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Eskom procurement plan unchanged by lower capacity target
2016-11-25

South African utility Eskom will stick with its plan to invite this year applications from companies interested in building new nuclear plants. This is despite the government's newly announced aim to increase the country's nuclear capacity by 1359 MWe by 2037 - less and over a longer timeframe than the previously announced target.

The Department of Energy issued a draft Integrated Resource Plan (IRP) and Integrated Energy Plan (IEP) on 21 November after a Cabinet Decision of 2 November ordered their release for public consultation.

In a statement to a media briefing on the documents, the Department noted the IRP serves to guide the government's plan for electricity provision within the energy mix, while the IEP aims to guide future energy infrastructure investments over the period up to 2050, and identify and recommend policy options to shape the future energy landscape of the country.

According to the latest IRP's base case, 1359 MWe of new nuclear capacity would be built by 2037 and a total of 20,385 MWe by 2050.

The IRP for 2010-2030 had called for construction of 9600 MWe of new nuclear capacity - supplying 23% of the country's electricity - with the first reactor to come online by 2023.

 

Eskom's plan

Earlier this year Eskom - operator of the country's nuclear power plant at Koeberg - submitted site applications for nuclear installations at Thyspunt, in the Eastern Cape, and Duynefontein, in the Western Cape, to the country's National Nuclear Regulator. Koeberg is the only nuclear power plant on the entire African continent.

According to the latest IRP, nuclear capacity in South Africa would be increased by 20,385 MWe between 2037 and 2050. It also includes plans for 37,400 MWe and 17,600 MWe, respectively, of new wind and solar power capacity.

The Department attributed the lower target for new nuclear units to the availability of additional generating capacity, lower demand forecasts and changes in technology costs.

Eskom said it will still request proposals this year from companies looking to build plants given the long lead times of new nuclear units.

In a statement, the utility said it supports the development of a long-term energy and electricity plan for South Africa in the form of an IRP and IEP, for public comment.

Matshela Koko, group executive for generation at Eskom, said in the company statement: "We will register as an interested and affected party and submit our comments on the plans through the formal process."

Eskom said its current plans are closely aligned to a base case scenario that takes South Africa's carbon budget into consideration and annual constraints on bringing renewables into the grid. This scenario requires the first nuclear unit by 2026. The utility has therefore indicated it will go ahead with the RFP for nuclear by the end of December, "as all indications show 2026 is feasible to deliver the first unit".

Koko added: "Should these assumptions not hold and another scenario comes into play in March 2017, we will change accordingly."

 

Test the market

According to the latest IRP's base case + carbon budget + annual constraints on renewable energy, 1359 MWe of new nuclear capacity would be built by 2026 and 25,821 MWe by 2050. According to the base case + carbon budget + no annual constraints on renewable energy, 1359 MWe would be built by 2037 and 5436 MWe by 2050.

Following the media briefing yesterday, South African news agency Business Day reported that under the draft base case energy plan, gas and renewable energy will provide the biggest chunk of new installed capacity in the country by 2050. The plan envisages 20,000 MWe of new nuclear capacity being incorporated into the grid by 2037, with a price of $5.4 million per megawatt of nuclear energy used for the scenario planning, the news report added.

Koko attended the briefing where Energy Minister Tina Joemat-Pettersson released details of the IEP and IRP.

Business Day quoted Koko as saying a ten-year lead time would be required for the construction of new nuclear plants, which was why Eskom would proceed with its RFP for 9600 MWe nuclear procurement this year to test the market. He emphasised that testing the market was not the same as entering a contract.

Koko said the plan was to construct a number of small nuclear reactors: the first, of 1359 MWe, would be constructed by 2025; another of 2718 MWe by end-2027; one of 1359 MWe by end-2029; and another of 1,359 MWe by end-2030.

Eskom would aim for a levelised generation cost at or below 100 cents per kilowatt hour from nuclear to make it a viable option, Koko reportedly said.

"If it is higher than that it is not going to fly," he said.

  
 
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