The News That Matters about the Nuclear Industry

Secretive deals between Russia and South Africa about buying nuclear technology

Russian-Bearflag-S.AfricaSecret nuclear deal talks held in KZN, news 24,  2014-10-24 Rowan Philp, The Witness Pietermaritzburg - Twenty of Vladimir Putin’s top nuclear experts pitched for South Africa’s biggest-ever deal – with an estimated R1 trillion price tag – at a secret meeting in the Drakensberg on Thursday.

The Witness can reveal that 50 South African experts – including its nuclear chief, Zizamele Mbambo – grilled officials from Russia’s state atomic energy company, Rosatom, at a secretive four-day conference at the Champagne Sports Resort.


 Officials initially denied that Rosatom was present, and the secrecy blanket included the omission of the firm’s name from all workshop materials.

However, a Witness reporter gained access to one key meeting for 15 minutes before being ejected, and also traced the name of the South African head of Rosatom to a chalet at the hotel. Rosatom officials pitched eight of their “VVER” pressurised water reactors for South Africa’s massive “nuclear build” programme.

It is intended to add 9 600 megawatts to the grid by 2030.

In an interview at the hotel, Mbambo said a French company was expected to pitch six of its slightly larger reactors at a similar conference.

The Russians were given the opportunity to present the first workshop in which to “parade” their offering, and France and China are set to follow later.

However, Mbambo revealed that other invited countries – including South Korea and the US – could potentially miss out on consideration if their presentations were not ready in terms of an unspecified deadline.

‘Window dressing’

Echoing the concerns of unions and accountability watchdogs, the DA last week alleged that the secretive workshops with various countries were “window dressing”, and that “all evidence points to a done deal with the Russians”.

This follows the revelation that President Jacob Zuma had struck a private agreement with Putin in August, and a statement by Rosatom in September that a deal for “actual joint construction” had been struck with the South African government.

The department of energy later said the statement had been “misunderstood”, and Mbambo on Thursday said: “No vendor has been chosen, and the procurement process has not yet begun.”………

The event was so secretive that the name “Rosatom” did not appear on any conference badges or place cards, and Russian officials also refused to confirm who they were when they were questioned about their identities.

But two members of the Russian delegation wore “Rosatom” golf shirts at the breakfast buffet, and The Witness established that Rosatom’s Vladimir Polikarpov was staying in chalet 27.

An energy department official later confirmed they were the bidding vendor………

October 25, 2014 Posted by | secrets,lies and civil liberties, South Africa | Leave a comment

South Africa a juicy target for the nuclear reactor marketers

flag-S.AfricaState shops for ‘nuclear vendor’ IOL October 20 2014  Cape Town – The government has confirmed it is shopping around for its nuclear build programme and says it is consulting “nuclear vendors” in the US, South Korea, Russia, France, Japan and China.



The announcement by the Department of Energy yesterday comes weeks of controversy about the multibillion-rand nuclear project since it emerged last month that a R1-trillion agreement had been signed with Russia, followed by another with France.

The department said the government was consulting “nuclear vendor countries” with pressurised water reactor nuclear technology, similar to that used at Koeberg………

DA leader Helen Zille has said the nuclear co-operation agreement with France, signed by Joemat-Pettersson on Wednesday, is nothing more than a “decoy”.

“This is… to muddy the waters and divert attention from the Russian deal negotiated by President (Jacob) Zuma and signed by Minister Joemat-Pettersson last month.

“We are led to believe a similar agreement with the Chinese is next and that a proper procurement process has yet to begin, but all evidence points to a done deal with the Russians. No amount of obfuscation can allow our focus to shift from this.” – Cape Times

October 21, 2014 Posted by | marketing, South Africa | Leave a comment

South Africa’s Treasury advised against getting Russian nuclear reactors, but Putin is pushing for the sale

Russian-Bearflag-S.AfricaVladimir Putin’s quest for a nuclear monopoly, Mail & Guardian, South Acfric17 OCT 2014 00:00 QAANITAH HUNTER  Somehow Russia has persuaded President Jacob Zuma into agreeing to a deal for a nuclear fleet that the treasury opposed. The Russians are coming. The nuclear deal with Russia is to dominate the agenda when the South Africa-Russia joint intergovernmental committee on trade and economic co-operation meets next month.

