A new nuclear build for South Africa is an impractical, economically unviable pipe dream

The reality is that the South African economy does not have the balance sheet to stump up the funding, guarantees and tariffs needed to make a meaningful new nuclear programme possible. Energy expert Chris Yelland explains why.

At the outset, it must be stated clearly that this writer is not opposed to nuclear power on emotional or ideological grounds, nor does this writer believe that nuclear power is undesirable in general, or as a rule.

Indeed, in some countries nuclear power may make good sense, based on the country’s own levels of economic, technological, industrial and social development, and its primary energy resources, energy mix, nuclear and construction expertise, and local cost structures.

For some countries, long-term high-level nuclear waste storage and disposal do not present insurmountable technical challenges, but rather present challenges in respect of costs, long-term environmental concerns and opposition by local communities.

Nuclear power has also proven to be relatively safer than most, if not all, other generation technologies in terms of fatalities experienced per TWh of nuclear energy delivered over the last 60 years, and in particular, nuclear power has been much safer than coal-fired power.

Read more: After the Bell: Not so fast on the nuke plan, Minister Ramokgopa

But while the probability of a major nuclear power plant accident is very low, the economic, financial and social costs of a nuclear accident can be very high indeed. Being a combination of both the probability and consequences of a nuclear power plant accident, the risks are therefore not insignificant, to the extent that the financial consequences of a nuclear accident are largely uninsurable.

Inevitably, the risks and consequences of a nuclear power plant accident are therefore largely borne by the sovereign, and thus by the population of taxpayers themselves, rather than the developer/owner/operator of the plant.

While large inland nuclear power plants do require significant fresh-water resources for cooling, such power plants can use sea water for cooling if constructed in coastal areas. Nuclear power also presents a low-carbon alternative to coal, diesel and gas-fired power, and can provide an effective technical solution to the production of electricity, heat and hydrogen.

Challenges with the economic and business case for large nuclear reactors

However, the real issues and challenges for the viability of nuclear power are not technical, but rather lie in the economic and business cases, and in particular the high capital costs, long construction times, high levels of interest during construction, and the inflexibility of operation, both in terms of low ramp rates and the poor economics of operating the reactors flexibly at less than full load.

In general, in order to achieve economies of scale, localisation of manufacture and cost reductions from going down the learning curve, a country has to commit to a single vendor country, a single nuclear vendor company and a single reactor design for a whole fleet of reactors. This risky option locks a country into a massive and inflexible nuclear programme lasting at least 100 years, covering the full construction, operation and decommissioning periods.

In an era of significant economic and technical uncertainty, other options become more attractive, especially when considering the geopolitical and military issues invariably involved with nuclear power.

Growing interest by private sector development of small modular reactors

As a result of the complexities and weak business case of large nuclear reactors, private sector technology companies have turned their attention to the possibility of developing small modular nuclear reactors in the range of about 30 to 300MW that can be standardised, commoditised and factory built to a significant extent in the country of origin.

Developers hope that this will reduce construction times and costs, and provide greater flexibility of operation. At the same time, some of these concepts offer the potential for reduced water usage, reduced refuelling downtimes, enhanced passive safety features, and greater flexibility of operation as load-following generation plants.

Small modular nuclear reactors are nothing new and have been applied for decades in niche applications, such as nuclear-powered submarines, aircraft carriers and ice-breaker ships in ice-bound oceans.

More recently, floating small modular reactors on barges have been applied at very limited scale in remote coastal areas of northern Russia for power supplies to distant and isolated oil and gas production facilities, and associated towns.

Read more: Koeberg Unit 1 can operate until 2044 despite concerns, says nuclear regulator

However, all these instances are niche, waterborne applications, as opposed to land-based generation of commercial power on a competitive basis. In the case of military applications, cost is generally the least of the considerations. In the case of distant, isolated industrial facilities and towns that require heat and power, the high cost and practicalities of delivering grid electricity to these sites may make factory-built, barge-mounted, floating small modular reactors an economically and technically viable option.

Start-ups, entrepreneurs and even established nuclear plant vendors and OEMs (original equipment manufacturers) are now putting in efforts to develop and commercialise land-based small modular reactors as a low-carbon source of commercial heat and power to compete with other generation technologies, using a wide range of design concepts.

Development of small modular nuclear reactors for commercial power

Currently, there are said to be 84 design concepts being explored around the world, and this needs to settle down to about four or five mature options before the financial risk can be considered to be acceptable.

Some of these “designs” can only be considered as artists’ impressions of what the reactor may look like (through the rose-tinted glasses of the developers). Others can best be described as “paper reactors” at various stages of conceptual design.

Virtually all are not yet at the prototype, pilot plant or commercialisation stage. In fact, there is only one land-based small modular reactor in service globally delivering 125MW of power in China. The design has not yet been licensed for use outside of China.

Delays and cost overruns

As a few of the designs reach the more advanced or prototype build phase, they are experiencing delays and cost overruns as the technical, manufacturing, commercialisation and licensing realities sink in.

Read full article on Daily Maverick.

Recommended for you:

• First Thing: Your daily update on the news that broke while you were sleeping. Sign up
• Business Maverick: Daily business news and analysis from the finest minds at Daily Maverick. Sign up