André de Ruyter moves to clarify Eskom modular nuclear tender
He said the wording of a tender that suggests Eskom wants to revive dreams of building such nuclear plants, is ‘rather unfortunate’
André De Ruyter, the new CEO of struggling utility Eskom, moved to address confusion over a tender released to the market, which suggests that Eskom wants to revive costly dreams of building small, modular nuclear plants.
Speaking at a media briefing on Friday, De Ruyter said Eskom is “not about to build new modular nuclear reactors”, calling the wording of the document released on Thursday “unfortunate”.
He said the intent is instead to solicit “interest in the potential acquisition of the modular reactor fuel plant” and have this “burden” taken off Eskom’s hands.
The request for information (RFI) sparked headlines suggesting that Eskom wanted to commercialise its long-mothballed Pebble Bed Modular Reactor (PBMR) technology. The PBMR is an SA developed version of a small, high-temperature nuclear reactor, and the accompanying fuel, which never reached commercial viability and was folded into Eskom after the state cut funding to the project in 2009.
In the document, Eskom said it is seeking to take the PBMR out of care and maintenance. It also asks companies interested in “investing in PBMR reactor technology or fuel technology, securing an equity stake, buying PBMR technology or products or embarking on other potential relationships or transaction” to come forward.
“We have spent, over the years, as SA, a lot of money developing the PBMR technology, ” De Ruyter said. “That costs us money we don’t particularly want to spend, and therefore we have approached the market with a view to understanding who would be interested in taking over that facility and relieving us of this burden.”
Disposing of PBMR
In a statement later on Friday afternoon, Eskom said the tender is “intended to publicly solicit and to determine an interest from the market in the future takeover of the technology”.
“While various options were explored to commercialise PBMR in the past, Eskom now intends to dispose of the company, providing the market with unrestricted options to pursue,” it said.
Though the PBMR project never resulted in an operating, commercial plant, the development of the fuel — or the “pebbles” — was purportedly far advanced when it was wound down.
The move to garner potential buyers for the technology comes as Eskom battles both severe financial and operating difficulties.
The power utility, which is battling under R450bn in debt, has plunged the country into rounds of load-shedding, weighing on the economy’s growth prospects. Its precarious financial position has forced the government to earmark R230bn in support from the fiscus in the coming decade.
This has hurt the government’s own financial position, causing the budget deficit to widen to an estimated 6.2% of GDP and sent government debt levels soaring to 60.8% of GDP.
After being placed into care and maintenance, the PBMR project was re-incorporated into Eskom in 2012, according to the RFI. Eskom has since held on to extensive intellectual property — including nearly 300 patents, numerous trademarks, and design and engineering calculations for the reactor and fuel manufacturing facilities.
The PBMR was designed to be small and modular — enabling the incremental addition of generation units to a national grid. But the technology — first developed in Germany — has had a difficult history in SA, the Mail & Guardian has reported.
Started in 1999, the state spent about R10bn on developing the technology before then public enterprises minister Barbara Hogan called time on the project in the wake of the global financial crisis and the need for government to prioritise its spending.
At the time, it required an estimated R30bn in further support.
With Carol Paton