Even though the South African government insists it has not entered into the procurement phase for the nuclear fleet, it has become clear that Russian President Vladimir Putin managed to sway President Jacob Zuma and Energy Minister Tina Joemat-Pettersson into giving Russia the entirety of the deal.

Zuma and his most trusted Cabinet ministers went against the strict advice of the national treasury and his senior advisers when a nuclear energy “agreement” was signed with Russia last month.

Two sources who also advised against it revealed this week to the Mail & Guardian that an initial bid made by Russian nuclear company Rosatom last year was rejected by the treasury and a number of Zuma’s advisers. A third credible source who was close to the negotiations confirmed their version of events.

The treasury this week did not deny advising against the initial Russian proposal.

“Nuclear would be a substantial financial commitment and government can only make that kind of commitment after careful and thorough-going modelling and an affordability assessment,” said spokesperson Jabulani Sikhakhane.

He said they had yet to discuss how the treasury would pay for nuclear energy.

Exclusive rights
It has emerged that the Russians wanted exclusive rights to South Africa’s nuclear industry. This was substantiated by a statement made by Putin in March last year, ­following his visit to South Africa, saying his country did not want to merely build the nuclear plants but would bid to run the entire nuclear industry here.

South Africa plans to enhance its energy mix by creating 9.6 gigawatts of nuclear energy by 2030.

The M&G spoke to three highly placed sources – all of them indicated that:

  • The initial Russian proposal was not affordable and the treasury rejected it;
  • The technology proposed was sub standard and dangerous;
  • It would exclude and be damaging to local industries; and
  • Even public servants who seemed loyal to Zuma had concerns about it.

One source close to the nuclear talks said the signing of the agreement was a result of about two years of courting by the Russians……….

October 18, 2014 Posted by | marketing, Russia, South Africa | Leave a comment

France’s nuclear giant AREVA gets agreement to supply reactors to South Africa




France and South Africa sign nuclear energy agreement  By Martine Pauwels, Cécile Feuillatre Paris (AFP) 14 Oct 14,  – Paris and Pretoria signed Tuesday an agreement which could open the way for French nuclear giant Areva to bid to build eight nuclear reactors in South Africa worth up to $50 billion (39.5 billion euros).

French Foreign Minister Laurent Fabius and South African Tina Joematt Pettersson signed an intergovernmental agreement on cooperation in nuclear energy development which is necessary for any commercial deal……..

October 15, 2014 Posted by | politics international, South Africa | Leave a comment

What a mess South Africa’s new ‘nuclear deal’ is in !

fighters-marketing-1flag-S.AfricaBid to stem fallout from nuclear ‘deal’ IOL. October 12 2014  By Wiseman Khuzwayo The apparent deficiencies in how the nuclear deal with Russia was handled have sent President Jacob Zuma’s office into overdrive in trying to contain the fallout from indications proper procedures had not been followed.

The nuclear build from this agreement reportedly will cost South Africa a record R3 trillion.

To stem the tide of criticism, Zuma’s spokesman, Mac Maharaj, said on Friday that the president had granted Energy Minister Tina Joemat-Pettersson authority to sign a similar agreement with the French government.

This is obviously the administration’s attempt to mitigate the fallout. Maharaj said Zuma had granted the same authority to the energy minister to sign the earlier controversial agreement with Russia.

On Wednesday, Beeld newspaper reported that Joemat-Pettersson had been alone when she signed the “mysterious” agreement with Russia.

According to the report, the rest of the South African delegation attending the general conference of the International Atomic Agency in Vienna was told to go and wait somewhere else because the meeting with Russia was “private”.

The announcement on September 22 followed a secretive trip to Moscow by Zuma and prompted allegations that the government was dodging procurement policies.

This then prompted officials from the Department of Energy to call a press conference to placate the critics………

Lance Greyling, DA spokesman on energy, said on Friday that Joemat-Pettersson and officials of Rosatom must, with urgency, appear before the energy portfolio committee.

He said they must account for what appeared to be a deal riddled with irregularities.

Greyling said in a bizzare attempt to deflect criticism regarding the secret agreement, Rosatom had blamed a poor translation of its statement as the cause of misunderstanding behind the agreement, disavowing its earlier claim of having been awarded the contract.

“The desperate move comes as South Africans express clear dissatisfaction with the lack of transparency surrounding the ‘agreement’, which is set to cost the fiscus nearly R3 trillion.”

The National Union of Mineworkers does not support the agreement. Its national executive committee said it believed there had to be transparency and a tendering process.

