Nuclear international agreements with Korea; USA; Russian Federation, French Republic; People’s Republic of China

NCOP Economic and Business Development

21 October 2015
Chairperson: Mr E Makue (ANC, Gauteng)
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Meeting Summary

The Department of Energy (DOE) briefed the Committee on the Intergovernmental Agreements signed with various countries around the nuclear build programme. The first section of the presentation presented an overview of the background of the SA Nuclear Programme,  which began in 1985 with Koeberg. In 2011, an Integrated Resource Plan was endorsed by Cabinet with a combination of energy mixes. Nuclear would contribute 9.6Gw by 2030, and the first plant should be up and running by 2023. The Nuclear Energy Policy of 2008 still shaped South Africa’s vision for nuclear power. Agreements had been signed with five countries, and these provided for cooperation throughout every stage of the Nuclear New Build programme. These agreements laid the foundation for trade, exchange, nuclear technology as well as procurement. It was vitally important that each of these countries had signed nuclear non-proliferation agreements.

The nuclear build would provide base-load electricity to replace the retiring coal fleet and meet additional demands. It should provide certainty to investors and households. It would meet SA's international greenhouse gas emission commitments, to reduce carbon dioxide levels by 34% by the year 2020. This build programme would also spark the re-industrialisation of SA to meet economic growth and job creation objectives. It would develop skills and build local HR capabilities.

Members raised points around safety and pricing concerns, particularly whether the capital spend would not mean increased electricity prices in the near future. They asked for more details on the safety concerns, wondering if the new projects would be able to withstand the force of earthquakes such as those that had been so devastating in Japan. They also raised process concerns and wanted updates on procurement plans. A Member also requested details of the court action instituted against the DEO in relation to this policy, and its reaction to it. The DOE stated clearly that the Department was utilising past experience from Koeberg, the National Nuclear Regulator, international experience and the IAEA to make sure that the nuclear plants would be very safe and assured Members that nuclear technology was one of the safest in the world. The pricing concerns were noted, the DOE stated that the initial cost was extremely high but the design life of a nuclear plant was 80 years and the cost would be paid off after 20 years making it cheaper in the long run. Members asked to get copies of reports, asked if workshops had been held and wanted to know the stage at which the agreements were, as also the reasons why they were not all standardised. They wondered when procurement would  happen but the DOE assured Members that no procurement agreements had been signed as yet. 

Meeting report

International Nuclear Energy agreements with Russia, USA, China, USA and South Korea: Department of Energy briefing
Mr Zizamele Mbambo, Deputy Director General: Nuclear, Department of Energy, gave a background to the South African (SA) Nuclear Programme. In 1985 the 1.8Gw Koeberg nuclear plant was built, which was still fully operational. In 1998, Cabinet had approved a White Paper on Energy, which stated that nuclear energy remained an option for the future. In 2006, Eskom started a procurement process for a new nuclear programme but this was stopped in 2008, due to the financial crisis. In 2008, Cabinet endorsed the Nuclear Energy Policy in a process involving public consultation. In 2011, an Integrated Resource Plan (IRP) was endorsed by Cabinet, with a combination of energy mixes. Nuclear would contribute 9.6Gw by 2030 with the first plant up and running by 2023. The National Nuclear Energy Executive Coordination Committee was established by Cabinet in 2011. The 2030 plan was endorsed by Cabinet in 2012. In 2013, the Department of Energy (DOE) was appointed as Procuring Agency. In 2014, an Emergency Preparedness Review Mission was completed and the National Radioactive Waste Disposal Institute was set up. Also in 2014, inter-governmental agreements with Russia, France and China were signed. SA’s vision was to become autonomous in nuclear energy from the beginning to end of the value chain.

The Nuclear Energy Policy of 2008 still shapes South Africa’s vision for nuclear power. The intergovernmental agreements (IGAs) had been signed with five vendor countries and provided co-operation to cover the entire Nuclear New Build programme. The agreement laid the foundation for trade, exchange, nuclear technology and procurement. It was vitally important that each of these countries must have signed nuclear non-proliferation agreements.

