Nuclear New Build Programme Portfolio Committee on Energy 02 June 2015

1. DOE-NTD-5666 Nuclear New Build Programme Portfolio Committee on Energy 02 June 2015 Mr Zizamele Mbambo: DDG Nuclear

2. DOE-NTD-5666 Contents • Historical Background • Contribution to the SA Economy • Discussion on IGAs an implication for SA • Investment Climate • Skills Development • Communication Strategy • INIR • Challenges • (Extra slides on Applications of Nuclear)

3. DOE-NTD-5666 Background to SA Nuclear Programme

4. DOE-NTD-5666 Background to SA Nuclear Programme

5. Contribution to the SA Economy • Several studies done • TSAPRO in 2008, • Socio-Economic Deep-Dive on all energy sources in 2014-15, • Economic Impact of Nuclear Localisation 2014-15. • Jobs during 10 year construction period for 10GW nuclear depends on localisation extent (assume 80%) • Approximately 30 000 jobs per annum direct to a total of 180 000 (direct+indirect+induced). • Jobs during operational period of 80 years – approximately 12 000 direct jobs per annum to total of 30 000 (direct+indrect+induced) • Indirect effect on economy from low cost, reliable baseload electricity of nuclear is logically positive but cannot be easily assessed.

6. Base Load Supply • By 2030 renewables contribute 42% to new capacity but only 9% to energy production • Nuclear with only 23% of new capacity would contribute 20% to production. • Primarily due to Base Load source • Nuclear will ensure security of supply and dispatchable power.

7. Discussion on IGAs • The Government technical strategies have been developed to address the entire nuclear value chain including economic impact of localization, skills development, Optimal Owner Operator model, Skills development, Funding and financing. Most of these technical strategies have been finalised and some at advance stage of completion • Intergovernmental Agreements (IGA’s) have been signed with vendor countries that have shown interest to participate in the nuclear build programme. To date South Africa signed with China, France, Russia, USA and South Korea. Negotiations underway to conclude IGA’s with Canada and Japan. These IGA’s lay foundation for cooperation, trade and exchange of nuclear technology as well as procurement. The IGA’s also describe broad areas of nuclear cooperation and they differ on emphasis based on unique needs each country

8. Discussion on IGAs, cont • Vendor Parades were undertaken mainly with countries that have signed or at advanced negotiation on IGAs, with China, France, Russia, USA, South Korea, Japan and Canada from October 2014 to March 2015. The South African nuclear professionals from Government departments, State Owned Entities and Universities participated during vendor parade to interrogate the technological offerings to ensure government get the best value for the programme. • National Nuclear Skills development and Training has commenced with 50 trainees from the Government nuclear industry have been sent to China for Phase 1 nuclear training in April 2015. Plans are underway to send an additional 250 trainees to China this year. • The Russian Federation has offered 5 new Scholarships for Master’s Degree in Nuclear Physics. • The South Korea has a standing programme to train South African students for Master’s Degree in Nuclear Engineering • France put in place 14 bursaries for young people coming from previously disadvantaged group. Through this four-years engineering program in different universities, these young professionals will acquire the skills and expertise to support the south-African governmental effort in preparation of the new build program. • In addition, South-African engineers already engaged in nuclear activities will follow job training in France, equivalent to a total of 400 month.

9. Investment Climate • Several studies done on Financing of nuclear build • Owner-Operator financing structures in 2013 • Financing Options, Models and Solutions in 2014 • Structure of the Owner-Operator (Eskom as major shareholder) important to attract good finance and ensure bankability. • Tariff recovery at early stages (during construction) will reduce later finance burden to repay loans in short time. • Wide variety of financing options in the market • Finance is generally available in the global market • Exact mechanism of financing is dependent on market response • Market can only be tested during procurement process.

10. Skills Development Other skills Required UniversityGraduateSkills Required Source: Larkin, et. al IAEA International Conference on HRD 14-16 May 2014 DOE-NTD-5666; A

11. Skills Development • Various studies done by Eskom, NIASA, Universities on skills requirements. • High level skills (University) only a small fraction (<20%) of skills required. • SA has sufficient training and development capacity at the high level skills. • The large number of artisan skills required presents an opportunity for South Africa to build institutional and resource capacity in this area. • Challenge being addressed through Skills Development Strategy – DHET, ESKOM, NNR, NECSA, DST all form part of this work. • Note the advanced skills development initiatives of sending people for training overseas has already commenced.

12. Communication Strategy • Public perception is generally negative: • Economics: • Who will pay for the programme? • How will it be financed, impact on tariff? • Is it cost effective compared to other energy sources? • Will the country be able to afford it in light of Eskom financing issues as well as downgrades? • Safety: • Potential environmental risks v/s socio-economic benefits? • Impact of recent accident at Fukushima, Japan? • How will the waste be managed (storage and disposal)? • Regularoty Authorities’ nuclear safety efforts? • Procurement: • Transparent and respecting country’s laws? • Procedure to be followed and steps ahead?

13. Secret

14. Communication Challenge Human Sciences Research Council Nuclear Survey Results on Knowledge of Nuclear Energy 2011 to 2013 Short term communication strategy needs to be fully implemented to improve knowledge of South Africans on nuclear Extracted from: HSRC SASAS 2011, HSRC Review Volume 10, June 2012; Public Perceptions of Nuclear Science in South Africa, 2013 Tabulation Report by Jarè Struwig, Benjamin Roberts, Mercy Ngungu and Steven Gordon

15. What is INIR? • An Integrated Nuclear Infrastructure Review (INIR) is an assessment of the country’s infrastructure as it relates to readiness to start purchasing, constructing, and operating nuclear power plants; known as Phase I, II, III respectively. • Developed by the International Atomic Energy Agency, it covers 19 nuclear infrastructure issues: National Position, Nuclear Safety, Management, Funding and Financing, Legislative Framework, Safeguards, Regulatory Framework, Radiation Protection, Electrical Grid, Human Resource Development, Stakeholder Involvement, Siting, Environmental Protection, Emergency Planning, Security and Physical Protection, Nuclear Fuel Cycle, Radioactive Waste, Industrial Involvement, and Procurement • An INIR Review Mission It is not an audit, but a peer review by independent experts from the IAEA

16. Rationale behind RSA INIR • Create an integrated national platform • 30 years since last build • Global changes in Nuclear Safety, Security, Finance • National changes – Government • Experienced countries facing significant challenges • Develop Young Generation of nuclear experts

17. SA INIR Action Plan • INIR to be presented to Energy Security Subcommittee and Cabinet for discussion • Ongoing work to integrate lessons learned from this process to South African circumstances as appropriate

18. Challenges • Funding for Capacity Building and Training for the programme to Government nuclear sector • Department engaging with NT on this matter

19. DOE-NTD-5666, A Thank You!!!

20. Non-Power Applications of Nuclear Technology

21. Non-Power Applications of Nuclear Technology

22. Non-Power Applications of Nuclear Technology

23. Non-Power Applications of Nuclear Technology