October 13, 2014 Posted by | secrets,lies and civil liberties, South Africa | Leave a comment

Russia’s Rosatom now denying that there is a contract with South Africa


The company blamed a poor translation for its late September statement in which, quoting South African government officials, it said it had been granted the right to build a fleet of nuclear power stations for SA.

The news that Russia would build nuclear power stations came as a surprise as no announcement had been made by the government that it had begun any tender process to procure the 9.6GW it said it would be actively seeking.

“The wording (in the statement) from Rosatom wasn’t well chosen,” said Viktor Polikarpov, regional vice-president for sub-Saharan Africa. “We have to admit that we worded the statement wrongly. It was lost in translation (from the original Russian).”

In this statement Rosatom quoted Energy Minister Tina Joemat-Pettersson. After going to ground and for days being unavailable to confirm the Rosatom claim, the Department of Energy eventually released a statement on its website, which was almost identical to Rosatom’s “translated” statement.

Following this, the department said the statement in no way confirmed SA had reached a deal with Russia. The agreement only envisioned possible future co-operation on nuclear energy issue……….

When Business Day asked for a copy of the co-operation agreement, Mr Polikarpov said the document “is classified … it is not available for public consumption”.

Mr Polikarpov was asked how Rosatom arrived at the $50bn price estimate for the project. After much discussion in Russian with Alex Kirillov, head of marketing in SA, he said this was the estimated cost of Rosatom’s plants……..

Rosatom will apply for a $50bn loan from the Russian government if SA chooses a build, own and operate model, he said……..

October 10, 2014 Posted by | politics international, South Africa, Spain | Leave a comment

Confusion over South Africa’s secret nuclear deal with Russia

Russian-Bearflag-S.AfricaNuclear Deal With Russia Brings Political Storm Clouds in South Africa VOA October 09, 2014  JOHANNESBERG, SOUTH AFRICA— Opposition lawmakers are crying foul about a multibillion-dollar nuclear power deal with Russia, saying the agreement could give Moscow the power to veto South African trade with other nuclear providers.The Sept. 22 strategic partnership, signed on the sidelines of the International Atomic Energy Agency conference in Vienna, comes as Moscow has sought to boost lucrative exports of nuclear equipment, technology and expertise in recent years…….

Lance Greyling, a top lawmaker with the opposition party Democratic Alliance, said there was confusion about the Sept. 22 deal. A draft agreement signed last year gave Russia the power to veto South African trade with other nuclear providers, party officials have said.

    “What the government is saying at the moment is that they’ve just signed a framework agreement with Russia and that there will still be a procurement process that is followed,” he told VOA on Oct. 3. “But what we are unclear about is what exactly is in this framework agreement, and the fact that they’re not willing to show it to us makes us highly suspicious.”…..
      If the government has nothing to hide in the deal then it needs to share details of the arrangement with lawmakers, Greyling said…….

October 10, 2014 Posted by | politics, South Africa | Leave a comment

South Africa’s murky and uneconomic nuclear deal

secret-dealsflag-S.AfricaA nuclear deal as clear as mud October 7 2014  Cape Argus, By Jasson Urbach The decision to “go nuclear” in SA has more to do with politics than economics, writes Jasson Urbach.

South Africa is “going the nuclear route”, according to the Department of Energy’s acting director-general, Dr Wolsey Barnard. But given Eskom’s dire financial predicament, the government is opting for a “vendor-financed” option.

We should applaud the fact that Eskom, probably, will not be building South Africa’s next power station.

The delays and cost overruns associated with Medupi and Kusile demonstrate it’s not competent as a project manager for the building of such large plants.

However, the decision to “go nuclear” has more to do with politics than economics. Nuclear is costly – given the dramatic fall in gas prices, a private enterprise would not build a nuclear plant in the current operating environment. And nuclear will take too long to deliver – South Africa needs power sooner rather than later. Continue reading

October 8, 2014 Posted by | politics, South Africa | Leave a comment

South Africa’s present, and future, nuclear waste problem

wastes-1flag-S.AfricaNuclear waste is going nowhere slowly Mail & Guardian 03 OCT 2014 ANSIE VICENTESARAH WILD  Generations from now, there will still be no-go areas storing radioactive by-products of nuclear power production. In 300 years, South Africa’s Vaalputs nuclear waste site – a 10 000ha reserve in the dusty Northern Cape – will be opened for unrestricted use. Until then, it needs to be guarded and monitored; no small feat considering that if the 1820 British settlers had buried nuclear waste on their arrival, we would still be guarding the site.

