South Africa nuclear generation plans receive regulatory approval

Out-Law News | 31 Aug 2021 | 3:20 pm | 1 min. read

Plans for South Africa to procure 2,500MW of energy from nuclear power have received approval from the National Energy Regulator of South Africa (NERSA).

The approval means that the Department of Mineral Resources and Energy (DMRE) can now begin preparations for the procurement of the new nuclear generation capacity. It intends to issue a ‘request for proposal’ (RFP) at the end of the 2021-22 financial year, as announced by energy minister Gwede Mantashe during this year’s budget vote in parliament. The procurement process should be completed by 2024 with the new capacity online by 2030, in line with the decommissioning of South Africa’s coal power generation facilities, according to a government press release.

The 2,500MW target is in line with that set out in the 2019 Integrated Resource Plan (IRP), the country’s 20 year plan to deliver security of electricity supply from an inclusive mix of energy sources at a pace and scale that South Africa can afford.

Jurg van Dyk

Jurg van Dyk

Partner

This decision will promote the energy mix envisaged by the IRP 2019 and a move away from coal-fired energy generation

Johannesburg-based energy expert Jurg van Dyk of Pinsent Masons, the law firm behind Out-Law, welcomed the announcement. South Africa’s plans for new nuclear power have been on hold since 2017 after a previous procurement process was set aside by the courts, he said.

“In 2017, the Western Cape High Court ruled that the government’s pursuit to procure 9.6GW of nuclear energy was unlawful, and the procurement processes and cooperation agreements concluded with Russia were set aside,” he said. “Since then Gwede Mantashe, minister for mineral resources and energy, has resubmitted proposals to NERSA for nuclear energy procurement, which have now been approved.”

“This decision will promote the energy mix envisaged by the IRP 2019 and a move away from coal-fired energy generation. It was previously intimated that small-scale modular reactors could be considered. We expect that the procurement will proceed on that basis, thus opening up the market to new nuclear technology that has not yet been seen in the South African market,” he said.

In June 2020, the DMRE issued a ‘request for information’ (RFI) to the market to test interest in new-build nuclear projects based on similar principles to the independent power producer (IPP) programme used for renewable energy. The response to this was “indicative of market appetite and feasibility”, the DMRE said. The department also intends to proceed in line with international best practice as set out by the International Atomic Energy Agency (IAEA), of which South Africa is a member state.

South Africa’s state-owned electricity utility Eskom has previously identified Thyspunt, in the Eastern Cape province, as a preferred location for the country’s next nuclear power station. It is currently carrying out public hearings as part of a licensing process which will enable it to ‘bank’ the site for future use, according to local news reports.