The South African government is planning to order six nuclear reactors at an estimated cost of R1 trillion. What would the consequences of this be?
Before we can understand this, we need to have some other plan to compare it to, which requires an understanding of how electricity is generated in South Africa at the moment.
About 5% of our grid electricity comes from nuclear power, about 5% from hydro power, 0.02% from wind turbines, and none at all from solar power. The rest, about 90%, is from coal power stations.
The question facing the country is: which of these generation technologies should we spend money on next?
To get an idea of what is possible, it is useful to look at what has already been achieved in some other countries. Germany generates about 20% of its electricity from renewable sources. Spain produced 11.5% of its electricity from wind in 2008, and this increased to 16% of demand in 2010. Portugal now produces over 40% of its electricity from renewables. In 2009 the USA used renewables and hydro power to generate nearly twice the total electricity demand in South Africa in the same year.
So it seems clear what the first step should be in South Africa: increase the amount of electricity generated from wind and solar technologies from the current base of 0%. Once we see this component reach about 20%, we will need to look at things which are new to South Africa, such as smart grids and energy storage. But since we are currently at about 0% electricity from wind and solar sources, this will not be an issue in the near future. Also, distributing wind farms around the country ensures that when there is no wind in one area, wind farms in other areas will be generating power.
So back to the question: what would be the effect of allocating R1 trillion to nuclear power stations? It’s important to note that nuclear power stations are huge in terms of capital investment and time to build. It is not possible to build a small one quickly, just to see how well it works. The minimum commitment is probably about R200 billion, and about 15 years to build. In contrast, a 100 MW wind farm could be built for R1 billion, and the first power could be fed into the grid in about one year. According to Eskom’s figures, this means wind power is cheaper than nuclear power.
Of course, the estimated cost is unlikely to be the final cost, as cost and time overruns are common with projects of this size. The infamous arms deal is an example: the original estimated cost was R4 billion, which has risen to over 10 times that. The 2010 soccer stadiums also all ended up costing significantly more than the initial estimates. We cannot be certain of what the eventual cost would be, but we can be sure that it will be far higher than the initial estimates.
So let us work with the published estimate of R1 trillion, as confirmed by Minister Peters in September 2011. This is a very big figure, and difficult to comprehend without some comparison. We know a low-cost house requires R70 000 to build, and another R100 000 could add an off-grid solar PV system to it. We could add a solar water heater for R10 000, and round up by R20 000 to get R200 000. So then R1 trillion would allow 5 million such houses to be built. That could house half the population of South Africa, and give them free electricity and hot water for life. Such a project would also create a huge number of jobs, distributed throughout the country.
Apart from the huge costs, nuclear power stations are technologically very complex, and this technology will need to be bought from overseas. This means money leaving the country, and so not being available to the local economy. It also means importing labour – even though Koeberg was built around 30 years ago, to this day there are still some French technicians employed to operate it.
In terms of number of jobs, nuclear power requires fewer workers per generated unit of energy than coal power. This means that if coal power is replaced by nuclear power, jobs will gradually be lost. In contrast, renewable energy requires less imported technology, and more jobs per unit of electricity generated. Research has shown that, for example, wind energy would generate 10 times the number of jobs compared to nuclear energy (Agama Energy: Employment Potential of Renewable Energy in South Africa).
Another issue is the risk of a major nuclear accident. Statistically speaking, these accidents are very unlikely to occur. However, as Japan has shown us, very unlikely does not mean impossible. At Fukushima, a natural disaster resulted in both primary and secondary safety systems failing, resulting in the spent fuel ponds exploding and a vast amount of radioactive material being released, and the long-term evacuation of well over 1 000 km2 in a densely populated area. The UN Secretary General has warned that more nuclear accidents like this are likely to occur in the world.
The consequences of such an accident are huge, in economic terms and human suffering. Somehow, nuclear plant operators have convinced the governments of the world to put a maximum on their liability, and if the cost of a cleanup exceeds this, then the taxpayers of the country are required to pay the excess. Note that householder insurance policies always exclude any damage or loss of value due to a nuclear accident.
A recent economic study concluded that if nuclear power plant operators had to pay for insurance against the full costs of a major nuclear accident, the cost of electricity would be anywhere between R23/kWh and R670/kWh.
The only way the nuclear power industry can survive is to externalise costs, i.e. make someone else pay for them. That ‘someone’ is the people of the country foolhardy enough to install nuclear reactors.