South Africa has scrapped its plans for its R120-billion nuclear power-generating plant. It's just too big and costly. It was going to be built at Koeberg near Cape Town, next to an existing nuclear plant.
The country 's nuclear industry dates from the apartheid-era. The country has one aging French-built nuclear-reactor located just north of Cape Town and also has a nuclear-research facility with two reactors at Pelindaba near Pretoria which produces nuclear- fuel and -equipment for the medical and military industry.
Eskom spokesman Fani Zulu said they have ended the bidding process for construction of the project. The two bidders, Areva of France and Westinghouse of the U.S.A. were informed of Eskom’s decision. South Africa's scrapping of its nuclear plant programme was however just 'temporary' said Portia Molefe, the department of public enterprises director-general, this week.
Current national demand is 36,000 MW
The estimated R120-billion price tag would have been the largest single investment in the state-run South African electricity company's history. The government had hoped to start construction of the new reactor towards the end of 2010. It would have had a capacity of between 3200 and 3300MW. The current national demand is 36,000 mW.
South Africa is ideally located to generate nuclear energy -- and still does so with its apartheid-era nuclear power station at Koeberg near Cape Town, run by the state monopoly utility ESKOM.
SA Nuclear Regulation Commission
South Africa's trained community of nuclear scientists and engineers is shrinking rapidly since 1994 from more than 6,000 scientists working for its flourishing nuclear research and -energy programme. This was the crew in 2002. SA has just scrapped its plans for a second nuclear reactor because its R120m cost would have been too high. However it also doesn't have enough trained personnel to handle such a programme any longer.
Its income is entirely based on a monopoly: the Southern-african electricity grid is the only one providing power to some 15 southern African countries; South Africa also has an experienced workforce of nuclear engineers, it has a nuclear-fuel production plant near Pretoria and until just recently, also mined its own uranium yellow-cake. However, their only uranium mine, Dominion, closed down in October, ostensably over the slump in the price of uranium. And its skilled nuclear-engineering workforce is also emigrating at a fast pace.
The government had hoped to create a network of nuclear reactors by 2025 to boost the electricity grid's capacity to 20,000 megawatts -- more than 10 times the current output.
Township residents steal electricity to the tune of 3400 MW a year...at least
Since 1994, the country's electricity use has risen by 50% -- however at least 10% of this increase was caused not by growing economic strength, but by the many millions of empoverished residents in squatter camps and townships who risk their lives by plugging into the grid illegally - running the live wires across their fencing and rooftops.
Township residents steal R5,34-billion worth of electricity a year...
This electricity theft last year was conservatively estimated at 3400 mW, said a report by electrical engineer Chris Yelland of EE-news -- and township residents are stealing electricity to the tune of at least R5,34-billion a year, he said. Read report here:
At the moment, South Africa's aging electricity network - which is also suffering from a massive brain-drain of engineers -- gets 80% of its electricity from its huge supply of coal reserves. South Africa's economy is beginning to suffer because of the growing power shortages, which forced ESKOM to limit its power output to certain areas to reduce the drain, a system referred to as 'rolling blackouts'.
The country had pinned much hope for improving the network on the new nuclear reactor, which would have had a capacity of between 3200 and 3300 mw.
South Africa 's credit rating cut by Moody's Investors Service:
Eskom meanwhile also is still negotiating with the World Bank for a loan of $5billion US because its credit rating was cut by Moody's Investors Service recently. The reason for their failed credit rating was, Moody Investors Service said, was that the country's state-run electricity regulators had tried to appease the electorate by only allowing a 27 percent rise in the electricity price. To make ends meet, South Africa should have increased its electricity rates by 61 percent, Moody's said.
The contractors are disappointed, they said: "We' put a lot of work into the process, but we're hopeful the South African government will remain committed to developing nuclear power," said Jacques-Emmanuel Saulnier, a spokesperson for Areva in Paris. "If South Africa comes back to us, we'll be there."
Financial expert Jac Laubscher of Sanlam insurance company said 'it's not a train smash that they've cancelled the nuclear plan, because the country's electricity needs will drop because of the financial downturn."
Not optimistic about South Africa's future economy:
He was clearly not very optimistic, projecting that the SA economy now was expected to expand by only 3 percent next year and 4 percent in 2010.