Nuclear no match for renewables

By Amory B Lovins

Published in BDLive on 13th January


Maturation of renewable energy poises SA’s power system to become more equitable and sustainable. Picture: BLOOMBERG

SA has an immediate crisis in supplying reliable electricity. The government’s curiously oblique solution: eight new nuclear reactors, costing about R1-trillion. The inherent complexity of procurement, financing and construction means no new nuclear power could flow for at least a decade, and then only at prices well above those many customers cannot afford today.

The country’s past two flirtations with modern nuclear power have not gone well. Plans for a home-grown “pebble bed” modular reactor were abandoned in 2010 after 12 years and R7bn was wasted. Now rarely mentioned, it found no customers or investors, but its advocates’ influence lives on. In 2008, the government rejected as “unaffordable” bids to build 3.2GW of conventional nuclear reactors.

Today, its ambition is three times bigger — 9.6GW — and each gigawatt will cost about three times more because real costs rose while the rand lost half its value. So, the total price tag has increased about nine-fold since 2008, while SA’s per-capita gross domestic product (GDP) has not risen a bit. With the national debt approaching junk-bond status, nuclear “affordability” has hardly improved.

SA’s electricity use shrank since 2008. Eskom’s nearly quadrupling the price of electricity encouraged its customers to use less more productively. Between 2008 and 2013, Eskom provided incentives for customers to save 2.5GW. Those “negawatts” were 91% cheaper than Eskom’s most advanced power plants, let alone the coal they will burn.

Far more efficiency is possible. A team of experts from the Rocky Mountain Institute helped engineers redesign a vast mine to use 43% less energy, improve miners’ health, and boost profits, through investments that will pay for themselves in a few years.

The government’s policy rests on its 2010 plan, whose 2011 revision committed to 9.6GW of new nuclear power, despite finding it not economically optimal — even at costs far below that of today.

A 2013 update found nuclear clearly uneconomic if it became costlier, or renewables became cheaper, or demand slackened — all of which occurred. That update remains unpublished and ignored.

Yet since 2011, renewables have made astounding progress. Large-scale wind and solar farms have been built in an average of 1.6 years — six times faster than nuclear power. Small-scale solar home or village projects can be up and running in weeks.

Renewable electricity also became two-thirds cheaper as the Department of Energy’s open bidding for 6.3GW drove down wind power prices by half and solar by three-quarters. Both fell below 5 US cents per kilowatt-hour (kWh). New nuclear power in the world market costs between 9 US cents and 15 US cents per kWh — 12.4 US cents for a Turkish nuclear plant planned by Russia (SA’s preferred nuclear vendor), which has been delayed, unable to attract private financing, and is now suspended.

RENEWABLES thrive on the fair and open competition that no new nuclear plant anywhere has survived. Nuclear costs are murky, rising, and augmented by the long-term burdens of decommissioning radioactive plants and storing their wastes for millennia.

Renewable energy costs are transparent, fixed for decades, and falling. Wind power and solar photovoltaic (PV) panels have no costly long-term obligations, wastes, climate burdens, or risks; they use virtually no water and have almost no operating costs; they burn no fuel and the wind and sun are free.

Worldwide, renewables in fair competition (no subsidies and no corruption) generally cost less than any other new electricity source and many existing ones. They form more than half of all new capacity — more than 80GW funded by more than $250bn of private capital each year from 2011 to 2014, and probably more last year. Nuclear, by comparison, has added less than 5GW annually, and attracted roughly zero voluntary private investment.

Renewables create economic growth and jobs for South Africans. The first 1.9GW of renewables added by mid-2015 delivered more than 19,000 job-years of employment. Unlike nuclear, they create domestic jobs and long-term domestic manufacturing.

The many projects in areas of poverty and inequality committed R19bn to develop local communities. Over six months, renewables saved R4bn in load shedding and fuel costs. Most of SA’s R193bn in renewable projects was financed by banks and private investors, including R53bn from abroad. A solar plant built in sunny SA pays for itself twice as fast as one in Italy.

Solar heat can be stored in molten salt for night-time power, as the new Bokpoort solar plant in the Northern Cape does. But storage is not necessary — four European countries not rich in hydropower received about half their 2014 electricity from renewables (Spain 46%, Scotland 50%, Denmark 59%, Portugal 64%), without adding bulk storage or reducing reliability.

South African wind and solar tend to work best at different times, together meeting morning and evening peak loads. The government wants nuclear power lest “variable” renewables prove unreliable, but experience abroad has resolved this problem: last year, the former East German utility was 46%-powered by wind and solar PV.

On the contrary, it is nuclear power whose rather inflexible output, traditionally blended with output from coal and gas plants, complicates integration with the renewables that are rapidly replacing polluting and erratically priced fossil fuels.

The maturation of renewable energy poises SA’s power system to become fundamentally more equitable and sustainable. Decentralised power-generation is the pathway to “energy democracy” — investing in power for people and places lacking it.

New nuclear power — with its costs rising, demand shrinking, and renewables winning in the marketplace — lacks a business case for SA, whichever country provides the technology. There’s no rational basis for discriminating against efficiency and renewables, all of which avoid the same fuels and emissions and can provide the same electrical services many times over at a lower cost than nuclear power.

BUT there is special cause for concern about the proposed nuclear deal with Russia. Does it meet the constitutional requirement for “fair, equitable, transparent, competitive, and cost-effective” procurement? A recent decision by the Supreme Court of Appeal, voiding Eskom’s proposed Koeberg refurbishment deal for being “irrational” and untransparent, suggests not. Russia has been promised favourable tax and financial treatment, and permanent immunity for any nuclear mishap. Have all other bidders — France, China, Korea, Japan, and the US — been promised the same?

Russia’s domestic nuclear projects have a troubling record on cost, delays, quality, and transparency. Its $72bn National Wealth Fund will run out this year, overextended by $24bn to finance nuclear exports to four other countries. Domestic reactor-building halved last year; all state nuclear subsidies are to halt this year.

Independent experts agree Russia would be lucky to build half the 30 nuclear projects it’s trying to sell to a dozen more countries including SA. Russia needs outside money to finance its nuclear commitments. But western capital is blocked by sanctions for aggression in Ukraine. Affordable capital from banks and private investors is unavailable because Russia and its nuclear builder Atomenergoprom are junk-rated, judged even riskier than Eskom.

Russia proposes to finance its nuclear build in SA from South African taxpayers, who would be locked into repaying Russia for decades through electricity-purchase contracts at inflated prices.

Not just Russian, but any nuclear power, is a bad idea for SA. It can’t compete with efficiency and renewables, by every relevant measure: cost, timeliness, financing, jobs, economic development, environmental and safety risk, independence, security, abundance of free domestic energy sources, and the social good of “energy democracy”.

• Lovins is chief scientist at Rocky Mountain Institute, an independent nonprofit think-and-do tank in the US. Time Magazine named him of the world’s 100 most influential people

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