Nuclear power plans doomed
On Tuesday South Africa was rattled by another shock cabinet reshuffle - the second this year. This time President Jacob Zuma replaced the incumbent energy minister Mmamoloko Kubayi with one of his closest lieutenants, former state security minister David Mahlobo.
Analysts immediately recognised this as a final, desperate bid to realise a more-and-more irrational new nuclear power build programme.
Mahlobo’s appointment accentuates an increasingly vicious battle over the country’s lucrative energy sector. The renewables programme has been deliberately stalled. The national power utility Eskom is experiencing a leadership meltdown while suffocating in a web of corruption.
All this is happening under the Sword of Damocles of a proposed nuclear power expansion programme plagued by controversy - and which has the potential to bankrupt the country.
The immediate public reaction, shared by several commentators, is that Mahlobo will be moving swiftly to sweep aside all opposition and bulldoze through the unaffordable nuclear deal in a matter of months.
Contrary to these views, it is argued here that Zuma’s move effectively kills any possibility of nuclear development coming to fruition in the next few decades.
It is, however, probable that the ministerial redeployment is a precursor to a bonanza of wasteful projects and activities rationalised as “development work” towards the nuclear build.
The terrain is likely to become fertile for another round of crony contract opportunities and fiscal looting now referred to as state capture.
Why is it safe to say that the nuclear build will not materialise?
It should first of all be noted that the construction of a new nuclear plant is a massive undertaking. It requires sustained government support as well as majority public acceptance over a period of at least a decade - that is how long the planning process and construction typically take.
A vast number of nuclear builds have been aborted elsewhere in the world following government changes or unexpected financial shortfalls. There are even completed plants that have never been in operation.
In South Africa there is no broad public support of new nuclear plants and every possibility of a future government (ANC-led or other) canning a nuclear build. There will be almost no alternative to this, given the precarious financial state the country would find itself in if it were to opt for nuclear.
Importantly, just a few days ago, South Africa’s Minister of Finance Malusi Gigaba - viewed by many as a Zuma enabler - made a largely unnoticed statement about the nuclear build that surprised many.
He said in an interview with the national broadcaster that South Africa “cannot proceed with [the nuclear build] programme at the present moment until the economy has grown sufficiently”.
Under normal circumstances Gigaba’s statement wouldn’t be noteworthy. Economists have argued all along that South Africa cannot afford a massively expensive nuclear build. But in the current context the statement amounts to a bombshell.
Two well-regarded previous finance ministers - Nhlanhla Nene and Pravin Gordhan - controversially lost their positions over what many commentators believed was their reluctance to support the nuclear expansion.
If the president cannot even convince allies like Gigaba that new nuclear is desirable, then what chance is there that an increasingly critical and restless public will buy into this misconception.
An equally serious obstacle is the increasingly negative perception of the nuclear megaproject. It has reached the point where much of the public now equates all things nuclear with corruption.
Zuma has brought this on the nuclear sector through his inexplicable blind support of nuclear expansion. It is now common knowledge that he was instrumental in ensuring that the Russian government, through its nuclear agency Rosatom, became the undisputed front-runner in the bid to secure the build.
He stewarded the signing of an astounding intergovernmental agreement (now declared illegal) that effectively assigned the build to Russia under shockingly unfavourable terms.
Since then the entire nuclear build programme has been tarnished by sleaze, with understandable speculation that the programme would be manipulated to favour presidential associates.
This view intensified when the first recipient of contracts linked to new nuclear was the son of a well-known KZN Zuma benefactor. At the same time reports emerged that the controversial Gupta family stood to gain from nuclear power by means of a newly acquired uranium mine.
In view of this background, there has been speculation for some time that Zuma would do whatever is necessary to conclude a deal before his tenure as leader of the ANC ends this December, alternatively before his stint as president of the country ends at the end of 2019.
The Mahlobo appointment confirms these suspicions.
However, the fact that the president is now increasingly isolated, even within his party, complicates even further any remaining attempts to kick-start the nuclear build. All efforts to rationalise new nuclear amid these political shenanigans are going to be dismissed with contempt.
Aside from the preference of Russia and the suspicion of corruption, other important factors also contributed to the significant erosion of support for nuclear. It is worth recounting these here.
The 2010 version of the Integrated Resource Plan, which set out the South Africa’s energy needs provided for 9600MW of new nuclear capacity, translating to about 20% of the electricity production envisaged in 2030. But the energy landscape has since changed radically:
The draft 2016 energy plan shows that new nuclear will not be necessary until 2037. This is partly because demand for energy is slowing, rather than growing, as had initially been assumed.
The cost of alternative renewable energy has dropped dramatically, making these technologies cheaper than nuclear. The effect of this is reflected in a strong international trend toward more renewables and away from nuclear power.
The first South African solar and wind plants were completed in record time. In contrast, nuclear builds in other countries such as Finland, France and the US are plagued by massive cost and time overruns.
The nuclear power bidding process was thrown into disarray when a court invalidated a set of intergovernmental nuclear agreements, which now have to be renegotiated and be vetted by parliament. Furthermore, a mandatory proper public consultation process must now be followed.
These factors would make one assume that the nuclear industry would scupper its grand plans for new nuclear builds and refocus on maintaining and eventually decommissioning South Africa’s only existing nuclear plant at Koeberg, and developing the Pelindaba research and isotope production facility.
Instead, the nuclear lobby has upped its ante. Nuclear proponents have been more active than usual in the media, pleading the supposed virtues of their favoured technology.
This has included on-the-ground campaigning in the Eastern Cape district housing Thyspunt, until very recently the most likely build site. The lobby received visible support from two entities, these being the government’s Department of Energy and the recently much troubled and maligned Eskom.
But even the nuclear sector seems to have been caught off guard by the latest developments. The Eastern Cape lobby show was found to be wide off the mark when an environmental authorisation for new nuclear was instead granted for Duynefontein, adjacent to Koeberg.
The proclamation declared Thyspunt as the less preferred site, at the very least delaying any possible build there for a long time. On the other hand, an expansion of Koeberg is unthinkable given that it is located inside the Cape Town metro, where public opposition would be phenomenal.
Is this the end of nuclear? The coming months will signal whether the government-led initiative for more nuclear power is over, despite the drastic presidential intervention.
Key dates include the finance minister’s medium-term budget at the end of October.
While ruling out immediate nuclear investment, he could still make a substantial allocation for nuclear construction under the rubric of “development funding”.
This would highlight continued nuclear ambitions and partly appease the nuclear sector, but would also garner heavy criticism for creating a conduit for crony contracts.
One should also expect more court challenges from anti-nuclear organisations, for example to the environmental authorisation for the Koeberg expansion. The effort displayed by the state in these skirmishes will be indicative of its appetite for nuclear.
Then, of course, there is the much anticipated African National Congress December conference, which could also lead to a change in national priorities and the balance of power.
The final key date will be in February next year when the new minister of energy is expected to release his revised energy plan. If this confirms the major finding of the draft 2016 plan that no more nuclear is needed in the next 20 years, then the contest for new nuclear is delayed for a very long time.
Modifying the plan in favour of nuclear instead, would now lack any credibility in view for the controversy around the reshuffle. A sustained nuclear roll-out in such a climate of mistrust and public anger is completely unrealistic.
Any moves toward implementation will then be challenged vigorously. It may not happen immediately, but such a nuclear build
will eventually reach a standstill, permanently.
In summary, the desperate attempt to realise an unpopular and unaffordable nuclear build through the appointment to the energy portfolio of Zuma loyalist David Mahlobo is doomed to failure.
* Winkler is a professor of physics at the University of Johannesburg