South African taxpayers exposed to high-level nuclear w…

South Africa’s Koeberg nuclear power plant, 30 km north of Cape Town. (Photo: Esa Alexander)

Citizens and taxpayers in South Africa continue to operate under the false assumption that Eskom and the Nuclear Energy Corporation of South Africa (Necsa) are creating real funding reserves each month over the life of their nuclear reactors to cover the costs of decommissioning and disposing of high-grade nuclear waste from their Nuclear power plants in accordance with the polluter pays principle.

Page 69 of the 8thth National report Prepared by the Department of Energy and the SA National Nuclear Regulator and presented to the International Atomic Energy Agency (IAEA) in August 2019 with regard to South Africa’s commitments to the Convention on Nuclear Safety, Eskom states with regard to the Koeberg nuclear power plant:

“The financial provision for decommissioning (as well as spent fuel management) has continued to accumulate monthly since the facility began commercial operations in 1984. The financial provision is reflected in Eskom’s annual financial statements. These financial statements are audited in accordance with South African law.

“With respect to the decommissioning financial plans, the amount of monthly decommissioning and provisioning of spent fuel is determined by the present value of the estimated future cash flows. These financial plans are regularly reviewed and adjusted annually and are influenced by the South African inflation rate. “

The problem with these fine words to the IAEA, however, is that they are misleading, perhaps on purpose, and that the so-called provision is actually something of a “Potemkin village” to reassure and impress the IAEA and the public everything is fine and under control.

Indeed, during the operation of the South African nuclear facilities, real money, securities or investments of any kind were used monthly, annually or at any time and in no fund as arrangements for the decommissioning, long-term storage and final disposal of high-level nuclear waste and / or the construction and operation of a high-level nuclear waste repository.

The National Radioactive Waste Disposal Institute (NRWDI) has confirmed that since the inauguration of the Necsa SAFARI-I research reactor in 1966, since the commissioning of Koeberg in 1984 and since the National Act No. 53 on the Management of Radioactive Waste, 2008 was announced in early 2009, no money was put into the proposed radioactive waste management fund that has long been earmarked for this purpose.

The National Institute for Radioactive Waste Management is a South African government agency reporting to the Department of Energy and responsible for the management and disposal of nuclear waste under its enabling laws.

“The fund for the disposal of radioactive waste falls within the scope of the DMRE. The fund has not yet been set up, so no payments can be made to the fund at this time. “ commented Alan Carolissen, the acting CEO of the institute.

Carolissen also announced that the minerals department is currently finalizing the draft law on the disposal fund for radioactive waste, which will be released for public comment in due course. However, no deadlines were given in this regard and the matter has dragged on for years.

In reality, according to Eskom, the so-called provision for the decommissioning and disposal of high-level radioactive waste from the Koeberg nuclear power plant is only a book entry for future obligations, which are estimated at R 16.2 billion and expressed in marginal areas from 2020 . and reported as a liability in Eskom’s heavily indebted balance sheet for fiscal year 2020/21, as opposed to realizable assets held in a dedicated fund for this purpose.

Riedewaan Bakardien, Eskom’s Chief Nuclear Officer, says that of the R16.2 billion R8 billion liability reported in Eskom’s 2020/21 balance sheet, Eskom’s estimated liability for the Koeberg shutdown and sale of low and medium levels are nuclear waste in the existing Vaalputs repository.

The remaining amount of R 8.2 billion is Eskom’s estimated liability for the long-term storage of spent fuel elements on site, for a central interim storage facility and for the development, construction and operation of a deep geological repository for high-grade spent fuel elements Koeberg and the associated transport costs .

On the basis of international benchmarks, however, it appears that Eskom, as the operator, underestimates its obligations for the decommissioning and disposal of high-level radioactive waste from the Koeberg nuclear power plant, not surprisingly.

In Germany, Arrangements for the decommissioning and disposal of nuclear power plants The four large energy suppliers ranged from € 1,300 (R 23,083) per kW of installed capacity at RWE to € 1,700 per kW at EnBW, € 1,800 per kW at E.ON and € 2,000 per kW at Vattenfall.

On this basis, one might have expected Eskom to provide high-level funding for the disposal and decommissioning of nuclear waste for the 1,800 MW Koeberg nuclear power plant in the amount of EUR 2.34 billion to EUR 3.6 billion, ie between R 42 billion and R 64 billion (at an exchange rate of EUR 1 = R 17.80) instead of just R 8 billion.

An article in the states that EDF provides EUR 300 per kW of installed nuclear power for decommissioning in France, EUR 1,400 per kW in Germany and EUR 2,700 per kW in the United Kingdom. Eskom’s liability for the decommissioning and disposal of waste from spent fuel elements from Koeberg, on the other hand, is only € 250 per kW of installed nuclear power.

The French National Assembly commission has found that the rehabilitation of French reactors will take longer, more difficult and cost much more than EDF expects and the commission is quoted as follows:

“Other countries have started dismantling their power plants and the feedback we have received generally contradicts EDF’s optimism about the financial and technical aspects of the closure.”.

When asked whether the liability of R 16.2 billion is reflected in Eskom’s balance sheet for decommissioning, long-term storage and disposal of high-level waste and the construction and operation of a repository, the spokesman for the National Nuclear Regulator spoke (NNR). Gino Moonsamy replied:

“While Eskom sets up financial provisions for decommissioning in the annual financial statements, the NNR is currently reviewing all relevant provisions for decommissioning. The NNR engages Eskom in this regard … “, and “The NNR is reviewing the legal framework, including the licensing conditions, in order to tighten the conditions for decommissioning.”

Eskom has confirmed that the provisions for the future decommissioning, storage and disposal of waste are integrated into the internal transfer prices (rand per kWh) of the electricity generated by Koeberg in the Eskom network. Therefore, these provisions will ultimately be reclaimed from customers via the electricity tariffs approved by Eskom Nersa.

Carolissen also points out that once the Radioactive Waste Management Fund is set up, Eskom and Necsa will have to settle their decommissioning, waste disposal and final storage liabilities by paying real money into the fund.

However, as mentioned above, the problem is that Eskom and Necsa did not reserve any earmarked funds for this purpose. Both companies are technically insolvent and do not go any further and only continue their business activities through regular bailouts by taxpayers through the sole shareholder, the state.

Questions that we should therefore all be asking the Government, the Department of Energy, the Nuclear Regulatory Agency, Nersa, the Institute for the Disposal of Nuclear Waste, Necsa, Eskom and the South African nuclear sector are:

  • Who should bear the costs of decommissioning nuclear power plants and the long-term storage and disposal of high-level radioactive waste – the polluter, the customer or the taxpayer?
  • Where are Eskom and Necsa’s real asset funds for future decommissioning, long-term storage and disposal of high-level radioactive waste?
  • Does the polluter pays principle apply in practice or does the customer and taxpayer end up paying twice through government rescue operations?

One can only guess who, when the time comes, will bear the real costs of decommissioning, storage, disposal and final disposal at a high level – perhaps not the polluter at all, but the children of our children as taxpayers of the next generation. DM

Chris Yelland is that Managing Director of EE Business Intelligence.

© Copyright 2021 – EE Business Intelligence (Pty) Ltd. All rights reserved. This article may not be published without the written permission of EE Business Intelligence.

Top is reading this hour

Comments are closed.