TWO strange developments this week have raised serious questions.
One: PetroSA, a state corporation, has, according to all evidence, formulated the tender criteria for the reconstruction of a R3.8 billion refinery in Mossel Bay in such a way that only one out of 20 bidders, the Russian Gazprombank, could qualify.
Two: The Minister of Electricity, Kgosientsho Ramokgopa, announced that the government will acquire 2,500MW of nuclear power — before the latest Integrated Resource Plan (IRP) has been released and made available for public consultation.
Ramakgopa also misled the public by saying nuclear energy is the cheapest option.
Here is the response from the respected energy specialist and former government adviser Prof Anton Eberhard:
Some crazy stuff going through cabinet in South Africa - PetroSA signing up Russia’s Gazprom rather than TotalEnergies, which has adjacent offshore gas for its Mossel Bay gas-to-liquid fuels plant, and now a procurement of a— Anton Eberhard (@AntonEberhard) December 12, 2023
catastrophically expensive 2500MW nuclear power plant pic.twitter.com/n0rNKDJdkS
According to an investigation by Radio Free Europe/Radio Liberty, Gazprombank partially funds the Russian invasion of Ukraine. They have evidence that some of the Russian soldiers in Ukraine are paid through the bank. Investigation: Free From Western Sanctions, A Russian Bank Helps Fund The Invasion Of Ukraine
The investigative journalism group amaBhungane says it has seen documents indicating that the board and tender committee of PetroSA were warned against the tender with Gazprombank and requested negotiations with other bidders. This was ignored. PetroSA's CEO, Sesakho Magadla, bluntly stated in an interview with SAfm that it was “unfortunate" no other tender qualified.
Cabinet has approved a R3.8bn deal between PetroSA and Russia’s Gazprombank.— amaBhungane (@amaBhungane) December 12, 2023
But how did 19 out of 20 bidders get eliminated from the tender, leaving Gazprombank as the only qualifying bid?
Here’s the evaluation criteria…
But the refinery is small change compared to the construction of a nuclear power station.
The ANC is, by the way, also determined to launch the national health insurance (NHI) system in the next decade, which will cost hundreds of billions a year.
Most energy specialists agree that nuclear power is a clean and reliable source of uninterrupted energy. However, it poses so many risks for South Africa that it is probably not the best option.
Even if the process is not delayed by protracted legal battles and is launched next year, the first nuclear power may be delivered only by the mid- or late-2030s.
Nuclear reactors are notorious for construction delays and budget overruns. For example, Flamanville, France's new reactor, took 16 years to build and is still not finished. Finland's OL3 reactor was supposed to be completed in 2009 but is not yet fully operational.
(Keep in mind that the two South African coal-fired mega-power stations, Medupi and Kusile, were supposed to be operational in 2015 and are still not at full capacity, with costs having risen from R136 billion to about R450 billion.)
Professor Mark Swilling of Stellenbosch's Centre for Sustainability Transitions says by the time the intended reactor starts delivering power, South Africa's renewable energy systems will be far advanced.
“So 2,500MW at that stage at a very high cost doesn’t seem to make a lot of sense. Renewable energy is coming down in price. Solar and wind energy plus battery backup plus gas backup is probably what our system is going to look like in the next decade. To then bring in 2,500MW, actually a small amount of so-called base load, doesn’t really make a lot of sense given the price."
Swilling says nuclear power costs significantly more than renewable energy, which can be deployed quickly and inexpensively.
International research indicates that green energy will become cheaper over the next decade while the opposite is true for nuclear and coal power.
Energy specialist Chris Yelland says he is not opposed to nuclear power and it may be considered in the future, but now and in the next decade it cannot be part of South Africa's solution. “Ten years is a long time in the current world and things can be very different in 10 years’ time.
“That’s one of the problems with nuclear: it binds you to a particular vendor, country, company, technology for the next 80 years. I don’t think that is wise in a rapidly changing energy environment to have to be bound to a single vendor, country or technology for 80 to 100 years.
“I think it would be better to use some of our natural resources which we have abundance. I’m talking about renewable energy, wind and solar, battery storage, pumped water storage and other technologies that can be delivered much more quickly, more reliably and don’t have the problems of high-level nuclear waste and long construction times that the nuclear industry is plagued with."
But the biggest question remains whether the government's new nuclear power plan is part of a secret agreement with Russia, especially since the ANC needs hundreds of millions of rand for an election campaign while the coffers are empty.
The then Minister of Energy, Tina Joemat-Pettersson, signed a nuclear power agreement with Russia on September 14, 2014, just two weeks after then-president Jacob Zuma met Vladimir Putin in Moscow. Zuma drove the project relentlessly.
The Russian state company Rosatom would have built a nuclear power plant for an estimated R1 trillion, and Russia would assist in financing it. The plan was strongly opposed by the National Treasury. Zuma dismissed the then Minister of Finance, Nhanhla Nene, in December 2015 and replaced him with the Gupta puppet Des van Rooyen, largely due to Nene's opposition to the Rosatom agreement.
Putin was upset when the agreement was thrown out by the high court, and it is known in political circles that he has since exerted strong pressure on Zuma's successor, Cyril Ramaphosa. According to a Reuters report on July 30, 2018, Putin confronted Ramaphosa about it during a Brics meeting.
The whole saga was documented last year in Karyn Maughan and Kirsten Pearson's book Nuclear: Inside South Africa’s Secret Deal.
The authors quote Russian environmental activist Vladimir Slivyak, who says if Russia had built the nuclear power plant, it would have been extremely difficult for South Africa to ignore Moscow's wishes. “This is what Russia does. They make you dependent on an energy source that they supply and then they control you. If you make a wrong decision, then they find a way to teach you a lesson about it," says Slivyak.
Rosatom told the authors: “Rosatom is committed to participating in an open and transparent nuclear procurement process in South Africa."
Civil society, all of us, will have to keep our eyes and ears wide open.
♦ VWB ♦
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