About 100km from the town of Springbok, a warm wind raises dust from the ground, which has not seen rain in many months. Eight metres underground, concrete and metal drums containing low- and medium-level nuclear waste are biding their time, as the natural and sparse shrubbery reclaims the surface of the trenches they were buried in.

This is one of the major question marks over nuclear technology: What do we do with the waste?……….

the urgent question posed at the scientific forum in Vienna was what to do with the more dangerous high-level waste. For South Africa, with its plans to build a nuclear fleet to generate an additional 9 600MW of electricity, about 23% of the country’s power requirements, this issue is even more pressing.

Koeberg and Pelindaba’s high-level nuclear waste remains on site and is not moved. According to South Africa’s 2011 report to the Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management, “used fuel from the Koeberg nuclear power station is currently stored in authorised used fuel pools on the site as well as in casks designed and constructed for storage of used fuel”………

“it is recognised that the current storage capacity at the Koeberg and Pelindaba sites [is] finite and the practice of storing used fuel on a reactor site is not sustainable indefinitely”.

So what will happen to the nuclear waste from the country’s proposed 9 600MW nuclear build?

Storage ‘pools’,…..

As Carl-Magnus Larsson, the chief executive of the Australian Radiation Protection and Nuclear Safety Agency, said: “We must remember that storage is an interim solution until final management and disposal … it remains a temporary measure.”….

October 6, 2014 Posted by | South Africa, wastes | Leave a comment

Very worrying financial implications for South Africa’s nuclear deal with Russia

scrutiny-on-costsflag-S.AfricaNuclear urgency raises alarm, Mail & Guardian , South Africa  27 JUN 2014  LYNLEY DONNELLY The state seems set on going the atomic route despite the huge financial implications. Pressure to find a nuclear solution to South Africa’s power problems continues unabated, despite persistent concerns over its affordability.

Experts point out that nuclear vendor financing may be the way to fund the country’s nuclear ambitions, but there are unresolved legal and financial implications.

There is speculation in the energy sector that political pressure cost former energy minister Ben Martins his job, because he failed to secure a nuclear deal with Russia’s Rosatom.

Martins was replaced by Tina Joemat-Pettersson in President Jacob Zuma’s recent Cabinet reshuffle and goes back to Parliament as chairperson of the portfolio committee on public works……….

The apparent urgency about nuclear procurement runs counter to key government policies, specifically the National Development Plan, which calls for an in-depth investigation of the financial viability of nuclear procurement, and the draft update of the integrated resource plan (IRP), published last year. The document, which is government’s electricity planning road map, suggested that a nuclear decision could be delayed given revised projections of electricity demand.

Nevertheless, a decision about ways to procure nuclear power could be expected within the next two months, theMail & Guardian understands.

Elusive payment plan
The answer to how South Africa will pay for a planned 9 600 megawatts of nuclear capacity remains elusive. Eskom was named the owner and operator of new nuclear plants by the Cabinet, but it is in dire financial straits. It has declared a R225‑billion funding gap and has been placed on credit watch by ratings agency Standard & Poor’s………

The cost of nuclear energy could reach R1-trillion and faces competing energy investment demands.

Nuclear vendor financing models have been touted as a way to get around this, which Martins confirmed is the preferred model. “It was never the intention that South Africa would fund the entire nuclear programme. The stakeholders that have an interest in it would substantially fund the nuclear programme,” he said.

Ross Harvey, a visiting research fellow at the South African Institute of International Affairs, said a likely arrangement is that a nuclear vendor would build, own and operate a plant and take full responsibility for the financing.

Buy-back guarantee
In turn, an electricity buy-back guarantee by the government is the most likely way for the vendor to recover costs.

But it is not clear what legislative and tender processes would need to be in place to manage procurement, he said, and much more work is needed to create “legislative coherence” to govern a nuclear bid.

And, although this model would eliminate initial capital constraints, the government would still have to make good on a buy-back guarantee, Harvey said. It is also not clear that, in the time taken to complete a nuclear build programme, there would be sufficient electricity demand, supported by heavy industrial activity, to support such a guarantee. In addition, other technologies could rapidly develop to provide cheaper base-load power.

Rosatom is constructing a similar “build, own and operate” project in Turkey.

