Cape Town – Government remains committed to to the nuclear energy programme “in line with the cabinet approved integrated resource plan of 2010-2030” and would not consider abandoning it if its costs rose above a certain threshold, Energy Minister Tina Joemat-Pettersson has indicated in a parliamentary reply.
Lance Greying, a DA MP, asked the minister whether the government was committed to an update of the integrated resource plan (IRP) – of November 2013 – which suggests that if the installed price of nuclear power was more than $6500 per kilowatt, the nuclear procurement programme should be abandoned.
Greyling, his party’s energy spokesperson, also asked whether the government had set its own threshold price per kilowatt hour if a decision was taken by government to follow the build, own, operate model, where the nuclear vendor would be guaranteed a certain price for the electricity it generates.
Joemat-Pettersson said emphatically: “No. The department of energy is implementing the nuclear new build programme in line with the cabinet approved integrated resource plan 2010-2030 that has stipulated that 9.6GW nuclear power will form part of (the) energy mix.”
It was government’s stance that the final installed price per kilowatt “will be negotiated during the nuclear procurement process,” said Joemat-Pettersson, noting that the IRP update “has not been approved by (the) cabinet”. Therefore, government would not abandon the nuclear new build programme, she said.
Greyling said Joemat-Petterson’s response was “quite revealing”. It confirmed that South Africa was making decisions about its energy future “based on an outdated energy plan. He noted that when the energy plan was drafted “it specifically stated it needed to be revised every two years” to stay up to date with changing circumstances in the energy sector.
Notably cabinet had not accepted the energy update, which pushed out red flags about the cost implications of the extremely expensive nuclear build programme, Greyling remarked.
The circumstances in energy had changed remarkably in the last few years. First there had been “massive” discoveries of gas in southern Africa, including in Mozambique and Tanzania. “We are ignoring that,” he said.
At the same time South Africa’s energy demand had not gone up as projected in the 20 year plan.
“We are ignoring the fact that our energy demand is now similar to 2007,” said Greyling. At the same time there had been a precipitous drop in the price of renewable energy technologies. “Once again the government is just ignoring this.”
Government appeared dead set to forge ahead with the nuclear power programme for political reasons, said Greyling.
“This is a political decision (to pursue nuclear power) rather than an economic one. Government is pushing ahead with nuclear (power) regardless of what the energy modelling is showing us as to what the optimal energy mix should be.”
Joemat-Pettersson should explain to the nation, said Greyling why the cabinet had not accepted the IRP update.
“They need to have valid reasons for that, as in the absence of such an update the government will be locking the country into what is clearly sub-optimal energy investments that will have dire implications for the country’s electricity price.”
He believed the government was at an ideological war with itself over whether to keep the current Eskom monopoly over power provision or to allow greater market participation and competition.
In another question to Joemat-Petterson, Greyling asked what was the status of the independent system and market operator (Ismo) bill – which allows an independent operator to manage the transmission system – and when would it come back to parliament.
Joemat-Petterson said the Ismo bill had been submitted and deliberated over by the previous parliament.
“Several concerns were raised regarding the impact on Eskom and the Bill never served before the national assembly,” said the minister.
“The Ismo bill is currently being considered and after further stakeholder consultation a decision will be made,” she said.
Meanwhile, DA MP Gordon Mackay asked the minister if the department was fast-tracking the creation and implementation of the transmission service operator.
The minister replied that “while the discussions are taking place regarding the end state of the electricity supply industry and taking into account Eskom’s operational circumstances, it would be premature to already create a transmission service operator”.
The establishment of a transmission service operator would be a step further than the Ismo model. Under the latter the management and operations would be placed under an independent operator, while a transmission system operator would garner Eskom’s physical assets out of the grid as well.