The State of the Nation address 2016 (SONA 2016) commenced with more drama than most TV shows, but looking past this, it is important that we understand President Zuma’s speech. This speech not only marks the opening of Parliament for the year, it also highlights the industries that government plans to focus on for the coming year.
Last year we experienced the worst wide spread blackouts since 2008 and as a result many South Africans sat on the edge of their seats while waiting for the announcement on how government planned to keep the lights on for 2016.
Zuma stated “Progress has been made to stabilise the electricity supply. There has been no load shedding since August last year, which has brought relief to both households and industry alike.”
He added “Additional units from Ingula power station will be connected in 2017, even though some of them will begin synchronisation this year. The multiple bid windows of the Renewable Independent Power Producer Programme have attracted an investment of R194 billion.”
There is no surprise that Zuma announced that South Africa’s future energy mix will rely heavily on the expansion of nuclear energy. “Our plan is to introduce 9 600 megawatts of nuclear energy in the next decade, in addition to running Koeberg Nuclear Power Plant.” He added, “We will test the market to ascertain the true cost of building modern nuclear plants. Let me emphasise that we will only procure nuclear on a scale and pace that our country can afford.”
The President said that the IMF and the World Bank predict that the South African economy will grow by less than 1% in 2016. This less than desirable growth of the South African economy will influence the spending behaviours of households and the profitability of businesses.
The Integrated Resource Plan for Electricity 2010-2030 proposed transforming the South African energy generation mix from the current completely coal dominated one to a more balanced setup in 2030. The aim was that by then 10.3% and 10.7% would be allocated to wind and solar renewable energy technologies; and 12.7%, or 9 600 MW in generating capacity, to nuclear.
Conservative estimates into the costs involved say that the projected target would cost R500 billion, although experts say it is more likely to be over R1 trillion. Minister Joemat-Pettersson has said: “I cannot be responding to perceptions that we’re going to do this and it’s going to cost us one trillion. I don’t know where that figure came from, certainly not from us.” However, in an article on October 7, 2011, the Mail and Guardian stated that the Department of Energy, under then- Minister Dipuo Peters, had submitted its nuclear tender proposal to the Cabinet the previous month, and that South Africa was poised to issue the largest tender in its history with “an estimated R1trn contract to build six new nuclear reactors by 2030”. Talking to Bruce Whitefield on his talk show (Cape Talk and 702), Eskom CEO Brian Molefe confirmed that the cost of the nuclear build is estimated to be R1trn, with a payback time of 20 years.
Reflecting on SONA 2016, we have to examine if the nuclear expansion programme is truly the best solution for South Africa especially with the projected declining growth in South Africa’s economy.
The question we should be asking; are there alternatives and if so why isn’t this being highlighted as our energy plan going forward? The answer simply lies in the expansion of the renewable energy industry as opposed to nuclear.
The increased foreign investment in solar and wind projects can assist the economy with the growth that’s greatly needed. Each year the price of solar panels decreases, while the price of electricity increases. It will cost the government far less money to change legislation to allow for the feed-in tariff system to compensate consumers who have renewable energy systems, that feed back into the power grid, than the excessive investment in the nuclear plants.
Other countries have already looked at alternative, Germany being the forerunner. On 30 May 2011, the German government announced a plan to shut all nuclear reactors by 2022. Environment Minister Norbert Röttgen stated of the decision, “It’s definite. The latest end for the last three nuclear power plants is 2022. There will be no clause for revision.”
The solution to stabilise our energy industry is not the costly nuclear programme but rather investing in renewable energy industry.