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Chris Yelland on the disadvantages of nuclear power for South Africa

Is nuclear the best option for SA? Flexibility is key in an unpredictable world. Money Web, Roger Lilley  /  1 June 2017  Eskom appears to be more concerned with building new nuclear power stations than in signing power purchase agreements with independent power producers that use renewable energy sources. Energize caught up with energy analyst and managing director of EE Publishers, Chris Yelland, for his opinion on what generation technologies South Africa should opt for.

…….CHRIS YELLAND:…..I am certainly not opposed to a nuclear new-build in South Africa on ideological or technology grounds. But there are real issues that both nuclear and renewable energy proponents must deal with. ….
Firstly, there are public perceptions of political motives, political interference and corruption associated with mega-project procurements. There are widespread public perceptions that things happen in secret behind closed doors, that due process is not being followed, and that there are some rather sinister motives. Whatever we think of these perceptions, whether they are true or not, they actually need to be dealt with.

The high, upfront capital costs, and associated financing and affordability of such mega-projects, is an issue, and one really has to deal with this issue, because it is one of the big drawbacks of nuclear.

We must also fully understand the levelised cost of electricity (LCOE) from nuclear power over the economic lifetime of the plant, taking into account the overnight capital cost, interest during construction, the fixed and variable operating, maintenance and fuel costs, and the costs of decommissioning and waste disposal. The LCOE indicates the overall cost, in R/kWh of the electricity delivered from a nuclear power plant, in order to be able to compare it properly on a similar basis with other technologies.

Nuclear power stations take a long time to build – up to ten to 12 years per reactor – and mega-projects are prone to high cost and time overruns. These realities cannot simply be ignored.South Africa needs flexibility in an uncertain and unpredictable world, where electricity demand is difficult to predict in the years ahead, and disruptive technologies are on the horizon. Technologies such as wind, solar PV and energy storage may change the rules of the game……..

A tipping point was reached as the price of wind and solar PV energy came crashing down. All of a sudden there are now lower-cost alternatives to new nuclear and new coal power. Nuclear is no longer the least-cost option, and a blend of wind, solar PV, gas and pumped storage can deliver reliable, despatchable, baseload power at lower cost than new nuclear and even new coal power…….

there’s the option of wind, solar PV, gas and pumped storage. This is a low carbon option, just as nuclear is a low carbon option. But it is also an option to deliver reliable, despatchable baseload power in a flexible way at lower cost than the nuclear option. This is what is termed “flexible power”…….

CHRIS YELLAND: In my view, the decline of the coal sector is inevitable, as the world moves away from coal to a cleaner, low-carbon future, both locally and globally.

We live in a global village, and South Africa simply cannot continue to burn coal regardless of the consequences to water use, pollution, health and climate change. The world is expecting us to move to cleaner options, and South Africa has made international commitments to do just this. We need to plan ahead and address these matters going forward. ……

The growth of rooftop solar PV in domestic, commercial and industrial applications has not been considered in the Draft IRP 2016 at all, and yet is a growing and inevitable reality, both globally and in South Africa.

The Department of Energy, Eskom and municipal electricity distributors ignore this growing alternative and supplement to conventional grid electricity at their peril. This is potentially a huge disruptor to the traditional business models of power utilities.

Customers are choosing cleaner and cheaper sources of energy to reduce both their costs and dependency on public utilities. Thus I expect very significant growth in this market as solar PV and battery storage prices continue to drop, while the price of grid electricity continues to rise.Utilities have to sit up and take note. Otherwise they may find themselves in a death spiral, where rising costs of grid power drive their customers away to alternatives. As people move to these alternatives in greater numbers, so the costs of the new alternative technologies come down due to increasing economies of scale. At the same time, in a vicious circle, this further pushes up the price of grid power, as utilities try to recover their fixed cost structure from declining kWh sales volumes.

This really needs to be taken seriously. It has happened in other parts of the world, and it’s not unthinkable that it could happen in South Africa. https://www.moneyweb.co.za/news/south-africa/nuclear-energy-the-best-option-for-south-africa/

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June 2, 2017 - Posted by | business and costs, South Africa

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