Kelvin Kemm bemoans the decision to abandon the pebble bed modular reactor (PBMR), appearing to argue that South Africa was abandoning an investment programme that with more patience would have borne fruit. However, Kemm presents no evidence that the PBMR project was nearing fruition, he merely repeats the marketing "puff" that was given out a decade ago: that it is small, fits neatly into small grids and would be an export winner.
But after more than a decade and too much public money lost, nobody has been convinced. The evidence suggests that far from ditching a winner, Minister of Public Enterprises Barbara Hogan, faced with escalating cost estimates, ever lengthening time schedules and a deafening lack of interest from investors and customers, took an inevitable decision and one that the government should have had the courage to take at least eight years earlier.
When Eskom and the South African government adopted German PBMR technology in 1998, they were far too credulous to the claims of enthusiasts for a technology with, at best, a chequered history. More realistically, it was a technology that was tried and discarded by all the major civil nuclear design nations.
By 2002, the alarm bells should have been ringing even more loudly.
The project's only foreign customer and an important investor in the technology, US utility Exelon, pulled out.
The US safety regulator began to ask some very difficult questions about problems with the operation of a prototype plant of this design in Germany.
Two reports, commissioned by the South African government - one by an international panel of experts and one by PricewaterhouseCoopers - were pessimistic about the reactor's prospects. These reports were kept secret and ignored.
Eskom was by then becoming disillusioned with the technology but lacked the courage to make its concerns public. Despite these warnings, the South African government kept investing. Indeed, about 90 percent of the total amount spent came after 2002, nearly all of it from taxpayers.
By the time the programme was finally abandoned, the project was running about 25 years late and the estimated cost of a demonstration plant had gone up 10-fold. Westinghouse, the US-based partner in the project, had long since stopped investing in the project and, in May, abandoned any effort to continue with the technology.
In 2006, when Eskom and the government could no longer ignore the problems, they began to pursue imported nuclear technology but they were just as credulous to the claims of nuclear salesmen. The government claimed at that time that a new nuclear plant could be in operation no later than 2012, would cost $4 billion (R28bn) and would produce 20 gigawatts by 2025. When they received bids for the first two units, the lowest was more than double that and the tender was abandoned. It is now acknowledged that the earliest a new nuclear plant could be in operation is 2022.
The technology they favoured, the European pressurised water reactor supplied by France, is also in deep trouble. In the West the only experience is from two part-built units. One, Olkiluoto in Finland, was expected to take four years to build but after four years is running at least four years late and 90 percent over budget. The second, Flamanville in France, was running two years late after two years and was 50 percent over budget.
There is now talk of importing reactors from South Korea or China. However, Chinese reactors are based on the same design as Koeberg and it seems unlikely they could meet Western safety standards. South Korean technology is untested (only a year of construction at the first order in South Korea) and the Koreans admit their design would need expensive additions to meet European regulations. However, Eskom and the government seem oblivious to these problems.
Earlier this month, Eskom chief executive Brian Dames said: "South Africa also urgently needs to decide on its approach towards nuclear energy, which provides the best solution for meeting the country's long-term energy needs."
And Energy Minister Dipuo Peters said: "South Africa must consider using nuclear fuel to meet the country's power needs."
The PBMR debacle revealed weaknesses in the checks and balances in South African society that should have prevented this waste of public money. Parliament was ineffective in monitoring the huge public expenditure; regulatory bodies such as the National Energy Regulator of SA, the SA National Nuclear Regulator and the auditor-general were silent; and the media preferred to reproduce uncritically the press releases of the nuclear industry.
Now, South Africa risks repeating the errors behind the failed programme. This led to the waste of R9bn of public money and, equally important, a wasted decade during which options that could have helped South Africa achieve its goal of providing reliable, affordable and clean energy were neglected. The result is an electricity system that is becoming more and more expensive and unreliable. South Africa cannot afford to waste another decade on an option that is too expensive and will not deliver the power needed in time.
The one issue I can agree with Kemm on is that new reactor development in South Africa should take place using private money. If investors want to risk their own money developing new nuclear technologies, let them do so. Precious public funds, for which there are so many worthwhile uses, should not be gambled on high-risk speculative projects. My guess is that a queue of investors wanting to risk their own money picking up the pebble bed technology would not materialise.
Focus should shift to renewable energy
The earliest appearances of the pebble bed modular reactor (PBMR) initiative is described in an unpublished "Chronology of the pebble bed modular reactor", written by a former SA Atomic Energy Corporation employee, Johan Slabber. Unfortunately, this valuable article was once available on the PBMR Company website but was subsequently removed.
Slabber alleges that in April 1990 Armscor appointed Integrated Systems Technology (IST) to do a preliminary design and feasibility study on the technology as a potential source of propulsion in a nuclear submarine.
