South Africa delays long-term nuclear power plans

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A draft energy blueprint released on Tuesday postpones the nuclear option by seven years to 2037, in favor of initial capacity investments in gas, photovoltaic solart, zind and hydro power to supplement existing baseload power provision.

The government projects that by 2030, 1 gigawatt (GW) of power will be generated by hydro power and by 2050, over a third of installed capacity would be from wind and solar power.

The energy plan will be refined in March next year and then submitted to the cabinet for final sign-off.

Back to an earlier plan

Under the proposed new timeline, a new nuclear power plant - the country's second - is expected to come on stream in 2037, with a total 20,385 megawatts of nuclear energy - a rise in nuclear power output of 1,359 megawatts (MW) - added to the national grid by 2050.

That is according to the "base case" scenario outlined in a presentation on the Department of Energy's updated Integrated Resources Plan released in Cape Town on Tuesday.

The proposal also estimates an additional 37,400 megawatts of power from wind, 17,600 megawatts from solar plants, 35,292 megawatts from gas and 15,000 megawatts from coal by 2050.

Cost above all else

The government had previously said it wanted to generate 9,600 MW of energy from as many as eight reactors that should begin operating from 2023 and be completed by 2029, with price estimates ranging from $37 billion (34.8 billion euros) to $100 billion (94.1 billion euros).

Weak economic growth and spending concerns - with Pretoria threatened with a cut in the rand to junk by credit-rating companies - are believed to be the key factors behind the decision.

Zuma has championed the nuclear program, while Finance Minister Pravin Gordhan has cautioned that the country may be unable to afford new reactors at a time when the economy is barely growing and the budget deficit needs to be curbed to fend off a junk credit rating.

Moody's Investors Service and S&P Global Ratings, both due to deliver revised assessments on South Africa's debt in the next two weeks, have cited concerns over spending and rising debt. South Africa is ranked at the lowest investment grade level by S&P, while Moody's rates its debt one level higher.

Opponents of beleaguered President Jacob Zuma have also raised concerns about a lack of transparency in deals which could cost in the region of $80 billion.

Putin in on the act?

State power utility Eskom has said it will continue with an earlier target and listen to proposals from companies looking to build nuclear power plants, aiming to bring the company's first new nuclear plant online in 2025.

Meetings between Zuma and Russian President Vladimir Putin led to speculation that Russian state-run nuclear firm Rosatom had secured the deal, although South Africa's government and Rosatom both denied this.

Others potentially involved include Areva, EDF, Toshiba's Westinghouse Electric unit, China Guangdong Nuclear Power and Korea Electric Power.

Eskom operates Africa's only nuclear power plant - the 1,800-megawatt Koeberg facility near Cape Town, which began operating in 1984.

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