Discussions have been ongoing in South Africa for the past few years about the benefits and downsides of nuclear power. S.A. has been discussing obtaining about ten gigawatts from six nuclear reactors. There are factions that are lobbying for nuclear power and other factions that are strongly opposed.
Last year it leaked out of sources in the government that a secret deal had been struck with a Russia company and there was a very negative reaction from the public and some factions of the government. The agency that was reported to have struck the deal claimed that no such deal had been signed and that they had only signed an agreement to consider such a deal. They said that they would abide by the usual requirement of putting out a request for bids and considering all bids submitted before making a decision. However, there are members of the S.A. government connected to the Treasury who believe that nuclear power is too expensive to be practical for S.A.
It has been reported that the S.A. cabinet is now considering a proposal to have the nuclear project financed by Eskom, the S.A., the state-owned power utility. Critics of the proposal say that that the management of Eskom, in their offer to fund the project failed to answer any of the fundamental criticisms that had been put forth against the nuclear project.
The critics point out that last year, Eskom begged the government for a one and three quarter billion dollar cash infusion and permission to write off a four and one quarter billion dollar loan. They said that a decision on any such Eskom financing of the nuclear project should be deferred for at least two years and Eskom should appear before Parliament to explain how they could afford to finance the nuclear project if they were having very serious financial problems the year before.
There are three big problems with the whole idea of the S.A. nuclear project. The first problem is that the power will probably not be needed at all. It turns out that earlier forecasts of power requirements were too high and economic growth and the demand for electricity are both significantly lower than anticipated. The second problem is that no government cost estimate for the nuclear project has been put forward. Unofficial cost estimated suggest that the project would be very expensive. Even if it turns out more electricity is needed than estimated, critics of the nuclear project say that there are other possible sources of new electricity that will certainly be much cheaper. The third big problem is the fact that with low demand and the probability of high cost, proceeding with the nuclear project could seriously destabilize S.A. public finances and economic growth plans.
Promoters of the nuclear plan keep changing their arguments in favor of building nuclear power plants. Last year, the head of Eskom told the S.A. Parliament that it was "urgent" that S.A. have nuclear power and that it would be a practical choice. He said that costs would be lower than the critics claimed. After making this argument, the head of Eskom later attacked alternative energy sources. He questioned the benefits of alternative energy projects that had already been approved and were being carried out. It turns out that Eskom has been defying national policy decisions by refusing to sign agreements on alternative energy projects.
Although Eskom had demanded government assistance last year to "stabilize" its finances, it was now claiming that it had ten billion dollars on hand and could borrow the rest of the money to build the nuclear reactors. If the reactors were built and it turned out that the energy was not needed and the revenues from the sale of the electricity could not pay back the loans for the nuclear project, then either the government would have to step in to cover the loans which could be very harmful to the national budget or the rate payers would have to pay a lot more for the electricity. The critics of the Eskom plan say that there is no current need for nuclear energy and proceeding to construct the nuclear reactors would be a very bad idea.
