Nuclear trumps shale and gas

The signing in Vienna – at the margins of the 58th session of the International Atomic Energy Agency General Conference – of a strategic nuclear partnership between Russia and South Africa, has met with criticism from the mining sector.

The agreement lays the foundation for a large-scale nuclear power plant 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 9,6 GW or 8 units.

These will be the first based on the Russian technology to be built on the African continent.

The signed agreement provides for comprehensive collaboration in other areas of nuclear power, including the construction of a Russian-technology based multipurpose research reactor, assistance in the development of South African nuclear infrastructure, and education of South African nuclear specialists.

The creation of new highly-skilled workplaces will also allow South African companies to further participate in Rosatom’s projects in third countries.

South Africa’s industry will become dependent on sources other than shale and coal, critics say. While industry and certain role players obsess about shale and gas, Mozambique’s gas resources will also need expensive infrastructure.

The questionable benefits that shale gas might offer, will be short-lived, unlike nuclear.

This agreement would naturally limit South Africa’s importation of energy from Namibia or Mozambique.

Also, this will probably mean an end to preferential electricity contracts that offer power at a rate far below the level other industrial users pay, to companies like BHP Billiton.

The R9,5bn lost in embedded derivatives, as reported by Eskom, is the cost of the remaining time on these preferential electricity contracts, some of which still have years to run.

Other energy sources will be hydroelectric power from the future Inga III dam in the Democratic Republic of Congo.

South Africa’s nuclear power ambitions had attracted several proposals.

French group Areva, which built South Africa’s only nuclear plant at Koeberg, had proposed to provide the country with its new generation of EPR reactors.

Government had also solicited an offer from the US-Japanese group Westinghouse.