State's nuke plans could end Eskom monopoly

Posted On Thursday, 20 October 2011 02:00 Published by eProp Commercial Property News
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SA's monopoly energy market is set for a major facelift, with international companies braced to enter the market through the long-awaited nuclear programme.

EskomSA's monopoly energy market is set for a major facelift, with international companies braced to enter the market through the long-awaited nuclear programme, which Eskom says it is unlikely to be able to fund.

Business Day reported on Thursday that Energy Minister Dipuo Peters had confirmed that a planned nuclear programme could be worth R1 trillion "or more". Peters was speaking on the sidelines of a meeting in Paris.

Eskom, which is in the middle of a multibillion-rand capital expansion programme, is unlikely to be able to afford such a costly programme.

In December 2008, Eskom terminated the procurement process for a nuclear project after its board decided it could not make a decision to proceed, due to financial difficulties.

The nuclear proposal that Peters has submitted to the Cabinet is likely to clarify Eskom's role.

The nuclear programme is for provision of 9600MW by 2030.

Total generating capacity by that time is expected to be 85241MW.

Together with the procurement programme for renewable energy, the nuclear programme will see a significant entry of private sector players in the South African electricity sector, substantially eroding Eskom's dominance of electricity generation.

Eskom spokeswoman Hilary Joffe said that after the promulgation of the integrated resource plan (IRP2010), the next step for the government was to decide who would build the new capacity and how it would be funded.

But the magnitude of the programme raises a long-standing debate about its affordability.

"R1 trillion is about a third of the country's gross domestic product (GDP). I do not know if we can afford it. It does not make sense to me to have a nuclear programme that costs about a third of (current) GDP," economist Mike Schussler said on Wednesday.

 

Last modified on Wednesday, 25 June 2014 09:53

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