Thoughts on the optimal electricity-generation mix for SA

This is an edited version of a keynote presentation at the annual conference of the National Nuclear Regulator of South Africa in Johannesburg on 16 May 2018.

Nuclear power in South Africa was constructed in the 1980s, and has served South Africa well for the last 30 years. Only a decade ago, nuclear power used to be the cheapest non-CO2 emitting generation technology.

But no more. Today the levelised cost of electricity from new nuclear power, which takes into account the full capital cost, together with all fixed and variable operating and maintenance costs, its high load factor and its 60-year lifespan, is among the most expensive technologies per kWh of electricity delivered, compared to that from new coal, gas, wind and solar PV.

Going forward, we can now look to a blend of distributed wind, solar PV, gas and energy storage capacity to provide clean, reliable, despatchable, flexible and baseload generation capacity at least cost. This was not possible a decade ago.

The decisions required in the new Integrated Resource Plan (IRP) for the electricity generation mix of the future will be based on current and future technology costs and demand projections, and not on the past. Our decisions need to be forward thinking and not backward looking.

The real issues that the nuclear sector needs to face

I am not against nuclear technology per se. I believe nuclear technology is indeed clean, safe and non-CO2 emitting, and is well suited to coastal areas in South Africa where cooling water is abundant. If nuclear power was not safe, I know the National Nuclear Regulator would shut Koeberg down forthwith.

I too dream of cheap, safe, abundant, clean and flexible nuclear power, where the cost to the economy of nuclear energy is so low that it does not even need to be metered. This was the dream at the dawn of the nuclear age, and indeed it is still just a dream.

But if the nuclear industry wants to be taken seriously, it needs to turn its mind to the real “elephants in the room”, and face them openly and honestly, instead of simply trying to distract attention away from them, or act like an ostrich with its head in the sand, pretending the elephants out there simply do not exist.

Civil society, its NGOs, judges of high courts, the media and citizens of South Africa are not stupid. They can distinguish rational argument from propaganda, and can recognise correct and due process following the constitution and the law, as well as a lack of due process, maladministration, malfeasance and corruption.

In my view, the biggest nuclear elephant in the room is not the technology but the business case, including:

• The uncertainty of grid electricity demand in the years ahead.


• The large, complex, concentrated, mega-projects associated with nuclear power.


• The high financial and operational risks of nuclear power.


• The inflexibility of a nuclear construction programme.


• The long construction times, with high cost and time overruns.


• The very high upfront capital cost before the first kWh is produced (i.e. high overnight cost plus high interest during construction).


• The financing and funding difficulties – both public and private sector funding.


• The operational inflexibility of nuclear reactors, and the need to run nuclear reactors continuously at full load to achieve financial viability and to recover the high capex and finance costs.


• The long technology commitment required for nuclear power in an uncertain world with disruptive technologies emerging (wind, solar PV, energy storage, electric vehicles, distributed generation, smart grid).


• The need to procure a nuclear fleet, with a 100-year long commitment to a particular technology, vendor country, vendor and design, in order to get the price anywhere near sensible, and to achieve reasonable localisation.


• The vulnerability resulting from placing the country’s energy future in the hands of a foreign country/technology partner for a long time.


• The political interference and corruption prevalent with nuclear procurement, due to geopolitical and national security considerations, with associated secrecy and lack of transparency.

• The need for short construction times to provide construction flexibility and quick wins to meet uncertain demand.


• The need for multiple smaller, simpler projects, with multiple technologies and a variety of suppliers to mitigate risk.


• The need for cost and construction time certainty, without cost and time overruns.


• The need for private sector funding and financing to relieve the fiscus of this burden.


• The need for flexible generation capacity (such as gas-to-power and energy storage) to meet demand peaks and to compliment and provide back-up to low-cost variable generation (wind, solar PV).


• The need to be able to access both public and private sector funding.


• The need for low carbon emission generation technologies that enable South Africa to meet its carbon emission reduction commitments.


• The need for clean, low water use generation technologies that avoid ground, water and air pollution, and that meet South Africa’s environmental compliance regulations.


• The need for high job creation.

• There is too much inflexible base-load power in the mix at present.


• There is far too much (about 85%) coal-fired power in the mix at present.


• The renewable energy (wind and solar) capacity in the mix is very low at present, and the grid can accommodate much higher levels of renewable energy penetration.


• There is not enough flexible generation capacity in the mix, with no gas-to-power to speak of at present.


• The diesel driven open-cycle gas turbines in the mix at present need to be converted to gas fuel.