Here comes the nuclear IPP in SA

A consortium led by South African venture capitalist André Pienaar’s C5 Capital is currently doing a feasibility study for the first in a series of small modular nuclear reactors (SMRs) to be constructed in the Western Cape.

The independent power producer (IPP) hopes to get a licence from the National Nuclear Regulator next year and have it in operation within three years.

There is high interest among technological companies wanting to enter into long-term power purchase agreements for supply to their data centres, Pienaar said.

The consortium is considering the design of local nuclear company Stratek Global, which is based on 25 years of development and is a variation of the pebble bed modular reactor developed by an Eskom subsidiary before it was shut down when government withdrew its funding in 2010.

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South Africans who were part of the development team at the time have been sought after in the global nuclear industry and are said to be key to the current international race to finish the first commercial SMR.

US is powering ahead

One of the competitors is X-Energy in the US, with C5 as one of its biggest shareholders. It is busy constructing an SMR for Dow Chemicals in Texas and recently received contracts from the US departments of energy and defence. The defence contract is for a mobile micro reactor that will be used to provide electricity to US forces deployed in rugged conditions all over the world.

Pienaar says C5’s SMR-development plan can drive the revival of the South African nuclear industry. “The country still has the training programmes as well as an established strong regulatory system.”

He says SMRs and micro reactors are ideal for deployment in Africa to remote mining sites or to supply small cities.

The first reactor, which will consist of four units of 80 megawatts (MW) each, will cost about $500 million (R9 billion) and will ideally be situated on Eskom’s Koeberg site.

The price tag will come down with subsequent reactors, to between $250 million and $300 million (R4.5 billion and R5.5 billion), says Pienaar.

Eventually the consortium wants to establish a network totalling 1 800MW of generation capacity, equal to that of Koeberg.

Pienaar says it will strengthen the grid in the Western Cape, which is crucial as the risk of further disruptions at Koeberg increases.

ALSO READ: Risk of total shutdown of Eskom’s Koeberg continues to increase

The operating licences of both the Koeberg units lapse in July next year and constant delays in work required for an extension have raised concerns that one of both units may have to be shut down for an extended period.

According to Pienaar, negotiations are ongoing with several local banks – and Lesedi Nuclear, the biggest local engineering, procurement, and construction (EPC) company in the nuclear space, has confirmed that it is also in talks with C5.

Pienaar says building the first reactor on Eskom’s Koeberg site will save a lot of time, since the site has already been approved for the construction of the pebble bed modular reactor and the same site licence can be utilised.

The only other site licensed for an SMR is Pelindaba near Pretoria, belonging to the Nuclear Energy Corporation of South Africa (Necsa).

He says formal negotiations with Eskom will start as soon as the feasibility study has been completed.

Pros and cons

Nuclear generation is considered clean energy which is extremely reliable and consistent, with low operating cost.

The upfront cost of conventional nuclear is however prohibitive and construction is regularly way over budget and delayed by years.

In a recent paper on the status of SMR development globally, Lesedi Nuclear senior executive Derik Wolvaardt and Necsa chair Dave Nichols said SMRs are manufactured in factories and shipped to site, which expedites and simplifies construction. They are more affordable, with advanced passive safety features.

They consider SMRs as the ideal solution to replace Eskom’s ageing coal fleet as the power stations reach the end of their design lives.

SMRs require land the size of a football field and generation capacity varies from tens to a few hundred MW.

Worldwide, few SMRs are operational as yet. Russian nuclear company Rosatom’s floating Akademik Lomonosov, which has been supplying the town of Pevek in the arctic circle since 2019, has been in operation the longest.

The Stratek design uses helium as coolant and therefore, unlike conventional reactors, does not need to be close to big water sources. Its fuel is manufactured locally and comes in balls about the size of a cricket ball.

This article is republished from Moneyweb under a Creative Commons licence. Read the original article.