Harvey estimated that, based on Rosatom’s investment there, a Rosatom plant would cost between $5-billion to $7-billion, which is a “massive investment to recoup”.

September 27, 2014 Posted by | politics, South Africa | 1 Comment

Delays and impediments to South Africa getting Russian nuclear power plants

Russian-Bearflag-S.AfricaAnalysis: Why we won’t be getting any nuclear power plants from Russia anytime soon, Daily Maverick, DIRK DE VOS SOUTH AFRICA
25 SEP 2014
 The Department of Energy recently issued a statement regarding a new partnership in nuclear energy. But let’s not get excited. Nuclear power is a diversion from the real issues in the energy sector – and the culmination of a whole lot of dreaming. By DIRK DE VOS.

The recent media release issued by the Department of Energy, on the agreement regarding a strategic partnership in nuclear energy, will go nowhere.

We are advised that the agreement was signed between the Director-General of state-owned Rosatom but on behalf of the Russian government and Ms Tina Joemat-Pettersen, our minister of Energy, at the 58th session of the Atomic Energy General Conference. While the actual agreement is not available, the announcement reads that it “lays the foundation for the large-scale nuclear power plants (NPP) procurement and development programme of South Africa, based on the construction…of new nuclear power plants with Russian VVER reactors with a total installed capacity of up to 9,6GW (up to 8 NPP units)”.  It goes on: “Rosatom seeks to create in South Africa a full-scale nuclear cluster of a world leader’s level – from the front-end nuclear fuel cycle up to engineering and power equipment manufacturing.” (sic) It ends with the sentence: “This agreement opens the door for South Africa to access Russian technologies, funding, [and] infrastructure, and provides a proper and solid platform for future extensive collaboration”.

So, not that clear at all……..

 Already, the Rosatom view has been qualified with a senior government source tellinReuters “[t]hey jumped the gun” and Xolisa Mabhongo, an executive at South African state agency Nuclear Energy Corporation confirming that there would be a bidding process before any final contracts were signed.

The whole drive for nuclear power is very hard to understand, especially since it goes against the government’s own policy document, the Integrated Development Planwhich advises that commitments to long range, large-scale investment decisions “should be avoided” in order to ensure “decisions of least regret”. Nuclear builds take a long (a decade) to be completed and therefore do nothing to ease our current pressing energy problems. If nuclear were to get the green light, other shorter-term solutions would still be needed and then, when nuclear eventually comes online, we will find ourselves sitting with thousands of megawatts of excess and extremely expensive baseload capacity. ……….

…..Perhaps “jumping the gun” has something to do with the pressure Rosatom is facing from its various foreign nuclear power station builds, which it says amounts to $100 billion due to tighter economic sanctions imposed against Russia for its role in Ukraine’s civil war. This includes a $8.4-billion nuclear power project in northern Finland (where Rosatom has a 34% ownership stake) and a $10 billion nuclear plant expansion deal brokered between Rosatom and a Hungarian utility company. The Hungarian one is especially  interesting. It is reported that Benedek Javor, a Hungarian member of parliament, requested that the EU investigate Rosatom deal because he says that it secured its deal without a public procurement process in violation of EU regulations……….

Despite everything, nuclear energy is just uneconomic and will not solve our immediate energy problems either. Countries that select power supplies through democratic, transparent and market-based methods aren’t building new nuclear reactors. The cost differentials between nuclear energy and anything else can’t be fixed by sharpening pencils – the gulf is just too big. None of this means that we should not be vigilant. Rosatom’s footprints in Hungary and Turkey should be closely tracked.

Perhaps the biggest problem with our government’s apparent fixation with nuclear power is that it diverts attention away from the very many things in our energy sector that desperately require our attention. We can but hope that our decision makers will consult the IRP and put these nuclear dreams aside.DM

September 26, 2014 Posted by | politics international, South Africa | Leave a comment

Financial problems for South Africa in planned nuclear deal

nukes-hungryflag-S.AfricaNuclear economist warns SA will ‘run into problems’ BY CAROL PATON, 19 SEPTEMBER 2014,  SA’s last tender to build nuclear power stations was canned in 2008 after credit rating agencies made it clear that they would downgrade Eskom to junk if it went ahead, Steve Thomas of the University of Greenwich said in a lecture on nuclear economics at the University of Cape Town on Thursday.

