Business News 21.9.2016 04:09 pm

Molefe pitches for nuclear, warns of renewed power crisis

Eskom CEO Brian Molefe. Picture: Neil McCartney

Eskom CEO Brian Molefe. Picture: Neil McCartney

By 2030 ‘we will need energy from nuclear’ to avoid another power crisis, says Eskom CEO.

South Africa will return to dire electricity shortages by 2030 unless it enters the active planning stages of a nuclear power expansion programme soon, the utility’s CEO Brian Molefe said on Wednesday.

Speaking to MPs, Molefe said the missed deadlines and cost escalations that accompanied the construction of the Medupi and Kusile power stations came about because building began in a “knee-jerk” rush before the plans for the two coal-based power plants were completed.

This happened because Eskom’s initial warning of a looming power crisis in 1998 was ignored and delaying on nuclear would result in another crisis as early as 2028, he said.

“By 2030 we will need energy from nuclear. If we continue with the bickering that we are experiencing now, instead of doing something that is meaningful, in 2035 we will be back in the same position and that is our warning born out of bitter experience,” he told a select committee on public enterprises.

“Five to six years must go just into planning, and another five years into building. We must not make the same mistake we made with Kusile and Medupi and start building when we are not ready.”

Molefe told reporters on the sidelines of the meeting he believed that warnings about the cost implications for the country of a nuclear build were exaggerated, as the 80-year lifespan of nuclear reactors meant the enterprise would pay for itself.

“So you will find lenders,” he told reporters after the briefing.

Molefe stressed that the planning stage could be financed off the company’s balance sheet, and therefore Eskom was not seeking funding from National Treasury for nuclear power at this stage.

“We have not asked for public finance for nuclear, and we should be able to finance the planning stages off the balance sheet, you just need to be creative rather than letting our incompetence at structuring a proposal see us walking away from something that is actually feasible.”

Therefore, he added, Eskom’s next requirement from the finance ministry was for approval in terms of the Public Finance Management Act (PMFA) to proceed with the opening stages of the nuclear build.

“I don’t see any major reason to withhold PMFA approval. Treasury does not have a history of unreasonably withholding PMFA approval.”

Molefe was involved in a highly public spat with Finance Minister Pravin Gordhan last month over National Treasury’s demands for records of advance payments for coal to Tegeta, a company part owned by the Gupta family.

In December, Cabinet gave the go-ahead for the controversial plan to add an additional 9 600 megawatt of nuclear power to the grid and the department of energy is poised to issue requests for proposals. Deputy President Cyril Ramaphosa recently indicated that a final decision on whether to proceed would only be taken once these bids have been studied.

The finance ministry has confined its comments on the nuclear programme to saying it would be guided by what the country can afford.

There is a long-running political narrative however, that National Treasury is seen as a stumbling block by the chief proponents of nuclear procurement, including President Jacob Zuma.

Molefe said he could not weigh in on a debate that the procurement process was a ripe breeding ground for corruption.

“I am a not a politician, I cannot comment on corruption,” he said, adding that since he would be retired by the time the added nuclear capacity came on line, he should not viewed as suspect in that regard.

– African News Agency (ANA)

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