September 23, 2009 / 10:45 AM / in 8 years

Pebble bed nuclear firm sees S.Africa government support

PRETORIA (Reuters) - South African nuclear technology firm PBMR expects the government to use its new pebble bed technology to diversify the energy mix away from coal, but funding problems persist, the company’s head said.

<p>General view of the nuclear power plant at Biblis near Frankfurt July 14, 2009. REUTERS/Johannes Eisele</p>

South Africa is one of the pioneers in developing a power and heat processing plant based on the pebble-fuel technology.

The public has questioned whether the government should keep spending billions of rand on a technology not yet proven, especially in the face of the economic slowdown.

But Jaco Kriek, chief executive of the Pebble Bed Modular Reactor (PBMR), said the investment made sense, especially if South Africa wants to develop its own, local nuclear industry.

“The government is considering this seriously and I would be surprised if they are not going to use this asset for the total nuclear programme,” Kriek told Reuters in a recent interview.

U.S.-based Westinghouse Electric, majority owned by Japan’s Toshiba Corp, power utility Eskom and South Africa’s Industrial Development Corporation have so far invested some 8 billion rand to prove the technology since 1999.

South Africa has said it expects nuclear to play a key role in reducing the country’s carbon footprint, given the need for the largest economy in Africa to move away from fossil fuels, now responsible for 90 percent of its electricity generation.

But investing in nuclear energy is difficult for state-owned Eskom which battles to meet rising demand and struggles to source funds for its expansion due to tight credit markets.

MODULAR NATURE

Kriek has said in the past that the first pilot plant to generate heat and 80 megawatts of electricity could come on stream by 2018, with initial costs estimated at 27 billion rand.

“We are aiming for 2018, but funding and licensing is an issue ... outside our control,” he said.

The company is seeking other investors for the programme, including partnerships with other governments. Kriek does not foresee private investment in the programme at this stage.

The company will seek to reduce the cost of the plants to around 6 billion rand to make them economically viable to compete with other energy and heat sources such as gas and coal.

“If we can come in at about a 20-30 percent mark-up on conventional nuclear, then we are in business,” he said.

A pebble bed reactor will never be able to compete with a conventional pressurised water one, Kriek said, but its benefits lay in its size and modular nature, which fits Africa’s needs.

“This technology is ideally suited for Africa ... it’s decentralised energy, you avoid long transmission lines and it is attractive because it’s modular and you can adapt it depending on your customer,” he said.

Kriek said he would like PBMR to become the nuclear design authority in the country and spearhead the efforts to develop a local nuclear industry to boost exports of the country’s products as well as to ease pressure on the balance of payments.

He said that while China, which is developing the same technology and is planning to have its first test plant up and running by 2013, would be the pioneer, he saw vast opportunities to market PBMR and sell the technology within Africa and beyond.

PBMR has already established links with Europe, the United States and Canada to smooth the way once the design for the plant has been commercialised.

Earlier this month PBMR signed a bilateral nuclear agreement with the United States to cooperate on the pebble bed programme.

“We have put our foot in the door everywhere,” he said.

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