There are no secrets and corruption in the nuclear deal is unlikely, Eskom’s Chief Nuclear Officer told delegates at the Nuclear Power Africa conference that was co-located with the annual African Utility Week conference and expo on 18 May 2017.
David Nicholls also reaffirmed Eskom’s position that nuclear is not just the most viable option on the table for South Africa’s future energy needs, but it is also affordable.
Nicholls participated in a panel discussion on the country’s nuclear positioning where he told a fully packed briefing room there has been no procurement process on nuclear.
“We are asked show us the nuclear plans you’ve signed with the Russians and I say I can’t do that. I don’t have one. I don’t know of a secret plan,” he said.
He insisted the process has been transparent yet “there is this presumption that behind this there is something else”.
In 2014 South Africa signed intergovernmental agreements with among others Russia and China as part of the multi billion rand nuclear built plans. Yet recently the Western Cape High Court found these agreements lacked transparency prompting the government to go back to the drawing board for a new and more transparent process. The government’s nuclear plans earlier also hit hurdles over costs and corruption claims.
Responding to questions on corruption claims with the nuclear deal, he said corruption on the nuclear deal “could be quite challenging in the sense that it is a state to state deal”. “Now if you have multiple deals with small little contracts you tend to get lots of opportunities for corruption.” According to him concerns over corruption arise with lots of small deals and when procurement is compartmentalised. Many have claimed the nuclear deal will be a conduit for corruption. But according to Nicholls the deal will likely be Eskom contracting with overseas state organisations with a government to government loan system – something that will minimise opportunities for corruptions.
Nicholls told delegates on Thursday there are claims that the uranium market is the “ideal place for corruption in the nuclear deal, but it is important to understand uranium is not the big money spender in this deal”. He referred to the coal contracts and said it can be argued in the Eskom coal fire power stations the big money driver is the cost of coal. He said with the nuclear deal, the cost of uranium is the lesser cost driver.
“Uranium is traded like oil and the price is pretty much an international standard number. So if you ask me about that I would not go for uranium to claim corruption in the nuclear deal,” he said. “My advice to the industry is that if you believe corruption will come into the nuclear deal it will not be based on the uranium supply, it would be based on something else. But it is easier to control as a single big deal than in multiple small deals.”
Reaffirming nuclear as the most viable option, Nicholls dismissed other energy alternatives among which gas, hydro and solar as insufficient. Other energy and economic experts also differed on nuclear being the best option for South Africa. Energy expert Andrew Kenny reminded delegates renewable energy can be more expensive and it is not always reliable. Another panellist Sean Muller from University of Johannesburg, raised concerns over South Africa possibly locking itself in to a very non-competitive market in terms of fuel and technical support as oppose to renewable where there are a lot of players in that market.
Nuclear expert at the University of the Northwest, Anthonie Cilliers, another panellist challenged claims of nuclear energy options as unaffordable.
“A lot of people say it is expensive. The truth is nuclear does have a big capital expenditure when you build it due to all the safety aspects but once it is done, it pay for itself.” He said due to paying it off over about 80 years, it “really is an investment in our children’s future.”
“There is a direct link between the quality of life and the availability of energy,” he said.
Thousands of power and water industry decision makers from over 80 countries attended the three day conference where the latest developments, challenges and opportunities in the power and water sectors came under the spotlight.