He went through what each of the partners would be contributing. Russia had agreed to assist in design, construction, operation and decommissioning of the nuclear units. Russia would also assist in the localisation of the manufacture of components for the nuclear units. France would assist in applied research and development, and also with accounting and physical protection of nuclear waste. China would assist with experience exchange, personnel training and enhancing infrastructure development. USA would assist in development design, construction, operational maintenance and use of reactors for reactor experiments. USA would also assist with health, safety and environmental considerations. South Korea would assist in the use of nuclear energy for electricity generation, heating and desalination of salt water, and in dealing with radioactive waste.

In relation to skills and development, it was noted that 50 trainees from the government nuclear industry had been sent to China and had now returned. Plans were under way to send an additional 250 trainees to China this year. Russia has offered 10 new scholarships for a Masters Degree in Nuclear Technology. There was a Memorandum of Understanding (MOU) to send another 200 students. South Korea had a standing programme to train SA students for a Masters Degree in Nuclear Engineering. France had provided 14 bursaries for previously disadvantaged groups of young people.  Another 400 SA engineers were already engaged in nuclear activities, involving job training.

Mr Thabane Zulu, Director General, Department of Energy, stated that this nuclear build would provide base-load electricity to replace the retiring coal fleet and meet additional demands. It would provide certainty to investors and households. I t would meet international greenhouse gas emission commitments by SA,  of reducing CO2 by 34%, by 2020. It would spark the re-industrialisation of SA to meet economic growth and job creation objectives. It would also develop skills and build local HR capabilities. Economic benefits linked to localising would be retained, and this build would also domesticate the nuclear programme. In the long run, it would contribute to building the knowledge economy.

Discussion
Mr W Faber (DA, Northern Cape) stated that according to the presentation, Canada and Japan were on the vendor parade,and asked why no agreements were signed. He also wanted to know why the agreements with Russia were different to those of other countries. He noted that Earth Life was taking the DOE to court over these agreements, and questioned on what basis this was being done.

He commented that the Committee needed to get these reports a few days before the meeting, and not on the day, as it was unacceptable to expect the Committee to deal with them without sufficient preparation time. These commitments would bind SA into expensive electricity prices in the future, which was very dangerous. He asked when the International Atomic Energy Agency (IAEA) report about SA’s readiness could be provided. He also pointed out that the IAEA stated that the National Nuclear Regulator should be involved first, then the DOE should get involved in the nuclear bid. He was concerned that the country seemed to be rushing into this bid and not doing it in the right order.

Mr M Rayi (ANC Eastern Cape) stated that normally the Department would run a workshop on technical topics like nuclear energy, and she wondered if this had been done. He commented that in the past, the issue had been raised that South Africa seemed to be only getting involved with Russia, but this encompassed other countries also. He asked what particular issues had been raised by opposition parties and environmental groups to this nuclear build programme. He was interested in how the waste would be addressed and when  the procurement process would start. Finally, it was suggested that the Committee Secretary should ask that the DOE brochure must also include the Committee Researcher’s comments.

Ms M Dikgale (ANC, Limpopo) commented that two countries IGAs were pending and wondered how many South Africa would need to partner with, to make this programme work. She said that quality of human life was important and hopefully the reactors would be safe without threat of earthquakes and volcanoes in SA. This project may lead to numerous jobs and assist the country. She supported this project. She asked why Members were not involved in the public consultation or hearings.

