By Richard Halsey
The recent climate negotiations in Paris set in place national commitments to reduce emissions. Electricity generation from burning coal is a major contributor, and in the long term coal needs to be phased out. This has prompted some support for nuclear as a climate-friendly alternative for electricity generation due to its low operational emissions. However, there are inherent problems with nuclear plants, including: high construction cost, radioactive waste, decommissioning requirements, long construction time and disaster management plans. There are further issues, such as making the facility resistant to terrorist attack by aircraft, which add to the cost, and are simply not necessary in other modes of electricity generation.
South Africa’s Integrated Resource Plan (IRP) from 2010 suggested that 9.6 GW of nuclear could form part of the national electricity mix by 2030. Six years later, and the updated IRP has still not been finalised and the conditions stipulated in the plan are no longer realistic. Despite this, Government continues with the recommendations from 2010 as its mandate.
Essentially, the Department of Energy (DoE) has been operating in a policy vacuum, with the nuclear procurement programme prompting a complaint with the Public Protector, and a court case is in progress. These fundamentally critical issues have also been noted by energy expert Chris Yelland: “there should be a transparent update every year of the Integrated Energy Plan (IEP) and the Integrated Resource Plan for Electricity (IRP). Yet we do not even have the first IEP published, despite the legal requirement since 2008 for the minister of energy to publish an IEP annually. The IRP 2010-2030 and the assumptions upon which it is based are completely out of date; the 2013 draft update has been ignored and it is now 2016. Apparently yet another IRP update is in progress – who knows by whom or when, in a secretive manner lacking in any vestige of transparency.
Aside from policy concerns, there has been widespread apprehension over the cost of the nuclear build. Essentially, Treasury do not have an answer, which is disturbing, considering international nuclear procurement deals have already been signed. Moreover, another key issue that lacks clarity, is what effect this nuclear investment will have on the long term price of electricity. This is partly due to secrecy from Government, and also a lack of current and relevant research in this regard. However, the Energy Research Centre (ERC) at the University of Cape Town recently released a study that examined what macro-economic effects this commitment to build 9.6 GW of nuclear would have against a flexible approach which aims to minimise overall costs while meeting electricity demand. This flexible plan does not preclude nuclear, but only allows it to be introduced if and when prudent.
This is important research because it is specific to our country and the current plan government seems intent on pursuing. The study investigates the implications of the proposed 9.6GW build on both the national economy and domestic factors such as household spending and welfare.
The study was divided into two scenarios. The first assumes a realistic “best case for nuclear”: a future with advantageous nuclear parameters, high costs for renewables, no gas or hydro alternatives and high electricity demand. The second assumes a “worst case for nuclear”: where the assumptions are essentially reversed; a future of less favourable nuclear parameters, affordable energy alternatives and lower economic growth.
In each case, the outcome of a forced nuclear build is compared with flexible planning. In the first scenario, there was no significant impact on the economy comparing the nuclear commitment with a flexible approach. However, in the second scenario, electricity prices will be 20 percent higher in 2040, up to 75 000 jobs could be lost and welfare will decrease, as a result of committing to nuclear rather than flexibility.
No one knows how the future will unfold, but it is possible to make analyses of what is more likely. By modelling 1000 different scenarios, using Monte Carlo simulations, the researchers of the study concluded that it is less likely that conditions in the future will favour promotion of nuclear power. In fact, by having the 9.6 GW nuclear build, there is a 94 percent chance that electricity prices will be higher by 2030 than if we were to adopt a flexible approach. “Our results show that there is no economic case to be made for a firm commitment to commissioning a full fleet of 9.6GW of nuclear power by 2030.”
This is critical information for the South African public. In the debate around nuclear, we now have a rigorous study that examined our exact situation and concluded that it does not make economic sense to forge ahead with the nuclear build at this stage. Furthermore, the DoE has been pushing for the procurement process to happen as fast as possible, and yet the IRP hasn’t even been finalised. As the ERC study states: “…there is no rush in terms of making this decision, and there is no justification for making a commitment of this scale at this time”.
An over-investment in nuclear will decrease our ability to invest in small scale and more cost effective technologies. It is a classic case of putting all our eggs in one basket, and the ERC data suggests that it is the wrong basket.
So why is government pushing so hard for it?
The argument for nuclear from a climate change mitigation standpoint is weak. There are simply better options. Renewable energy solves the emission problem without the inherent issues associated with nuclear. We have much better solar and wind resources than most countries in Europe, which have already demonstrated its viability. Renewables have been criticized for their intermittency, but energy storage technology continues to improve. Coupled with smart grids it is certainly possible for renewable energy to provide base load power. In fact, renewables can do far more, Uruguay now gets 95% of its electricity from renewable resources (and the price of electricity has decreased). The Uruguayan energy revolution also happened in about ten years, which is less time than it typically takes to build a nuclear reactor. So, with the correct political will, renewables can certainly provide the majority of our electricity generation requirements. It is no longer the dream of environmentalists. In 2015, the global investment in this sector was USD 286 billion resulting in 134 GW of additional capacity. This was more than all large scale hydro, coal, gas and nuclear capacity for 2015, combined.
South Africa already has a burgeoning renewable energy market. Indeed, the Renewable Energy Independent Power Producers Procurement Programme (REIPPPP) has made great strides, even by international standards. These projects have already procured 6 300 MW of renewable-energy capacity since 2011. Furthermore, the increasing adoption of solar photovoltaics, biogas and cogeneration by the residential and industrial sectors is also reducing electricity demand from the grid. Energy efficiency programmes have the same effect, and are cheaper than building new generation facilities. So, as coal is phased out to meet our emission reduction requirements, renewables and energy efficiency are well placed to make sure our electricity needs are still met.
So if there are better options from both a climate change and economic point of view, we must again ask why our government is pushing for this 9.6 GW nuclear build. Who really stands to benefit? Vested interests and out-of-date policy documents are not justification enough.
Richard Halsey is a member of Project 90 by 2030’s Policy & Research team