August 31, 2015 / 10:00 AM / in 4 years

South Africa says "no deal" struck with any country on nuclear expansion

PRETORIA (Reuters) - South Africa has not struck a deal so far with any country on nuclear expansion but its immediate focus was to build more renewable power projects, the energy minister said on Monday.

Pylons carry power from South Africa's Koeberg nuclear power plant near Cape Town August 13, 2015. REUTERS/Mike Hutchings

The government of Africa’s most advanced economy, which is battling an energy crunch, said in May it will procure a nuclear fleet to generate 9,600 megawatts of power this year, estimated by analysts to cost as much as $100 billion.

“There is no deal that has been struck with any country,” Energy Minister Tina Joemat-Petterson told journalists at a media briefing near Pretoria.

Joemat-Petterson dismissed the projected cost of the nuclear build, saying the Treasury and the Department of Energy was still working on a funding model, without giving details.

“Once that model is complete, we will decide on time-frames,” she said.

The government was due to release its bid requirements by end July, but this has been delayed.

Concern is mounting that agreements to build the nuclear power plants that could be the most expensive procurement in the country’s history will be made behind closed doors, without the necessary public scrutiny.

“Once we have taken a decision as a government and cabinet, we will communicate. There is no secrecy,” Joemat-Petterson said.

President Jacob Zuma’s government signed agreements with France, Russia, China, South Korea and energy officials said they were speaking to Japan, Canada and the United States about possible co-operation.

The process appears to be delayed following concerns that the Treasury is not included in the procurement discussions, despite its budgetary implications.

Joemat-Petterson said there was “no rush” for nuclear power and that South Africa was focusing on renewable and gas power generation projects to address the immediate energy shortages.

“That is why we went ahead in announcing the additional acquisition of renewable energy, that’s why the renewable energy programme is so important, that is why gas is so important. It’s our immediate solution to our current challenges,” she said.

However, new renewable energy projects will find it hard to connect to the grid, an official said, saying that the department was working with power utility Eskom to improve access for new projects.

“We need to upgrade the grid so the new projects can feed,” head of Independent Power Producers unit Karen Breytenbach told Reuters.

President Zuma opened South Africa’s first new power plant in 20 years on Sunday with a warning that the perennial energy shortages were hampering economic growth.

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