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Electricity price hikes to fund R1 trillion SA nuclear build

Electricity price hikes to fund R1 trillion SA nuclear build

The Democratic Alliance says that the Department of Energy (DoE) aims to fund its R1 trillion nuclear programme with electricity tariff hikes.

The DoE and the South African Nuclear Energy Corporation (NECSA) appeared before the Portfolio Committee on Energy on Tuesday (2 June) to brief it on the Nuclear Build Programme.

Energy Minister Tina Joemat-Pettersson recently said that South Africa will start a nuclear build programme in 2015, in a bid to generate an additional 9,600MW of electricity.

The country will have six new nuclear power plants by 2030, which will cost between R400 billion and R1 trillion to build, according to a report by Reuters.

“From today’s briefing it is clear that government has brazenly chosen to pursue the nuclear build despite it being fraught with financial and infrastructural limitations,” said
DA Shadow Minister of Energy, Gordon Mackay.

“Of great concern are the cagey and evasive responses provided by the Department on the proposed financing models for what will be SA’s most expensive public procurement process ever,” he said, noting only a single slide in the presentation providing information on the projects funding.

“In the slide it is suggested that the DoE, through Eskom, intends to finance this programme by way of ‘tariff recovery at early stages’ – also known as the Medupi/Kusile model where the consumer carries the cost of the new build through tariff increases.

“From this information, one can only conclude that the DoE intends to fund the nuclear programme through massive electricity price hikes,” the shadow minister said.

The National Energy Regulator (Nersa) is set to make a decision whether it will authorise Eskom’s application to hike tariffs by 25.3% on June 29, 2015.

“This will inflate the cost of running a business, cause widespread job losses, and make electricity unaffordable for many South Africans,” Mackay said.

He said that at an estimated cost of R1 trillion before cost over runs, the choice to go nuclear “is nothing short of absurd”.

Minister Joemat– Pettersson’s announced in her budget speech a week ago, that her Department will begin with the nuclear procurement process in the second quarter of this financial year.

The Minister expects to present the outcome of the procurement process to Cabinet by year end.

“Considering South Africa is not close to being ready to roll out nuclear to the public, Minister Joemat-Pettersson’s apparent insistence and haste is alarming and, frankly, irresponsible,” the DA said.

The DA said it is primarily concerned with the impact of the proposed Nuclear Build Programme on SA’s potential economic growth as well the impact on the long-term electricity pricing path.

More on Eskom and SA electricity

Eskom power constraints a major concern: Reserve Bank

SA’s R1 trillion nuclear power plans

BusinessTech's Staff Writer is directly plugged into the South African Internet backbone, and spits out press releases and other news as they receive it. They are believed to be cl...
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  • Instead of doing a slow price hike and not wasting money, this could’ve been planned properly in the past 10 years but NOOOOO this is South Africa and people only get off their chairs when the hut is already half burnt. Also, if a private company with a private grid organization would build this nuclear power plant, it would cost half price.

    • baasted_123

      and done in 5 years in stead of 25…

  • sorry, your country seems so ph#cked by the monkeys that have obviously been running it for the past decade or longer.

    • Mo Haarhoff

      What rubbish. We’ve had load shedding on and off since 2008. Go back in history.

  • CharlieTango

    Why are we even considering nuclear power when there are more sustainable options? If government were to take that R1 trillion and invest it in solar we would see the end of our electricity generation problems. Once again bribery leads the way.

    • Warchylde

      But of course. Loot freely house has their fingers in all the pies that will be supplying to the new contracts.

    • Wayne Gemmell

      That’s fantastic till the lights go out. You still need something like nuclear to handle the base load.

    • Biloko

      Very true, Charlie Tango – one of the things that SA has in abundance is sunshine, and that is where SA should be looking for the provision of electricity.

  • Warchylde

    This will simple hasten conversion to solar with battery packs. At the current escalation even higher end middle class families wouldn’t be able to afford electricity in the next two to three years.

  • EVERYTHING the cANCer does, will be funded by hikes imposed on the oppressed minority – also known as the tax payer – we have become ANC ATM’s

    oh just hike this and hike that….

    but don’t Mr. nkaaaaaaaaaaaaaaaaaaaaaaandla, he gets everything for free.

    Zuma is worth R2.50 never mind R250 million.

    heal SA, vote the cANCer out.

  • Sean

    BS. It is to fund their ever growing need for MORE fcking money!!!!!!!!!!

  • Ingrid Denzin

    You have to laugh.They want Russia to build this nuclear power plant, but Russia is reeling from sanctions. It’s just another Durban-poison inspired pipe dream to make the masses feel warm and fuzzy and keep the remaining taxpayers scared. Absolutely nothing will happen. Eskom is bankrupt.

  • Mo Haarhoff

    Good enough reason for us all to down tools June 19.

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