Details of Eskom’s nuclear tender in 2006 have not been fully disclosed, except that Eskom dropped it for being too expensive.

Eskom had expected a construction price of $2,500/kW but bids came in at $6,000/kW. It was also made clear, said Prof Thomas, that ratings agencies demanded “unconditional, timely guarantees” across all Eskom’s debt stock for it to maintain its credit rating.

Prof Thomas, visiting as guest of antinuclear lobby group EarthLife, said he expected SA’s nuclear endeavour to run into the same problems. Financing of nuclear projects had become highly risky and was regarded as credit-negative by ratings agencies.

“In the past, financing was not a problem. Utilities were blue-chip stock. They built plants and the costs were passed on to consumers. From a banking point of view this was ideal,” he said.

But accidents such as Chernobyl had led to increased costs in nuclear construction as additional safety measures must be included. Cost and time overruns had led banks to see nuclear power as too risky.

New regulatory approaches, in which prices are set by an independent regulator that assesses their fairness, have made it more difficult for utilities to pass on price increases to consumers.

“Of 70 nuclear power plants under construction, 50 are significantly late and the odds are against you to build to time and cost. So if banks won’t take the risk, then consumers must. But regulators are less likely to say consumers should sign a blank cheque. “For most countries that is not a viable option,” he said.

The remaining option was for taxpayers to provide the guarantees, should the nuclear vendor or utility go bankrupt.

n the UK, where a new plant is under construction at Hinkley Point, the British government has provided £10bn in loan guarantees, equal to 62% of the estimated cost.

“Unless SA consumers or taxpayers can guarantee the loan, a nuclear deal will not be financeable.”

September 20, 2014 Posted by | business and costs, South Africa | Leave a comment

South Africa’s nuclear power plans clouded in secret deals


The Cabinet subcommittee on energy security is deep into the technical work needed to procure a massive nuclear fleet. Key to the procurement going ahead will be the financing arrangements, as the construction of nuclear plants has enormous capital costs.

While the Nuclear Energy Policy for SA of 2008 designates Eskom as the “owner and operator of nuclear power plants in SA”, department acting director-general Wolsey Barnard said recently that both Eskom’s financial circumstances and the availability of alternative financing arrangements for energy meant this would have to change.

“The nuclear policy has not yet changed, but what needs to be realised is that the financial position of Eskom has deteriorated since 2008 and to expose Eskom to such a project at this stage would not be sustainable. ……..

Insufficient consultation

Though the government feels confident that public opinion has been taken into account, neither business nor labour agrees that consultation has been sufficient.

The National Development Plan urged caution on nuclear power, saying other options — such as natural gas — should be explored first.

Business Unity SA (Busa) acting CEO Cas Coovadia said “an effective debate on our energy options in the long term” was urgently required. Busa is working to draft an energy policy both for SA’s immediate and long-term needs, he said.

National Union of Mineworkers general secretary Frans Baleni, whose union is a leading opponent of nuclear energy in the Congress of South African Trade Unions, said the union was dead-against nuclear power over safety and cost issues.

“As a country we have not had a dialogue on nuclear power. The process is not transparent and will be easily corrupted. It will make the arms deal look like a Sunday picnic. And the National Development Plan (NDP) is not positive on nuclear. Government can’t pick and choose on the NDP; if they do it is not a plan,” said Mr Baleni……….

Eskom spokesman on nuclear power Tony Stott. said there would be another opportunity for comment through the National Nuclear Regulator’s and Nersa’s licensing processes.

However, these will be long after the contracting is completed.

September 17, 2014 Posted by | politics, South Africa | Leave a comment

South Africa’s very suspect plan for vendor-financed nuclear power

flag-S.Africa A nuclear tale that sounds too good to be true Business Day BY CAROL PATON, 15 SEPTEMBER 2014, BUILD now, pay much later. That is the good news story about nuclear energy being told to SA’s decision-makers. In this model, a nuclear vendor and a financier — usually the government of the country of the vendor or a state-owned enterprise or bank — come as a package. The loan from the financier is repaid from the electricity tariff over the long term, 15 to 20 years, and repayments begin when electricity is produced.

This is the simple picture, which has given rise to the perhaps apocryphal story in which a very senior member of the executive told Treasury officials after meeting his Russian counterparts: “We don’t need to pay for it!”

