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Ministerial Agreement Threatens Tariff Increases & Koeberg Nuclear Safety

  • 7 min read

Conflict between a 2019 ministerial agreement and the country’s national electricity roadmap, the Integrated Resource Plan 2019 (IRP 2019), has been brewing.

The ministerial agreement pre-dates the final IRP 2019 and stipulates that a new nuclear plant for Koeberg must be procured by 2024, while the IRP 2019 does not. It further states that Koeberg’s lifespan must be extended by another 20 years beyond its intended lifespan.

Activists and organisations are looking for clarity from President Ramaphosa as elements within Eskom and the Department of Mineral Resources and Energy (DMRE) use the ministerial agreement as a justification for pushing forward with a nuclear agenda which would increase electricity tariffs as well as escalate the nuclear risks at the Koeberg Nuclear Power Station near Cape Town.

Ramaphosa requires ministerial agreements

In 2019, in an attempt to address poor service delivery, President Ramaphosa required each national minister to sign a performance agreement. Shortly after Gwede Mantashe as Minister of Mineral and Energy Resources signed his agreement, South Africa’s final IRP 2019 was released. In contrast to the previous IRP from 2010 and earlier draft versions of the IRP 2019, it included no new nuclear power up to 2030, the end of the modelling period in the least cost scenario, as it would result in an unnecessary increase in tariffs.

Koeberg Alert Alliance (KAA) wrote to the President’s office on 1 March 2021 outlining the problem and requesting that consideration be given to adjusting the performance agreement to reflect the IRP 2019. Receipt was acknowledged but no response has been received to-date.

Academics agree that the situation is problematic. “The IRP 2010 is now defunct and cannot possibly be the basis of current policy nor the basis on which the president makes the minister accountable,” says environmental sociologist and long-standing observer of the nuclear industry, Dr David Fig. “We have all moved on since then.”

“The contradiction between the outdated ministerial performance specs and the latest IRP makes it urgent to remove nuclear from the minister’s performance criteria,” according to retired political scientist from the University of the Western Cape, Keith Gottschalk.

“There can be no parallel policy and decision-making structures in government as the constitution prescribes cooperative governance and good inter-governmental relations as the key element of transparent and accountable government,” says University of South Africa’s Political Sciences Professor, Jo-Ansie van Wyk. “Parallel structures and performance agreements not aligned with policy do not meet these constitutional obligations.”

“To still include any new nuclear build in the Minister’s performance agreement, and to say that it must be procured by 2024, is simply absurd,” according to a researcher at the social and environmental justice organisation Project 90 by 2030, Richard Halsey. “To make matters worse, the members of the National Energy Regulator of South Africa (NERSA), who would have to authorise any nuclear deal before it can go ahead are all appointed by none-other than Gwede Mantashe. So much for NERSA being an independent gatekeeper.”

Ministerial agreement used as basis for nuclear procurement

This ministerial agreement has recently been used by the Department of Energy Director-General, Adv. Thabo Mokoena, and the Deputy Director-General for Nuclear Energy, Zizamele Mbambo, as motivation for pressing ahead to complete the nuclear procurement by 2024. This was during a parliamentary oversight meeting for the Department of Mineral Resources on 23 February 2021.

Recently announced as the civil society representative on the board of the National Nuclear Regulator (NNR), KAA’s spokesperson, Peter Becker, says, “Since that ministerial agreement was written in the context of the IRP 2010, in effect Mantashe and the various departments involved are acting according to that ten year old plan for nuclear power and ignoring the IRP 2019.”

“The IRP 2019 focused on the least cost of electricity, going against its provisions will obviously result in higher tariffs,” says Becker.

Organisation Undoing Tax Abuse (OUTA) Parliamentary Advisor, Liz McDaid points out that the agreement seems to favour nuclear power over other options. “Why is it that the minister’s performance agreement focuses on outdated supply options such as nuclear and does not even mention renewable energy sources?” says McDaid.

What does the IRP 2019 say?

The IRP 2019 Decision 8 reads: “Commence preparations for a nuclear build programme to the extent of 2500 MW at a pace and scale that the country can afford because it is a no-regret option in the long term.”

While this does not include words such as “procure” or “construct”, it appears that the DMRE considers construction of a new nuclear build at Koeberg to be part of the “preparations” referred to.

In Eskom’s recent response to the Nuclear-1 Environmental Authorisation related to granting the utility permission to build a new nuclear plant at the Koeberg site, 27kms north of the city of Cape Town, they stated: “The country’s policy-makers have taken a decision to go ahead with nuclear, as part of South Africa’s energy mix. Preparations for the commencement of the project, including construction, will commence prior to 2030.”

Koeberg’s future in question

Another key part of the ministerial agreement was that Koeberg’s life must be extended beyond 2024 by 20 years. The current licence for the plant expires in July 2024 and it must apply for a licence from the NNR to operate beyond that date and Eskom has stated that it will do so before the end of 2021.

A recently released, heavily redacted Eskom document revealed that 40 years of exposure to sea air at Koeberg has damaged the concrete of the containment buildings. At one stage the concrete containment dome was found to have cracked around the entire 110 meter circumference.

The Eskom report states that corrosion has happened at an unexpected rate and says: “It is clear that the original designers did not fully comprehend the severe environmental attack which the structures would be subjected to.”

“We are further concerned about reports of more damage referenced to in the censored parts of the report, and are taking legal steps to challenge the reasonableness of Eskom’s decision to keep that information secret,” says Becker.

Conflict of interest

Mantashe appoints the members of the NERSA, the CEO of the NNR, and all members of the NNR board. Mantashe’s performance agreement means he has committed in writing to procuring a new nuclear plant by 2024, and extending the life of Koeberg by 20 years beyond its design lifetime.

“If there are factors which make the life extension unsafe in the opinion of the NNR,” says Becker, “there is the risk that the Mantashe simply appoints a new, more sympathetic board, in order to achieve his ministerial performance targets.

“It would not be the first time that the board of a state owned entity in South Africa is replaced for ulterior motives. Even if the board or CEO is not replaced, it will be clear to them that by refusing or delaying this licence they would cause their minister to miss his performance targets as mandated by the President,” he says.

Failing to act and have oversight puts safety of Koeberg and Cape Town at risk

Ministerial performance agreements are a useful tool towards ensuring service delivery but it is clear that they can also muddy the waters of government planning when they include specifics which contradict formal planning documents such as the IRP.

These ministerial agreements should be living documents, which are monitored and subject to change as the environment changes. This is particularly true in the field of energy, which is an industry currently going through a major transition leading to high uncertainty about the future.

Mantashe and the DMRE’s efforts to drive the nuclear agenda forward are in line with the commitments made in the ministerial agreement but it is an ongoing oversight on the part of the President to fail to update this performance agreement to align with the IRP 2019.