Eskom's Koeberg Nuclear Power Station near Cape Town. Picture: SUNDAY TIMES
Eskom's Koeberg Nuclear Power Station near Cape Town. Picture: SUNDAY TIMES

The 2019 Integrated Resource Plan (IRP) has formally made it national policy to extend the Koeberg nuclear power station’s operating life from 40 years to 60. This will move the station's close-down date from 2024 to 2044.

While many anti-nuclear activists will oppose this, it is fully in line with world practice for this class of reactor. In the US, applications have now been made to extend some reactors’ lives to 80 years of operation, and there are studies on moving to 100 years.

While this is presented in the IRP as a new policy position, it has been Eskom’s intention to do this since at least 2010, when Eskom’s submission to the last IRP placed Koeberg’s shutdown date as 2044. In fact, the current programme of upgrade work at Koeberg, including the recent changing of the reactor water storage tanks (the PTR tanks) and the contracting for and recent delivery of replacement steam generators, is fully aimed at and justified by a 60-year operating life.

The discussions on the nuclear regulations requiring a specific approval to go beyond 40 years is a function of a recent change to Koeberg’s operating licence, which now includes such a specific requirement. Prior to this change in the regulations (possibly made in 2019) the licence included no specific end date, only the requirement to continually confirm the safety of the plant against regulations.

The work Eskom was doing to justify continued operation was already being done from about 2010 and was fully aligned to International Atomic Energy Agency practice. What is interesting is that Eskom’s accounting principles have always had a conservative date for the station’s shutdown and related decommissioning. Inspection of the Eskom accounts shows that a full provision for Koeberg’s decommissioning will be in place by 2024 and the depreciation of the investment in Koeberg (excluding the recent upgrades) will be complete.

This raises the question of what the simple economic case for Koeberg’s ongoing operation is, and how it affects the overall value of the SA nuclear programme to the country. Eskom’s statements over the past few years have indicated the cost of Koeberg’s operation ranges from 45c/kWh to below 30c.

The difference may be explained by the lower number being direct operating costs (staff, maintenance, fuel), and the higher including the overall Eskom overhead, environmental levy, depreciation, decommissioning and financing costs. For the purpose of this discussion the 45c/kWh figure will be used.

If the cost of Koeberg’s power is 45c/kWh, what is its value? The current tariff for the “high season” to bulk customers is in the order of 90c and for the “low season” about 70c. If Koeberg’s post-life extension (2024-2044) was to be seen as a “new” low carbon, dispatchable generator, its value to the system, considering were it is on the grid (1,400km from the next baseload station, Lethabo) could be considered to be about 80c/kWh.

This could be an index-linked, 20-year power purchase agreement (PPA) similar to those of the renewable energy independent power producer (IPP) procurement projects. This would certainly be very competitive with the contracts for these projects, and even the just-signed ones, which only offer intermittent supply.

If one takes Koeberg’s annual output at 960MW per unit, and an energy availability factor of 85%, the annual production at Koeberg should be 14.3TWh (terrawatt hour). It is of note that the Eskom plans with the new steam generators include a 10% uprating of the plant, which would put the unit output to some 1,065MW, or an annual output of 15.9TWh.

Given this 14.3TWh with a cost of 45c/kWh and a PPA at 80c/kWh, the total cost of Koeberg would be R6.44bn with an income of R11.44bn, resulting in an annual positive cash flow of some R5bn. Clearly, if the planned uprating of Koeberg to 1,065MW did not increase costs the income would increase to R6.3bn.

What is interesting is if the SA nuclear industry were to be seen as a single asset to the country, the current cost of the Nuclear Energy Corporation of SA (Necsa) of below R1bn a year, mainly to discharge national nuclear obligations, would still leave a positive balance of some R4bn. If a small modular reactor (SMR) programme was started, the costs over the 10 years to get the first unit proven would clearly come inside the R40bn of free cash flow as the current estimate for a 200MW high-temperature SMR is some $1.5bn, or R24bn.

In fact, the replacement of the current Necsa Safari-1 reactor to maintain SA’s leading position in the medical isotope field could also be funded. Maybe the country should be looking at the current national nuclear activities as an integrated financial package.

• Nicholls is chair of Nuclear Energy Corporation of SA.


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