The vendor-financed option has made the scary R1-trillion price tag, wielded by Department of Energy and Treasury officials as a warning to their political principals, disappear in a puff of smoke. The nuclear option appears even more attractive when vendors move onto the next part of the story: as operating costs for nuclear energy are low, and the expense lies in construction, once the loan is repaid, energy becomes a virtual “cash cow” for the operator, and any private investors, for up to 30 years………

The clear frontrunners in this are French company Areva and Russian state-owned enterprise Rosatom. Both offer technology and finance in one package, with some differences. At the heart of both is a power purchase agreement in which the operator of the grid, Eskom, would make an irrevocable commitment to purchase the electricity at an agreed tariff………

An important part of the financing package for vendors interested in SA is the government’s commitment in the nuclear policy of 2008 to a fleet approach. Vendors are able to offer better prices if a fleet of reactors is procured as they get better at building them. Some vendors will not consider SA at all without a fleet procurement.


This is what lies behind SA’s curious decision in the IRP 2010, SA’s electricity plan, to include 9,600MW of nuclear power in the energy mix. This would amount to a fleet of six Areva reactors (or more, if other vendors with smaller reactors are selected). As electricity demand is far from certain, and has not grown as expected over the past two years or more, overbuilding capacity is a risk.

Independent analysts, such as Prof Harald Winkler of the University of Cape Town, argue that even a nuclear fleet would be more expensive than other options and would lock SA into even higher electricity prices with negative effects on the economy.

Costs such as insurance in the event of a nuclear accident, dealing with the waste, and decommissioning the plant, are not built into the construction prices.

The conclusion of all of this is that the magnitude of the government guarantees required in a R400bn-R800bn nuclear plant building exercise remain very difficult to estimate. Whatever the size of the guarantee and its purpose — for construction or as a guarantee to purchase the power — it would have to find its way onto SA’s contingent liabilities……..

Despite the good “build now, pay later” message being punted by nuclear vendors, the probability is that it will be business and consumers that not only pay later, but pay much more.


September 17, 2014 Posted by | business and costs, politics, South Africa | Leave a comment

UN and Denmark help boost Renewable Energy Technology Transfer between China and Ghana and Zambia

renewable-energy-world-SmNew initiative boosts Renewable Energy Technology Transfer between China and Ghana and Zambia with UNDP and Danish Development Assistance as catalysts Jakarta Post  BEIJING, Aug. 19, 2014 /PRNewswire/ — A milestone partnership was forged today inBeijing between China, Denmark, Ghana, Zambia and UNDP with the signing of a project agreement for Renewable Energy Technology Transfer.

This project is one of the first examples of triangular South-South cooperation betweenChina and Africa with support from a donor. Its objective is to ensure that Chinese renewable energy technologies are optimally responding to priorities and needs inGhana and Zambia, and critical skills are also transferred and developed to make the technologies actually work on the ground. This approach will have a tremendous impact on increasing access to energy for the rural poor in the two countries, and for other developing countries interested in such cooperation withChina in the future.
The project is part of the UNDP-China agreement for Strengthened Partnership signed in 2010 to promote South-South cooperation through innovative programmes. “UNDP is pleased to embark on this cooperation and is committed to making projects more impactful and more sustainable by providing ‘software’ support with the transfer of renewable energy technologies, rather than just relying on the traditional hardware of equipment or infrastructure,” said Xu Haoliang, UN Assistant Secretary-General, UNDP Director of the Regional Bureau ofAsia and Pacific
The Government of Denmark provided funding for the initial formulation of the project and a contribution of29.25 million DKK, equivalent of US$ 5.4 million, to UNDP for its implementation inGhana and Zambia. This implementation will be led by the Government of the two countries with the Ministry of Sciences and Technology as the Chinese counterpart institution, and support from the UNDP offices inBeijing, Accra and Lusaka……..

The project will help with achieving the objective of Sustainable Energy for All (SE4ALL) of the UN Secretary- GeneralBan Ki-Moon by increasing access to energy through off-grid and community-based electrification. Support will not be in the form of hardware transfer but instead will focus on creating conditions required to make adoption of renewable energy technologies more effective, removing barriers and strengthening local capacities to respond to national priorities and meet local needs.  ……

UNDP partners with people at all levels of society to help build nations that can withstand crisis, and drive and sustain the kind of growth that improves the quality of life for everyone. On the ground in 177 countries and territories, we offer global perspective and local insight to help empower lives and build resilient

August 25, 2014 Posted by | AFRICA, renewable | Leave a comment


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