Energy department faces legal ordeal on nuclear energy deal
By Carol Paton
This article appeared in BDLive
THE curious developments on government’s nuclear energy procurement programme last month have sunk the Department of Energy deeper into a legal mess.
Already, an attempt to challenge the legality and constitutionality of the process has been lodged: Earthlife and the Southern African Faith Communities Environmental Initiative (Safcei) filed papers to oppose it in October.
Now, the muddled events that unfolded last month are likely to make matters worse, making an already controversial process even more contested.
It all began in the last Cabinet meeting of the year on December 7, when it took a decision to issue a request for proposals (RFP) to build 9,600MW of nuclear power-generation.
As important as it is, this decision was not communicated in the normal post-Cabinet media statement by Minister in the Presidency Jeff Radebe.
Official confirmation took place only on December 21 in a government gazette. Like the absence of an official announcement, the gazette, too, was strange. Apart from the fact that it was issued on December 21, when the holiday season was under way, the gazette made use of a two-year-old signature by previous minister Ben Martins to establish its legal basis.
In order to call for proposals for new generation, the minister of energy must first make an official determination in terms of the Electricity Regulation Act of 2006. To do so, she must obtain the concurrence of the National Energy Regulator of SA (Nersa). This, it seems, was done two years ago by Mr Martins and the paperwork then lay in a file in the Department of Energy for the next two years.
Last month, the old document was retrieved and slapped into the government gazette.
There are several reasons why the Department of Energy decided to use an old document to make the determination rather than getting a fresh one from serving Energy Minister Tina Joemat-Pettersson. None of them, though, will make the nuclear deal any smoother.
Trying to explain this, director-general Thabane Zuma was hauled back from leave to issue a media statement on December 26, saying that while the determination had been processed back in 2013 by Mr Martins, it was being kept on ice until the Cabinet decision to issue the RFP. Now that this had happened, Ms Joemat-Pettersson had given the go-ahead for it to be gazetted, he said.
This explanation makes little sense.
A determination for new power generation must always precede a call for proposals and has always done so in the past. There was no need to delay it until the RFP was imminent.
One of the grounds on which Safcei and Earthlife are challenging the nuclear procurement is that the government had begun a process to procure nuclear energy by signing agreements with various foreign governments, but had not yet made a determination under the Electricity Regulation Act.
By October, when the papers were lodged, this had not yet been done.
There are other potential problems with the process that have been made worse by the December gazette. If Ms Joemat-Pettersson had made a determination for nuclear energy herself, instead of using that from Mr Martins, she would have had to go back to Nersa to get concurrence. Nersa’s concurrence is in turn based on certain key energy planning documents being in place, in particular the Integrated Resource Plan (IRP).
However, SA’s IRP is out of date. It was last adopted by Cabinet in 2010 and should be revised every two years. But because a later IRP, drawn up in 2013, has never been adopted by Cabinet, SA’s energy planning is behind schedule. The 2013 version of the IRP is a lot less enthusiastic about nuclear energy and, among other things, sets a firm price ceiling on its procurement.
The use of the old gazette may, therefore, have been viewed as a way out of these procedural difficulties. But these are points over which high-paid men and women argue in front of judges and a few more legs have been added to the possible argument.
Also key to the legal arguments will be the difference of opinion over whether public consultation to build nuclear power stations has taken place. The department says that it has as it consulted widely over the IRP 2010 and has also engaged in environmental impact assessments. Safcei and Earthlife disagree that this amounts to meaningful consultation.
It is also worth noting that an RFP is only the beginning of the shopping process and does not mean that a decision to build plants has been taken. Reaching a decision on whether nuclear energy is affordable, particularly on the scale that SA has in mind, is a bigger and more difficult decision that the Cabinet will still have to take.
Getting there, though, will mean first navigating the procedural legal hurdles along the way.