South Africa ‘sets ball rolling’ on nuclear procurement process

Out-Law News | 17 Feb 2022 | 10:23 am | 1 min. read

The South African government has “set the ball rolling” on plans to increase the country’s nuclear capacity according to one expert.

The Department of Mineral Resources and Energy (DMRE) issued a request for proposals for a service provider to create a procurement framework for an additional 2,500MW of nuclear power on top of the 1.94GW produced by the two pressurised water reactors at Koeberg power station near Cape Town. The DMRE said the successful bidder would have 12 weeks to develop the framework and ensure that it complies with domestic legislation and international best practice.

It comes after South Africa’s plans to boost its nuclear power were put on hold in 2017, when the Western Cape High Court ruled that the government’s attempts to procure 9.6GW of nuclear energy was unlawful. Procurement processes and cooperation agreements concluded with Russia were also set aside by the ruling.

But in August last year, plans drawn up by energy minister Gwede Mantashe for 2,500MW of new nuclear capacity were given the green light from the National Energy Regulator of South Africa (NERSA) to begin procurement. The DMRE said the process would be completed by 2024 with the new capacity operational by 2030, in line with the decommissioning of South Africa’s coal power generation facilities.

Jurg van Dyk, energy and construction expert at Pinsent Masons, said: “The government’s latest announcement is the first definite step in advancing the procurement process. The news should set the ball rolling for the development to start in earnest.”

“The government has also recently taken steps to advance the gas-to-power procurement programme, in addition to the ongoing renewables procurement programme, which shows that there is commitment from the government to address South Africa’s energy deficit,” van Dyk added.

In its decision to back the development of 2,500MW of new nuclear power, NERSA said the successful bidder would have to satisfy the requirements of the Integrated Resource Plan of 2019 (IRP) - South Africa’s 20-year plan to deliver security of electricity supply. According to the IRP, any new nuclear programme must be implemented at a pace and scale that the country can afford.

NERSA also said that the final procurement framework should ensure that the additional capacity is not licensed through fragmented contracts - and that Eskom, South Africa’s state owned electricity utility, be named as the electricity generator. Alongside recommendations on a procurement approach, NERSA said the service provider should also detail how localisation and industrialisation could be maximised during the project.

The deadline for tender submissions is 25 February 2022.