South Africa’s nuclear tender attracts some of world’s energy giants

The nuclear tender, due to be announced later this year, is expected to cost an estimated R300bn, and is certainly going to be hotly contested

SISEKO NJOBENI

Published: 2012/05/03 07:24:48 AM

SA’s planned nuclear tender has some of the world’s biggest energy companies sniffing around.



Since the government made it known that nuclear energy would be part of the future energy mix, nuclear developers have kept SA on their radar screens.



The nuclear tender, due to be announced later this year, is expected to cost an estimated R300bn, and is certainly going to be hotly contested. The big players in nuclear energy have already set up operations in SA in anticipation of the project. Just last week, the Russian State Atomic Energy Corporation hosted a seminar in Johannesburg to showcase Russian nuclear technology.



Names that spring to mind are French energy giant Areva and US nuclear technology group Westinghouse. The two firms were competing for Eskom’s multibillion-rand Nuclear 1 project but the utility aborted procurement for a 3330MW nuclear plant in December 2008 when its board could not make an investment due to financial pressures.



While Eskom’s decision could not have gone down well with the nuclear vendors, the government dangled an even bigger carrot. Then Department of Public Enterprises director-general Portia Molefe said at the time that, instead of building one power station, the government was looking for a partner to help develop the country’s nuclear industry. This is the approach adopted by South Korea in the 1970s.



One of the advantages of embarking on a nuclear programme is that there is a greater chance of creating a local industry by building a fleet of nuclear reactors rather than creating capacity on a piecemeal basis.



In a paper on the development of nuclear power in South Korea published in 1999, the Korea Advanced Institute of Science and Technology said the country had been successful in localising nuclear technology. A major turning point was the 1976 machinery localisation policy, which was meant to increase the local content ratio of plants and equipment, and to reduce the portion of turnkey plants built by foreign companies, the paper said.



"The Korea Electric Power Corporation (Kepco) adopted a non-turnkey approach such that each nuclear project was divided into various sub-projects, and made it a requirement for foreign suppliers to include domestic firms as participants to work on such sub-projects," it said. Kepco, which is responsible for 93% of Korea’s electricity generation, has been mentioned as a potential bidder for SA’s programme.



Areva, which built the nuclear facility in Koeberg, has expressed a desire to be part of the nuclear programme. It is said to be intending to submit a bid with China’s Guangdong Nuclear Power Group. "It is premature to speculate on potential commercial agreements, partnerships, technology specifications or costs for the South African nuclear tender. Areva is eagerly waiting for the South African government’s requests for proposals … Areva is in preliminary discussions with a number of players and will propose the best solution for SA after it has studied the tender requirements," said a spokesman.



The potential bidders and the rest of the country await the details of the nuclear programme. The integrated resource plan for electricity makes provision for 9600MW of nuclear power by 2030. But Energy Minister Dipuo Peters said no decision had been taken on the number of plants.

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