News and updates from the continent

SA to spend ‘up to R1-trillion’ on nuclear by 2030

SA to spend ‘up to R1-trillion’ on nuclear by 2030

May 19, 2015

On Tuesday 19 May 2015, South Africa’s Energy Minister Tina Joemat-Pettersson told Parliament that South Africa will have six new nuclear power plants by 2030, at a cost that will range between R400 billion and R1 trillion to build.

She added that South Africa will start the nuclear build programme in 2015, in a bid to generate an additional 9,600MW of electricity. “We expect to present the outcome of this procurement process to cabinet by year-end,” said Minister Joemat-Pettersson.

The Minister said the operation will be carried out in a fair and transparent manner and added that the country would re-establish its nuclear fuel cycle industry, which would include developing uranium enrichment plants and nuclear fuel production sites.

In her policy and budget vote speech, Minister Joemat-Pettersson also said that President Jacob Zuma will lead the Africa Day celebrations under the theme “We are Africa – Opening the doors of Learning and Culture from Cape to Cairo” on Sunday 24 May 2015 and that South Africa will also host the 25th Ordinary Session of the Assembly of the AU Summit. As part of this programme, the Heads of State and Government of the AU will visit the Safari 1 Research Reactor at NECSA in Pelindaba, as part of South Africa’s celebration of the 50th Anniversary of the SAFARI 1 Reactor.

The Minister’s speech continued:

South Africa will host the International Renewable Energy Conference from 3 to 7 October 2015 in Cape Town. Led by the South African National Energy Development Institute in partnership with REN 21, preparations for this Conference are well underway. Africa is hosting this landmark Conference for the first time, and we expect more than 6000 delegates, including over 100 Ministers responsible for energy and environmental affairs.

We want to encourage the energy sector to assist the DoE and SANEDI in making this conference a success. Your full support is required to make this a broad based international renewable energy event, with a distinct focus on Africa and its development.

His visit will further serve to highlight South Africa’s successes and efforts to harness the peaceful uses of nuclear energy for broader developmental purposes.

Africa is grappling with the challenges of sustainable development. South Africa is in a unique position to contribute towards the energy security of our own country and our continent through our diversified energy mix in general and our renewable programme in particular.

However, South Africa’s lack of timely coordination of our planning, alignment and implementation of our country’s energy programmes has created serious challenges for us. I want to reassure South Africans that the load shedding which prevails is receiving our highest priority for urgent resolution. Partnerships have been established between government, labour, business and civil society to find solutions to our problems, in keeping with the great spirit of our country. The 5 Point Plan was adopted by Cabinet as a blueprint for addressing our challenges.

Our government’s urgent response to load shedding has accelerated the finalisation of the much awaited Integrated Energy Plan. Once approved by Cabinet, the Integrated Energy Plan will be published as a policy document. This Plan will inform our future energy mix and prioritize policy interventions for future programmes within the energy sector.

Whilst energy policy development continues, we announced a package of energy supply and demand options last month. This will increase the independent power producer energy supply to the grid by means of renewable energy, coal, gas and co-generation by 17,000 Megawatts towards the end of 2022. An annual increase of 2,400 Megawatts of additional energy capacity will be added to the grid. Our current circumstances compel us to add a significant amount of electricity generation to the grid in a very short time.

The REIPPP programme has added to the energy supply capacity and electricity diversity in South Africa over a period of only three and a half years. Competitive energy prices have been achieved, with a distinct and meaningful possibility to make a real socio-economic difference in the communities where they are located.

From 2011, the department procured 5 243 MWs of Renewable Electricity in Bid Windows 1 to 4 and connected 37 projects, with a capacity of 1 827 Megawatt to the national grid. On average, 15% of this energy was delivered to the power system during system peak periods, alleviating pressure on the power system. The energy contribution should grow to approximately 7 000 Gigawatt hours per annum with the first 47 Renewable Energy IPPs fully operational and producing at full capacity by mid-2016.

Through the competitive procurement approach, the average per kilowatt hour tariff, in April 2014 terms, for onshore wind has declined by 55% to an average of 62 cents per unit and for solar PV by 76% to 79 cents per unit.

This programme has secured a commitment of about R170 billion in capital investment to the South African economy. South Africans own an average of 48% in all IPPs, with Black South Africans owning 28% of these projects. We are pleased to inform you about progress in this regard.

Pursuant to our earlier announcements, we have already submitted for concurrence to NERSA new determinations for an additional 6,300 Megawatts for the Renewable Energy IPP Procurement Programme, as well as 1,800 Megawatts for co-generation.

Co-generation supply of about 720 Megawatts has been secured through ESKOM. In addition, we have revised the approach in relation to the procurement of co-generation in line with the IRP to assist with the current electricity challenges. The RFP for the revised co-generation approach, totalling 1800 MW’s is on track for release to the market.

The announcement of the preferred bidders is expected in the third quarter of 2015. The new approach will ensure that the approval process is expedited and financial close accelerated. The REIPPP Request for Proposals for an additional 1800 MWs from existing Bid Submissions is on course for release to the market by June 2015. As previously indicated, this bidding process would be open to all unsuccessful Bidders from all previous Bid Windows which are ready for re-submission.

We will also announce the appointment of additional preferred bidders from Bid Window 4 in early June.

Projects under this programme have started to spend on their socio-economic development and enterprise development commitments. A spending pattern is unfolding, with most spending being allocated for education and skills development, health care, infrastructure, social housing improvements, amongst others.

The DoE is engaged in the re-design of the IPP Request for Proposals, paying particular attention to early, efficient and equitable benefits to communities; as well as to a greater local content approach that will strengthen industrialisation in South Africa.

To read the rest of her speech, click here

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