Part Four | How Koeberg’s story impacts today: New Frame

Hardly a week goes by that the Minister of Mineral Resources and Energy, Gwede Mantashe, does not tell us that the Koeberg nuclear power station produces the cheapest electricity in South Africa. Such is the rhetoric in support of the government’s push for more nuclear power plants that you’d be forgiven for thinking Koeberg was given to the country as a gift. This is of course far from the truth.

Despite the Minister’s fine rhetoric, Koeberg’s construction went well over budget. And in the end, there were serious concerns about whether it was economically viable.

The projected cost varied widely after its first official announcement in 1968, rising and falling, sometimes in the same year. Early news reports in 1968 estimated a cost of R150 million for a 1,000 MW plant. In early 1970, Eskom stated that the power station would cost at most R120 million. Only three years later, the company was quoting R400-500 million for a 2,000 MW plant, lamenting that the cost of nuclear power is not falling as it had expected.

A year later, in 1975, Eskom estimated a total cost of R630 million. This figure more than doubled in 1976, when the Minister for Economic Affairs stated that Koeberg would probably cost R1.15 billion to build, with an additional R350 million needed to pay interest on French bank loans (French banks have financed more than 80% of Koberg). At that time, several economists called for the project to be abandoned, saying that the country could not afford it.

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  • First part | The impact of Koeberg’s story today

Just before Eskom fired the first reactor in March 1984, it appeared that electricity produced by Koeberg would be more expensive than that produced by coal-fired power stations in Cape Town, despite the costs associated with shipping the coal Across the country. “We will end up paying more for the dubious privilege of living side by side with a monster none of us ever wanted,” an editorial in the newspaper said. Cape Town weather newspaper in February 1984. At the end of that year, Eskom admitted that “additional and unforeseen” costs had resulted in a cost overrun of R519 million at Koeberg.

The situation had gotten so bad that the company’s chairman had to publicly state in 1985 that despite the current cost of over R3 billion (about R400 billion today), the power plant “appeared ‘to be'” an economic proposition. This claim was debunked a year later, in March 1986, when the Minister of Mines and Energy Affairs admitted that the electricity produced by Koeberg cost three times that produced by Eskom’s coal-fired power stations.

These cost problems at Koeberg persisted well into the 1990s, as the plant was plagued with problems that saw each of its reactors repeatedly shut down, dramatically affecting the amount of electricity it could generate. In 1990, Eskom’s general manager of production said that if costs could not be reduced, nuclear power plants would “remain an expensive novelty” in South Africa.

Same error

The ANC acknowledged the excessive costs associated with Koeberg at a conference in 1994 to consider a “nuclear policy for a democratic South Africa”. During this conference, Trevor Manuel remarked in his opening address that “our main concern should be to ensure that scarce resources are spent in a way that is suitable for the development of the country. The billions wasted on the nuclear program by the Ministry of Minerals and Energy Affairs can never be justified.

Interest on foreign currency loans was a major cost driver that led to overspending for Koeberg. This is the same cost factor that the National Treasury says would cripple South Africa financially if the Jacob Zuma nuclear deal had gone through. The same cost factor that will make any future nuclear deal totally unaffordable, threatening the national tax office.

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  • Part Two | The impact of Koeberg’s story today

And none of the costs for Koeberg – then or now – take into account the multi-billion rands that will be needed to dismantle the plant, nor the multi-billions that will be needed to deal with the legacy of its hazardous radioactive waste. Despite claims to the contrary, Eskom has not set aside any funds to cover these significant additional costs. They alone guarantee that Koeberg has never been and will never be an economic proposition, just as nuclear energy has never been an economic proposition anywhere else in the world.

Mantashe attended the ANC conference in 1994 on South Africa’s nuclear future as a representative of the National Union of Miners. We can only assume that he missed Manuel’s opening speech.

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  • Third part | The impact of Koeberg’s story today
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