The Chairperson agreed that safety and pricing were the main issues, but wanted more detail on these points. He noted that nuclear was but one source of energy. The Ministerial Executive had given the DOE a directive to focus on hydro power. There were numerous people that were suffering from emissions from coal, and it was very important to reduce the use of coal. Another reason was that ash was produced and no-one knows what to do with this. Pollution had to be dealt with properly. Earthlife's main concern had been the  problems around the waste disposal of nuclear energy. This was not the first time that nuclear build had been brought up. A deal was almost signed in 2007. In relation to waste, some lessons had been learned from Koeberg. There was a need to provide more information and details on this nuclear programme, and he suggested that perhaps a brochure could be created. The economy was affected by the energy deficiency in SA. The manufacturing industry was being held back by the lack of energy.

Mr Mbambo responded on the safety of nuclear energy, and assured Members it was one of the safest types of energy. Whilst the risk of nuclear accidents was very limited, the current designs were much improved. The plants would be able to withstand these types of accidents. There was a very strong safety culture being developed in the community. For more than 50 years, Koeberg had operated safely. The National Nuclear Regulator (NNR) that applied safety benchmarks for SA would be part of the safety process. SA is part of the IAEA and applied these regulations and guidelines to the programme. There was a heavy licensing process for operating a nuclear power station. The operator had to convince the NNR why the power plant could be deemed safe. The nuclear facilities in SA would withstand the kinds of earthquakes that struck Japan, as they were tested. The DOE had taken the lessons learnt from all the incidents around the world and used them to improve the safety margins. Nuclear technology was one of the safest in the world.

He asked that he be allowed to refrain from commenting on the court case with Earth Life,  until the case had been heard.

In answer to the question “Why nuclear” he noted that this was one of the clean base-load suppliers of electricity. The design life was 60 years for nuclear power, but it could also be extended for another 20 years. Essentially therefore the asset would be one for the country, of 80 years duration. It was a fact that nuclear was very capital intensive. However, within 20 years, the capital investment would have been paid off so for the next 60 years it would come with nil capital cost, and for this reason it was in fact possible for it to produce cheap electricity, as it also had low maintenance and fuel costs, and tariffs could be reduced during the 60 years. This would be a cash cow. Koeberg was an efficient and effective power station.

Nuclear subsidised other forms of energy as it was very cheap in the long-run due to the long design life. SA was looking to create its own industry, which would provide localisation and job creation. It would also reduce the greenhouse gases in SA.

On the Russia topic, he said that each of the countries negotiated with SA uniquely and on their own terms. Each country discussed its own appetite to deal with SA on nuclear, which was why the agreements looked different. They were also dependent on the countries' own programme and experience – five or seven countries would be bound to have different programmes and capacities. Canada and Japan were in negotiation with SA, and this was in the final stages. They were invited to the parade in SA.

He asserted that the DOE had been very active in dealing with the public. The DOE was often issuing statements and holding meetings. The DOE held a press briefing once the agreement with Russia was signed. The procurement process had not started. Only IGAs have been signed with various countries that met SA’s needs. He explained that the process followed was that all countries would submit their proposals to SA and they would be interrogated. The IGAs were in the public domain. Seven countries had been identified and these agreements would be signed shortly. All the DOE needed was that Cabinet say that the procurement process can be opened. The funding model was the one technical hold up, but it would be presented to Cabinet and then the procurement process could start.

He noted that the IAEA provided guidelines to member states and then the countries could use their own internal guidelines. The NNR and NERSA were not involved in the process. It was a government-run and government-led programme. There were different phases of the nuclear programme. SA was the only country to ask the IAEA to come in and report when already running a nuclear plant. The report was received in 2013, and the recommendations in the report needed to go through various departments to implement them. The DOE had developed technical strategies and working committees to deal with these recommendations. All ten recommendations from the IAEA, and the progress made on these, had been provided to the public domain. The full report had not been released into the public domain, because there were still government processes that had to be followed first. However,  it should be released to the public by the end of the year. The Integrated Resource Plan (IRP) was approved, with input from the members of the public. Throughout the nuclear build programme, Members had been kept in the loop and included in discussions. Whenever there was an application to license a reactor, the public would be involved. There were sufficient legislative processes that involved the public in the build.

The meeting was adjourned.

 

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