Speech by Ms Dipuo Peters, South Africa MP, Minister of Energy, at the Seminar of Nuclear Power
Dr Kelvin Kemm, Chairperson of this conference
Invited guests
Ladies and Gentlemen
I am delighted to be here this morning to join Dr Kemm and all of you as we discuss the subject that surely should be in the hearts and minds not only of the people present here but also those of other millions of our people who are not fortunate enough to be here.
My organization, the movement of the people of this country, the ANC, has always been an organization that is concerned about the plight of all our people. We have always decided, throughout our history, that tackling poverty and underdevelopment that “was created by colonialism and apartheid” lies at the very heart of the major challenges that we have to tackle as we rid our country of the vestiges of apartheid edifice.
Our 1992 Ready to Govern Document, enjoins us, as post apartheid energy administrators, to “develop a sustainable economy and state infrastructure that will progressively improve the quality of life of all South Africans.” It also called on us to “ institute an appropriate regulatory framework to achieve national economic and development goals that are protective of the environment”.
When this document was written our economy was in a parlous state, “Since the mid-1970’s (our) economy had stagnated. An average growth rate as of 1960’s declined to 3 percent in the 1970’s and was one percent in 1993. Unemployment was over 40 percent of the economically active population”.
However, the next major ANC policy document, the RDP White Paper of September 1994, lamented the fact that our “economy was built on systematically enforced racial division…rual areas were divided into underdeveloped Bantustans…towns and cities were divided into townships without basic infrastructure….”
The need therefore to end the spatial geography of apartheid and replace it with a democratic state that is able successfully to restructure the energy sector to meet the needs of a modern society such as ours.
We have to act according to the resolutions that were taken at the watershed Polokwane Conference of December 2007 which called on us to “diversify (our) energy sources away from coal, (towards) nuclear energy and renewables”.
Eskom, our utility that is charged with the execution of most of these decisions is in the news for a whole lot of reasons. The environment is highly contested and crowded particularly in view of the decisions that have to be taken by NERSA with regard to the proposed tariff increases. However, we have reached a delicate situation which requires us to take bold and decisive decisions about the type of the current and future energy requirements of our country. We need to decide whether to build coal fired or nuclear power stations.
We have to do this whilst implementing the resolutions of Polokwane which enjoined us to take “climate change considerations” into account. Coal has clearly become a difficult option as carbon emission taxes could be imposed going forward. Accordingly we have drafted the integrated resource plan for the country. This will clearly spell out the road map into the future and it will be adapted as and when circumstances requires us to do so.
It has been about 20-years since Eskom last commissioned a coal-fired power station in South Africa. During this period engineering and project management capacity was gradually eroded within Eskom as they focused more on developing world-class capability to operate the existing portfolio, rather than commissioning new plants.
We are now entering an intensive capital investment programme, in terms of which approximately 40 000MW of new capacity will be required over the next 20 years. The funding of this programme has become even more critical. Historically Eskom had assumed the role “supplier of last resort” in terms of which they would ensure security of electricity supply.Eskom was therefore responsible, in terms of that arrangement, to determine the extent and nature of the new generation capacity required for South Africa. However this is no longer the case.
In October 2006 the mandate of my Department was redefined with regard to matters related to energy security in terms of the Electricity Regulation Act, (ER ACT). The Electricity Regulation Act provides for the introduction of the integrated Resource Plan (IRP), which is defined as “a resource plan established by the national sphere of government to give effect to national policy”.
We need to behave like a trapeze artist and balance a number of parameters as we take decisions going forward. These include costs, energy security adequacy and environmental considerations. International deliberations about climate change are taking place at the same time as we are implementing the Long Term Mitigation Scenarios (LTMS) that have been approved by Cabinet. The Copenhagen negotiations on climate change which will take place very shortly will have a bearing on the emissions trajectory that our country will follow. We would, however, need to reduce our emissions irrespective whether this would be imposed or voluntary.
There are also energy security considerations regarding the options we will eventually choose. There are question marks as to whether renewable energy would be able to fulfill the baseload capacity requirements at all. There is no doubt, therefore, that the undisputed base load options that are available to us as a country are coal, nuclear, demand-side-management initiatives and renewable energy sources.
Programmes currently underway include 10 000GWh of renewable energy by 2013, the introduction of 1 million solar water heaters by 2014 and the introduction of energy efficiency incentives. A key consideration in the risk adjustment process relates to the assumptions that we have to make in relation to commissioning of new generation capacity on schedule.Eskom has indicated that Medupi will be commissioned before winter of 2013 and Kusile will follow soon thereafter.
We are not oblivious to the fact that should there be any delay in commissioning these two plants, consequences will be too ghastly to contemplate. This adds impetus to the need to accelerate the introduction of the independent Power Producers.
The energy sector of the economy has within it a chance to respond to the desire to create sustainable jobs. History has demonstrated that only big infrastructure projects are capable of creating long term and sustainable jobs. This should be able to buttress initiatives such as the public works programme and the national youth service. If, for instance, we build the next generation nuclear fleet of 20 000MW, we estimate that we will create around 70 000 direct jobs in South Africa economy. This figure will be much higher if we include approximately 300 000 indirect jobs that will be created throughout the entire nuclear value chain. This has the possibility to be done at the same time as we launch the country’s single biggest post apartheid training programme where we will be able to train approximately 77 000 people.
The nuclear energy expansion programme will require specialized skills. This requires nuclear technical capacity such as engineers and Scientists. The consolidation and co-ordination of education, training and development initiatives to produce the number of skills required for the programme.A method to attract and retain key black talent in general, and African talent in particular.
This will have a positive impact on the economy. We have been struggling, as a country to create an industrial base that has the possibility to be part and parcel of the international supply chain of much larger industrial players. If there is an industry that is capable of doing this: it is the nuclear industry.
All that which we have mentioned today is part of Nuclear Energy Policy and Strategy that was approved by Cabinet in June 2008.We remain firmly committed to the realisation of the vision of catapulting our country into the mainstream of industrial and technological innovation.
Accordingly, in order to achieve a sustainable nuclear programme and to obtain the potential economic benefits, we are investigating the re-establishment of the complete nuclear fuel cycle. In this regard, Necsa is currently conducting feasibility studies.
In conclusion, we need to borrow the words of Nadine Gordimer, Winner of Nobel Prize for Literature, and agree with her that” the dread attends the unknown”. It is indeed true that the experience at Chernobyl and Nagasaki may have given nuclear skeptics an opportunity to criticize the nuclear programme commitment to the peaceful use of nuclear and nearly 25 years of experience at Koeberg has clearly demonstrated that we have the capacity to manage nuclear generation plants successfully and I am convinced we shall do the same with the next generation of nuclear plants that we will surely build.