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S.Africa: opportunity for nuclear entrepreneurs

Thu, 04/26/2012 - 7:13am
DONNA BRYSON - Associated Press - Associated Press

Power-starved South Africa plans to increase its nuclear reactor capacity and energy companies from around the world are lining up to be involved.

The project has an estimated cost of 300 billion rand (more than $40 million), South African Energy Minister Dipuo Peters said, but it is still unclear what contracts will be offered or how much of the business will be set aside for local companies.

South Africa is the only country in Africa with a nuclear power plant, the two-reactor Koeberg facility near Cape Town that has been operating since 1984. It is committed to building at least six more reactors at three or four sites by 2030 as part of a plan to decrease its dependence on electricity plants that run on greenhouse gas-emitting coal.

South Africa now depends on the coal plants for at least 90 percent of its energy needs, and Eskom, the state electricity utility, also is a major supplier to South Africa's neighbors.

An energy crisis in 2008 blamed on poor planning led to frequent and widespread blackouts that hit output in mining and other key industries. The government fears energy supplies will be tight for the next few years, hobbling its efforts to expand the economy and create jobs in a country where a quarter of the work force is unemployed.

South Africa wants to build local skills and local business as it expands its nuclear capacity, Peters said.

"It is not just about building power plants, but how we build them," she said at a nuclear seminar organized by a labor group. "We are not about to turn South Africans into mixers of concrete."

Peters presented the plans for the reactors, along with those for wind and solar plants, just days after a quake and tsunami hit Japan in March 2011, sending three reactors at the Fukushima Dai-ichi nuclear plant into meltdown there. Germany permanently shut down one of its aging reactors because of what happened at Fukushima. But Peters said she was confident the new nuclear technology South Africa planned to import was safe. No serious incidents have been reported at Koeberg during its 28 years in operation.

South Africa's nuclear program, though, has had setbacks, including a failed effort with America's Westinghouse to develop next-generation reactors. The multibillion rand (dollar) project missed several deadlines before it was abandoned, and prospects for customers were uncertain.

South Africa is not alone in forging ahead with nuclear projects following Fukushima. Turkey went ahead with plans to build its first nuclear power plant after Fukushima. And even as Japanese engineers were fighting to cool reactors, officials from Russia and Belarus were signing a deal for a $9.4 billion nuclear plant in Belarus.

South Africa is "one of several significant prospects on the radar," said Ian Hore-Lacy, spokesman for the London-based World Nuclear Association, which represents the industry.

American and French companies involved in building Koeberg may have an advantage when it comes to involvement in South Africa's nuclear buildup because of their long-standing relationships, Hore-Lacy said in a telephone interview. But he said Russian, Chinese and other companies can't be discounted in the race for nuclear business here.

Russia's State Atomic Energy Corporation, known as Rosatom, has been among the most active in seeking South African business. Rosatom held a seminar in Johannesburg in early April to introduce itself to the South African government and business officials, and sent a vice president back later in April for more talks.

Alexey Kalinin, head of Rosatom's foreign operations, said his company would get as much as 60 percent of supplies for projects in South Africa from South African companies. He said that could mean more than $15 billion in earnings for South African companies, $3.4 billion in tax revenues for the South African government, and 15,000 new jobs. He also said Rosatom was ready to draw South African companies into its global supply chain.

Rosatom's Kalinin said his company was looking ahead to helping Nigeria develop a nuclear industry, and already was involved in uranium exploration and mining in Tanzania and Namibia.

South Africa "can be indeed regarded as a possible gateway to other African countries and a driver of nuclear energy development in the region," Kalinin said.

Such expansion is just what Yves Marignac, a Paris-based energy expert and anti-nuclear campaigner, fears. He would rather see developing countries taking the lead in exploiting safe, clean renewable energy sources like wind and solar. South African officials say renewables alone can't deliver enough energy.

Marignac, speaking in a telephone interview, also said he is concerned the nuclear energy industry may be pushing new markets to sign contracts before all the questions raised by the Japanese crisis are answered, and those answers turned into safer — and likely more expensive — technology.

"South Africa is probably one of the next big chances for the nuclear companies trying to sell reactors in the world," said Marignac, who sees a race between "the ability of the companies to acquire new contracts ... and the ability of the international community to develop new standards."

Peters, South Africa's energy minister, said she won't be rushed, and that safety is a top priority.

She also said South Africa is interested not just in building new reactors, but in developing an entire cycle, from mining more of its uranium resources to nuclear waste management. That presents a range of opportunities for foreign companies, as well as the possibility of South Africa one day exporting its own nuclear know-how.

Peters has faced challenges from South Africa's powerful labor movement, concerned she is not choosing the energy options that will create the most jobs, and from a nascent South African anti-nuclear movement.

"We as South Africa are convinced that we need an energy mix," Peters said. "We cannot discard any technology."

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