davos this month.
“We have to look at where the economy is – we have excess power and we have no money to go for a major nuclear plant building,” Ramaphosa told reporters.
“We have said the nuclear process will be looked at in the broad context of affordability.” Read more…
In support of Ramaphosa’s vision, Earthlife Africa director Makoma Lekalakala, commented: “What I understand is that Ramaphosa is reiterating what has been said in the past, that South Africa does not have the money to build nuclear.”
Nuclear: not a viable solution
Professor Anton Eberhard and Dr Amory Lovins of UCT’s Graduate School of Business, have recently published a paper titled ‘South Africa’s Electricity Choice’, which reiterates the point that new nuclear power is not viable in South Africa.
The report explains: “The South African government’s obsession over the past decade with nuclear power may finally come to an end with a new president and administration committed to restoring good governance and securing reliable electricity supply at least cost to support economic growth and development.
“The inherent complexity of nuclear procurement, financing and especially construction, means no new nuclear- generated electricity could flow for at least a decade, even with immediate procurement, and then only at prices well above other electricity options.”
“The risk that the project might collapse as unfinanceable, or through corruption, creates further uncertainty around South Africa’s electricity choices,” the opening of the report stated.
Read the full report: ‘South Africa’s Electricity Choice’.
Featured image: Deputy President Cyril Ramaphosa: IOL News