Eskom shelves new nuclear project

Friday, 5 December 2008

South African utility Eskom has announced that it will not proceed with construction of a second nuclear power plant at a cost of some $12 billion, citing financial constraints.
 

Koeberg looks likely to remain South Africa's only full-scale nuclear power plant for some time yet (Image: Eskom)

The company said that its board had decided not to proceed with the proposed project "due to the magnitude of the investment." As a result, Eskom has terminated the commercial procurement process to select the preferred bidder for the construction of the proposed plant. It said that the two bidders - the EPR consortium led by Areva of France and the N-Powerment consortium led by Westinghouse of the USA - have been informed of this decision.
 

Jacob Maroga, chief executive of Eskom, said: "The board has expressed its appreciation to the two bidders for their interest in the Eskom build program, and in particular their desire to participate in the nuclear industry in South Africa. We were impressed by their professionalism throughout the bid process. We thank them for their patience and understanding during the past few months."
 

In early 2007, Eskom's board approved a plan to boost electricity output to 80 GWe by 2025. This included the construction of 20 GWe of new nuclear capacity, which would see nuclear's contribution grow to 25% from the present 5%. The plan for the nuclear new-build program would kick-start with up to 4 GWe of pressurised water reactor (PWR) capacity, to be constructed from about 2010 with commissioning in 2016. Five sites in the Cape Province were under consideration to host the proposed 'Nuclear 1' project, although the most likely initial site would be that of Koeberg, where South Africa's only nuclear power plant of some 1900 MWe has been in operation for the past 22 years.
 

In addition to bidding in the tender for the first new nuclear power plant, Areva and Westinghouse have also offered to build the full 20 GWe - with a further ten large EPR units or 17 AP1000 units by 2025.
 

There has been much speculation recently about the project due to the global financial crisis and the continuing political turmoil in South Africa. After soliciting the bids in January this year, Eskom stated it would announce a preferred bidder in April. However, the decision was postponed until September, at which time came only silence on the subject. Insiders had suggested a decision would be postponed until after a general election in 2009, while doubts were voiced over finance.
 

Portia Molefe, director general of the Department of Public Enterprises, said that the government supported Eskom's decision not to go ahead with the plant's construction because "it is not affordable at this present juncture." However, she told Reuters, "The South African government remains committed to introducing nuclear because we have to deal with our carbon footprint and we have to diversify our energy mix."