The Russian nuclear energy company Rosatom has been making historic deals lately, most notably a deal with China whereby Rosatom will construct several new reactors in the energy-hungry People’s Republic. Now some prominent South African politicians are hinting they may want help upgrading their nuclear capacity. President Cyril Ramaphosa has been cautioning against expanding the African nation’s nuclear-generating capacity, saying it was too expensive to do so, but Treasurer-General Paul Mashatile does not entirely agree.
“Once we are clear that this is affordable for us to do, we are open for business including with Russia,” Mashatile said ahead of a planned meeting with Russian President Vladimir Putin. “I think the approach we will take is to avoid the Big Bang approach. The initial intervention was that we would do close to 10,000 megawatts,” he added. “It’s unaffordable.”
In other words, South Africa cannot afford large-scale expansion of its nuclear capacity but may have the financial wherewithal to invest in smaller-scale expansion.
Rosatom has recently signed agreements with several other African countries that at present have no nuclear energy capacity, including Rwanda and Zambia. The Russian company is also working on building a sizeable nuclear plant in Egypt. Construction on a new 4,800MW plant at Dabaa in northern Egypt (the country’s first nuclear plant) is scheduled to start in about two years for commissioning by 2026. Rosatom has also signed a deal with South Africa’s own state-owned nuclear firm, the South African Nuclear Energy Corporation, to explore avenues for harnessing nuclear technology in joint ventures, including the production of nuclear medicines used for treating cancer.
South Africa’s plans to think smaller when it comes to nuclear energy investments are in line with global trends. Scores of companies worldwide are developing a new generation of smaller reactors with the aim of delivering nuclear power at lower costs and reduced risks. Small-scale reactors, called advanced small modular reactors (SMRs), are being designed to generate between 50MW and 300MW of power, significantly lower output than the 1,000MW or more generated by conventional reactors.
Lower output will also come with less construction risk, lower costs and reduced safety fears, key factors if nuclear energy is to hold its own against solar, wind and other renewable energy sources, whose outputs are increasing even as overall costs are decreasing. “There is a big global market for small reactors,” Fiona Reilly, chair of a government-sponsored nuclear-financing group in the UK, has been quoted as saying.
Industry experts stress that nuclear energy, in however small way, will be essential for many of the planet’s industrialized nations (and especially European ones) to wean themselves off climate-changing carbon-powered energy sources.
“Our aim is to fight climate change with the single goal to become the benchmark leader of low-carbon energy in the world,” Dominique Miniere, group senior executive and vice-president of the French energy company Électricité de France (EDF), said at an international nuclear expo held in Paris in June. “In many countries electricity from nuclear in the energy mix is only 25%,” Miniere noted. That percentage must be increased, he stressed, “because that’s the best [and most cost-efficient] thing we can do for the environment.”
Yet even lower-scale nuclear power doesn’t come cheap. Cutting-edge technological advances, specialized engineering know-how and exacting manufacturing requirements involved in building and running reactors come with considerable costs. Not even the world’s wealthiest nations, including the UK and the US, can do without finding effective ways to reduce the costs of new nuclear energy generation.
In order for nuclear energy to be competitive, says Dave Jones, a British carbon and power analyst at the European climate policy think tank Sandbag, its costs will have to come down in coming years. Yet cutting costs must not come at the expense of safety considerations, which are behind the high costs of nuclear energy in the first place. “Big cost reductions are necessary, but how do you guarantee safety?” Jones, whose think tank advocates for a large share of renewables in energy mixes, tells Sustainability Times. “I would love to believe that new nuclear technology will ride to the rescue; but all we know how complicated that technology is and roll-out out never goes as smoothly as optimists hope.”
Considerations of cost are having a marked impact on governments’ views of the feasibility of investing in new nuclear reactors and plants. According to a newly published study, for instance, the significant costs and technological challenges involved in their construction and operation, no new large nuclear plants are likely to be built in the US any time soon.
Nuclear energy experts like Miniere of EDF argue, however, that long-term planning and financing by governments can work well in overcoming such difficulties. “State financing could be on two aspects,” the French expert observed. “One is to provide guarantees on the return of investment. Otherwise, it’s difficult to have private investors [come on board]. Second, whenever you have some kind of state investment involved, you can expect a ROI (return on investment) rate which is a bit lower. A ROI difference of one per cent has an impact of about 10 euros per MWh.”
Xavier Ursat, senior executive vice-president of EDF Group, concurs that investments in nuclear energy, by their very nature, have to be viewed as long-term investments with returns often decades into the future. “[W]e have to think about the way we organize the financing of each development,” Ursat said at the Paris nuclear expo. “The fact of nuclear energy is that we need time, although that is true of renewables also,” he added.
“It is very difficult in the modern world to imagine a project where you spend money for 10 years and then expect to start making money between years 11 and 40 or 60,” Ursat elucidated. “This is not really the type of investment that is in vogue today. So we need regulations to ensure and secure revenues during the operational phase (years 11 to 40),” he went on. “We need to organize a very safe and efficient financing model during the construction phase. If we put all these elements in the cooker, we can have competitive nuclear energy.”
If all that is done well, the expert stressed, the costs of nuclear energy could be significantly lowered over the long term. “We can have (new) third-generation nuclear power for 60 to 70 euro per KWH. And if you look at the fact that a reactor produces energy 24 hours a day, 7 days a week, that it can modulate its power according to the modulation of renewables, that you can spare investments that would be necessary if you had a 60% renewable electricity mix – if you look at all of that, then 60 to 70 euros is a very good price and will be put to good use in every economy in the world.”
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