DoE R1 trillion nuclear programme likely to be funded with electricity tariff hikes

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Today the Department of Energy (DoE) and the South African Nuclear Energy Corporation (NECSA) appeared before the Portfolio Committee on Energy to brief it on the Nuclear Build Programme.


From today’s briefing it is clear that government has brazenly chosen to pursue the nuclear build despite it being fraught with financial and infrastructural limitations


Of great concern are the cagey and evasive responses provided by the Department on the proposed financing models for what will be SA’s most expensive public procurement process ever.


Only a single slide in the presentation provides the public with information on the funding.


In the slide it is suggested that the DoE, through Eskom, intends to finance this programme by way of “tariff recovery at early stages” – also known as the Medupi/Kusile model where the consumer carries the cost of the new build through tariff increases.


From this information, one can only conclude that the DoE intends to fund the nuclear programme through massive electricity price hikes.


This will inflate the cost of running a business, cause widespread job losses, and make electricity unaffordable for many South Africans.


At an estimated cost of R1 trillion before cost over runs (almost 70% of new nuclear build projects are behind schedule), the choice to go nuclear is nothing short of absurd.


It cannot be fair that the taxpayer will end up paying for a programme which may very well cost in excess of the R1 trillion.


The DA will therefore call for a debate of national importance in Parliament on the severe consequences of the nuclear build programme for all South Africans.


Today’s briefing follows Energy Minister Tina Joemat– Pettersson’s announcement, in her budget speech a week ago, that her Department will begin with the nuclear procurement process in the second quarter of this financial year. The Minister expects to present the outcome of the procurement process to Cabinet by year end.


Considering South Africa is not close to being ready to roll out nuclear to the public, Minister Joemat-Pettersson’s apparent insistence and haste is alarming and, frankly, irresponsible.


The DA is primarily concerned with the impact of the proposed Nuclear Build Programme on SA’s potential economic growth as well the impact on the long-term electricity pricing path. We want clear answers as to the potential impact on input costs across the economy and an assessment of the impact on jobs.


We want clarity on the impact on electricity prices – will the poor for example be effectively priced out of legal electrical usage?


Will higher prices mean the proliferation of illegal connections – already sitting at about 8% nationally? Will higher prices encourage the non-payment culture that is increasingly prevalent in protest to poor electricity governance?


The DA is on record as stating that the pursuit of the NBP at this juncture is premature, dangerous and reckless. This is not, as some have contended, that the DA is anti-nuclear.


The DA’s concerns regarding the acquisition of nuclear are primarily driven by issues that affect real South Africans on the ground, many of whom are poor and struggling under existing economic and electricity woes.

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  • Owl

    So the Eskom fiasco was simply the practice run.

    • Ren

      My word, Owl….I can’t believe they’d even consider something so crazy.

      • Owl

        I can. Same as the e-toll setup, there is no logical, economic reasoning behind it, so it HAS to be a Cadre-enrichment program!

  • Justin Glenn

    What does she even know about nuclear energy she has a BA in English and History with no science degree.

  • Ren

    Is the ANC senile or what?

    I’m astounded.

    EDIT: DA, you need to blow this up sky high in the media. And keep doing this so everyone in SA hears you.

  • sandybee

    Let them do nuclear if there is a price hike, everyone will and is already moving to Solar. It’s even financed now by major banks. Eskom is going to kill itself. We are South Africans and our motto has always been – ‘n Boer maak ‘n plan. Solar power is going to become cheaper the more people move over to it. Yes I know there are other issues but hey, this will make us stronger, and yes change is hard.

  • Colette Hinton

    Not only will South Africans pay AGAIN for the disastrous management of all things energy related, but the thought of people who are unable to generate regular electricity being in control of Nuclear Energy makes my blood run cold! Somebody should explain to our highly intelligent President and his cabinet that if they fry all of South Africa with their inability to manage ANYTHING, they will have no more people to fleece – and poor Zuma will be unable to build a second Nkandla!

  • marco

    This is extremely scary. First of all the money to fund this project will bankrupt the country. Secondly the rest of the world is on the brink of moving to clean energy, and we’re building Nuclear. We all have to stop this in its tracks somehow.

  • Clark

    DA it’s time to put more bill boards up around the country. Name and shame so all people in SA can know what the ANC are getting up to #ChangeYourVote