In March 1992, IST apparently received Armscor approval to investigate the commercial potential and this was when it was brought before Eskom. According to their own official website, Eskom had been "investigating the PBMR option since 1993".
The site claims that "by 1993 it had become clear that building a new traditional pressurised water reactor such as Koeberg would be prohibitively expensive", and that from July 1995, IST was appointed for a range of feasibility studies and a deal was signed between Eskom and IST to "build and license PBMR power plants in South Africa and other parts of the world".
Eskom's non-executive chair, Reuel Khoza, was at that time also the founding chair of investment holding company Co-ordinated Network Investments, which held a 29 percent stake in IST, one of the main beneficiaries of the R90m spent on the reactor's research and development.
Kelvin Kemm also stood to benefit from a promised 10 percent share in Silver Protea Technologies. On September 29, 2004, the Competition Tribunal cleared IST to delist from the JSE (and the necessity to report to the public), having been bought out by Ethos Private Equity.
After the 2004 elections, the new minister of public enterprises Alec Erwin came out in support of the PBMR, saying: "Government wants to produce between 4 000 megawatts and 5 000MW of power from pebble bed reactors in South Africa. This equates to between 25 and 30 PBMR reactors of 165MW each. The project is now factored into our future energy planning from about 2010 onwards."
By this time, the estimated costs of constructing the demonstration model for the PBMR alone had escalated from R1 billion in 1998 to about R16bn.
Thabang Makubire, a general manager at the PBMR Company, then found himself having to defend the project and desperately denied that they were "struggling to get international investment".
MPs demanded to know how long the "feasibility stage" of the project would last and when production would start. "There is not enough independent information on hand to evaluate the pebble bed project properly," complained one.
The results of an independent feasibility study by a group of international experts in 2002 had not yet been released to the public. Questions also arose about PBMR's safety in the US and Germany
It was further reported that the South African government planned to increase the nuclear share of power generation to "at least 30 percent by 2030, adding 20 000MW of generating capacity", including 24 PBMRs.
How does this all square with Kemm's assertions that "when the word 'nuclear' is mentioned all normal business logic seems to go out of the window"?
Kemm underplays the total projected cost for one small reactor (actually R16bn) with stadiums and coal-fired stations. But, if you were to take the simple, unaffected arithmetic route based on the actually published figures, then 24 reactors at R16n each would amount to R384bn, without counting the costs of uranium enrichment and fuel fabrication, nor of decommissioning and waste management.
As the London Financial Times pointed out, nuclear generation would remain uneconomic unless electricity prices rise or it receives state financial help, according to forecasts compiled by the government's energy review team.
It concluded that by 2020 nuclear power would remain more expensive than wind generation and about the same cost as energy from power stations burning specialist green energy crops.
Rather than fighting a rearguard action to resurrect a redundant and wasteful technology, therefore, Kemm would be well-advised to use his powerful influence to promote an investment in renewables.
PBMR project closure is a sad blow for SA
Kelvin Kemm makes a number of relevant points regarding the winding-down of the PBMR project in his article.
He mentions the fact that the development costs of the technology amounts to only about 75 percent of the spend on the football stadiums, which will provide very little ongoing benefit to the country. It is painfully obvious that our government is more concerned with projecting an affluent image abroad, rather than taking care of the very real needs of the people of the country and the continent.
The hysterical ravings of the anti-nuclear lobby are without merit, as properly managed nuclear power is the only viable means of providing the energy needed in the coming decades, if this country is to maintain any kind of manufacturing base and be competitive in world markets.
The call for renewable energy sources seems to ignore certain facts: solar panels can only function during daylight hours, and wind-powered generators are subject to the unpredictable vagaries of the weather. Both of these alternatives would also require vast areas of land to be set aside, and become eyesores in the process.
The only sensible source of renewable electrical energy is hydroelectric generation. Unfortunately, this was not included in the Lesotho Highlands Water Scheme. I am not an engineer, so perhaps someone with much greater technical expertise and familiarity with that project would care to comment on the reason for that omission.
Be that as it may, the construction of a vast coal-fired power station is a step in the wrong direction. The burning of coal, with its attendant pollution problems, cooling issues and transmission of power over long distances, with the consequent losses on the transmission lines, is ultimately going to cost this country dearly.
The budgeted R150 billion for its construction is bound to be inadequate. It would not be surprising to see it balloon to three of four times that amount before it finally comes on stream, several years in the future.
The closure of the PBMR project is a sad blow, as it leaves this country vulnerable to severe shortages of electricity in the medium to long term, and it degrades the effort to a futile exercise, when it could be valuable as a source of electricity and an exportable foreign-exchange earner. It would generate much more kudos than any number of football stadiums.