Australian news, and some related international items

Not likely that nuclear power procurement will ever be lawful for South Africa

Can any South African Nuclear Energy Procurement ever Succeed? Daily Maverick, DIRK DE VOS, 05 MAY 2017  Should the whole nuclear energy procurement process start up again, the few nuclear vendors that still remain should ask themselves: is it really worth the bother?

As most of us know, the recent Cape High Court decision in favour of the applicants, Earthlife Africa Johannesburg (ELA-JHB) and the Southern African Faith Communities’ Environment Institute (SAFCEI), to set aside nuclear procurement agreements was an utter thumping.

All South Africans owe a debt of gratitude especially since both NGO’s operate under significant financial constraints (donations can be made here) and for some, this was a replay of the David and Goliath story in the book of Samuel. Malcolm Gladwell’s take on that story is worth retelling…….

We are yet to see whether the new Minister of Energy will appeal the decision but it is hard to see how a “rematch” in any higher court will result in a different outcome.

Briefly, the court’s decision did two things. It set aside the previous Minister of Energy’s decision to proceed with the procurement of nuclear energy due to a number of flagrant departures from section 34 of the Electricity Regulation Act (ERA), which governs how such determinations should be made. It also set aside the Russian Nuclear Agreement as it should have – and did not – receive Parliamentary approval as required by section 231(2) of the Constitution. This agreement purported to create a number of obligations and liabilities for South Africa (including taking on all liabilities for a nuclear accident). The Constitution requires that these types of agreements with substantive impacts be approved by parliament. More basic framework co-operation agreements with the USA and South Korea – which, being of a more technical, administrative nature, did not require parliamentary approval – were also set aside on the basis that they were not tabled in parliament within a reasonable time, as required by section 231(3) of the Constitution.

The most striking thing about the judgment is not the decision itself, but just how underhand, dishonest and profoundly inept the government has been in the whole affair. In a sense, they were worse off than Goliath – it was almost a process of self-sabotage. “Oh well”, says the nuclear lobby and in particular, NECSA – which by the way has just secured 85% of the total budget of R787 million allocated to nuclear by the Department of Energy for the next financial year, “the court decision said nothing about the wisdom of procuring nuclear energy as such and South Africa should just start the nuclear procurement process from scratch”. That is true. The court’s decision was mostly about procedural matters, but it raises an important question: could procuring nuclear power ever be done legitimately in a way that satisfies the Constitution and the rule of law? It’s an important question because the answer should guide whether anyone, especially taxpayer-funded entities, should bother even trying.

The answer is no and this is why. The Constitution was not drafted to prevent South Africa from procuring nuclear power, but, given the state of the nuclear energy sector in 2017, it makes it extremely difficult, if not impossible. It is perhaps this very reality that has driven the underhandedness that we have seen.

The problem, at its core, is that the nuclear energy sector is selling a crap product. One could go on forever about why nuclear energy is a problem, but here are the main points:

Nuclear is very different from any other energy options

There are no nuclear vendors that are not state-owned. Without state ownership, the nuclear sector would not exist. That means procuring nuclear requires first the state-to-state type agreements whether in terms of section 231(2) or (3) of the Constitution annulled by the Cape High Court. Further, simply having nuclear energy, let alone procuring new nuclear, requires a whole separate and expensive regulatory system, participation in international bodies like the International Atomic Energy Agency, and funding a separate entity like Necsa. Nuclear energy costs South Africa nearly R800 million per year – a cost not typically included in the price of nuclear energy. Nuclear’s safety issues cannot be solved technologically; its safe operation requires constant vigilance from highly trained experts. Enormous decommissioning costs and the storing of spent fuel have not been resolved. Despite efforts to delink civilian nuclear from nuclear weapons proliferation, the risk remains. No other energy option needs any of this.

Nuclear is in decline everywhere……..

Nuclear is very expensive and therefore has to be very big…….  A scan through existing nuclear power projects in those parts of the world where independently-obtained information is possible, makes for sobering reading – including projects developed or sponsored by Rosatom. One consequence of the record of nuclear is that credit rating agencies hate them and shred the credit rating of any country that gets serious about procuring nuclear. Current estimates are that nuclear power is now twice as expensive – on a per kWh basis – as renewables, while renewables continue to fall in price.

There are other problems. Eskom is in a terrible state and that is a long-term problem that will have to be resolved in one way or another – probably through another taxpayer-funded bail-out or some type of privatisation…….

Any project with anything like a trillion-rand budget is simply not going to slip through and any hurdle not cleared is fatal for a nuclear procurement programme. The process requires a large amount of transparency and this is the nub of the problem for any nuclear deal……



May 6, 2017 - Posted by | Uncategorized

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