Cape Town - South Africa will still look at nuclear energy to ease its power shortages and to diversify energy sources, despite utility Eskom's decision not to build a second nuclear power plant.
State-owned Eskom said on Friday the project had become too expensive, especially in the current economic environment.
"The board decided not to proceed with the project because of the sheer magnitude of the investment ... the current situation in the global financial markets would have also impacted our ability to go and raise money for the purpose of funding it," Eskom spokesperson Fani Zulu said.
However, Portia Molefe, director general at the department of public enterprises, said the government still saw nuclear power playing a crucial role in the country in the future.
"The South African government remains committed to introducing nuclear because we have to deal with our carbon footprint and we have to diversify our energy mix," she told reporters.
Molefe said the way nuclear power will be implemented will be different than the commercial procurement process launched by Eskom.
"The core changes is that instead of procuring just one power station, what we will be now looking for is a partner who will co-develop the nuclear industry," she said, adding that a new government task team would set up a new plan.
Affordability
Eskom, which operates Africa's sole nuclear power plant, Koeberg, wanted nuclear power to provide one-quarter, or 20 000 megawatts, of the country's expanded generating capacity by 2025. First power from the second nuclear power plant was expected in 2017/18.
The utility has embarked on a R343bn power investment programme over the next five years, looking to diversify its energy mix away from an over-dependence on coal-fired power stations with their harmful emissions.
Eskom said in November that the plan to build a nuclear plant had to be revisited in the light of the economic climate.
It then said the project might have to be postponed as the credit crisis and the downgrading of Eskom's credit rating had increased the cost of borrowing and would make it difficult for the utility to afford such a large investment.
Zulu said the board's decision not to built the second nuclear plant was not a statement on the offers the utility received from the two bidders - a consortium headed by France's Areva and one led by US-based Westinghouse Electric, a unit of Japan's Toshiba.
"It's not a statement about the price we got from our bidders, but it's a statement about the affordability on our side," he said.
Frederic Diore, South Africa managing director for EDF - part of the Areva consortium - said the company would want to participate in the project whenever Eskom decides to put it back on schedule.
"If Eskom decides to come back to nuclear later we'll still be there and ready to invest if we are welcomed to do so," he told Reuters.
Westinghouse said in a statement that it "remained committed to Eskom and South Africa."
- Reuters
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