There is still scepticism about whether South Africa will ever ultimately have nuclear power by 2035 or not – but the process is underway, and will have a fiscal impact, says financial research firm, Nomura.<\/p>\n
In a note to investors this week, Nomura research analyst Peter Attard Montalto said that, while nuclear energy as a technology of interest, it makes little sense for South Africa.<\/p>\n
“It is not clear South Africa needs another 9.6GW of capacity added between 2025 and 2030,” he said<\/p>\n
“Increasing energy efficiency of demand and improved supply efficiency from Eskom with Medupi and Kusile coming on-stream, alongside renewables will add around 12.5GW by that time – and that is even before you get to Coal-III and gas tenders in a low growth environment.”<\/p>\n
Nomura holds a sceptical view about whether nuclear – a new nuclear power station actually adding electricity to the grid – will happen at all in South Africa, he said.<\/p>\n
However, he added that the process is underway, and may even proceed as far as breaking ground on the project. By this point, money would have already been spent on the project.<\/p>\n
“But the force of civil society and political opposition (including in the ANC) should not be underestimated,” the analyst said.<\/p>\n
According to the analyst, there are a number of hurdles for nuclear energy in South Africa, on top of the civil and political push-back. Chief among them is National Treasury, which will need to sign off on “hard tendering”, which is supposed to kick off at the end of 2016.<\/p>\n
Because this will add further pressure to president Jacob Zuma and his faction in the ANC, this process might be delayed to 2017 – which will only be one of many delays on the project.<\/p>\n
“Such mega projects cannot be brought in on time and on budget and without rent extraction within the South African context,” the analyst said.<\/p>\n
Ultimately,\u00a0a\u00a0court case on the matter set for December, and papers to be made public in parliament on confidential international framework agreements, will be pivotal in nuclear’s future in the country.<\/p>\n
“The important thing on this issue is not the end point but the process of getting there and what it does fiscally and to politics – and this is why investors’ interests are currently piqued,” Attard Montalto said.<\/p>\n
If we don\u2019t go nuclear, SA will face 2008-level power crisis: Molefe<\/a><\/strong><\/p>\n Eskom takes nuclear power plant unit offline for maintenance<\/a><\/strong><\/p>\n