and Energy, at the French-South African conference on energy, Cape Town
International Convention Centre
20 February 2007
Honourable Minister Mr Francois Loos,
Distinguished members of Government,
Distinguished leaders from business,
Leaders from nuclear stakeholder organisations,
Honourable guests,
Ladies and gentlemen
It gives me great pleasure this morning at the opening of this august
meeting, here in South Africa, in the scenic surrounding of Cape Town,
traditionally referred to as the Mother City of South Africa, the seat of
Parliament and incidentally, home to South Africa's Koeberg Nuclear Power
Station, that was designed by and commissioned with the assistance of France,
in the early 1980's.
The ongoing co-operation and assistance from France and its people is
clearly evident by their recent supply of the replacement rotor for the turbine
of the Koeberg Nuclear Power Station. And today, France has assisted in
organising this important conference on energy. I am therefore thankful for
these sterling efforts which have not gone unnoticed or unrecognised.
This conference occurs just a few days after our President, President Thabo
Mbeki announced in the State of the Nation Address government's intention with
regard to energy, to "expedite our work to ensure greater reliance on nuclear
power generation, natural gas and the various forms of renewable sources of
energy."
Access to electricity is key to the maintenance and improvement of the
quality of life for all South Africans, and indeed worldwide. Since the
inception of the electrification programme in South Africa, approximately 4,5
million households have been connected to the national grid. Access to
electricity has increased from approximately 30% in 1994 to 73% in 2005. This
is in reference to the life of the democratic government. It is also fair to
mention that electrification has contributed significantly to the
socio-economic status including local economic development, job creation and
poverty alleviation of the majority of historically disadvantaged communities
in SA. It was therefore recognised by the President in the State of the Nation
Address when announcing national targets to basic infrastructure that, the
country must reach universal access to electricity by 2012.
There are approximately 3.4 million households in South Africa still without
access to electricity which requires an annual connection of approximately 500
000 households. A challenge to the Department of Minerals and Energy (DME) is
the integration of alternative energy carriers into rural electrification,
where there is little or no bulk infrastructure. In some areas the topography
is such that it is difficult to even get the same bulk infrastructure to those
areas.
Electricity generation is important as an input into the livelihoods of many
South Africans. Currently the South African electricity generation is mainly
dependent on coal. The over-reliance on coal needs to be reduced particularly
as investment is being made into new national electricity generation capacity.
This reduction will amongst others pre-empt future constraints on the economy
and potential penalties on South African products, which could arise due to
carbon intensive electricity generation. Investment plans into new electricity
generation capacity are currently being developed by our electricity utility,
Eskom, under the leadership of the Department of Public Enterprises.
Eskom will be required to produce about 70% of the country's electricity
requirements, with the remaining 30% procured through the competitive bidding
process by private sector participation, referred to as Independent Power
Producers (IPPs), in the power generation.
In responding to the projected economic growth of 6% Gross Domestic Product
(GDP), and the capacity shortfall, the DME, which I lead, is currently
concluding the bidding process for the introduction of 1050 MW through IPPs to
be commissioned before the winter of 2009. This New Generation project involves
five international bidders who are to construct, own and operate the two Open
Cycle Gas Turbines (OCGT). These plants are to be located in the two coastal
regions (KwaZulu-Natal and Eastern Cape).
This process will see an injection of Foreign Direct Investment into the
economy of about R4 billion. We will be announcing the preferred bidder(s) for
the two OCGT plants by April 2007. The construction of the two plants will take
place in November/December 2007 in order to give time for the process to meet
the commissioning date of first quarter of 2009 in order to meet the winter
demand of 2009.
Cabinet has already decided that the next IPP base load will be commissioned
in 2010/11 in Coega. Informed by the number of studies on the network and load
demand and timing point of view, it was decided that the technology will be
Combined Cycle Gas Turbine (CCGT) Fired Plant. We will be going out to call for
bidders interests in the second quarter of the year 2007.
To give expression to the importance of the role of renewable energy, we
plan to increase this component of the energy mix to 10 000 gigawatt-hour by
the year 2013. In addition, the role of bio-fuels has been elevated in South
Africa and we have already finalised a bio-fuels industry strategy.
The DME as per the 2006/07 Departmental Strategic Plan is finalising a
Nuclear Energy and Technology Strategy which will outline a vision for nuclear
base-load (similar to Koeberg) and small to medium sized nuclear power plants
(such as Pebble Bed Modular Reactor - PBMR) in South Africa. It is expected to
pave the way for the research, development and design, construction,
commissioning, demonstration and commercial operation of innovative and
conventional nuclear power plants in South Africa based on international
bidding by nuclear vendors, including those from France. The ultimate goal of
South Africa is to realise localisation of fabrication of nuclear components
involved in all aspects of nuclear power generation and the nuclear fuel
cycle.
One of the elements of ensuring energy security is sustainable use of
primary energy sources by a country. Global climate change has resulted in many
countries to seriously consider the nuclear energy option for electricity
generation. This environmental concern, coupled with a reduction in uranium
stocks in many countries has led to an increase in the price of uranium.
Any new investment into nuclear base-load electricity generation capacity
will require nuclear fuel over a 40 to 60 year horizon. The renewed global
interest in nuclear power and the planned investments into new generation
capacity in South Africa present an opportunity for a re-assessment of the
opportunities that can accrue from beneficiation of uranium in South Africa.
One of these opportunities would be localised nuclear fuel manufacturing
thereby ensuring rand denominated fuel cost for nuclear power plants with
savings on foreign exchange and creation of a significant quantity of jobs
through beneficiation.
The South African Mining industry has already positioned itself by
increasing exploration activities and there has also been a significant
increase in the number of applications for uranium mining rights. This on its
own will create a sizeable number of new jobs.
It is evident that the realisation of these large projects depends
significantly on joint co-operation on all fronts and I emphasise the words
joint co-operation.
International joint co-operation in the technology development and
industrialisation of South Africa is an imperative of the South African
government as it particularly relates to energy security, diversification and
supply.
The South African Government considers one of the great strengths of these
projects to be its international approach, with technical relations with most
major developed countries. It is the sincere wish of the government to maintain
this broad collaborative effort in the project described as it develops. I am
particularly encouraged by the good relations that South Africa has with France
and am convinced that many opportunities shall arise which shall be fruitful to
all parties and shall facilitate that France plays a vital role in the South
African economy.
In conclusion, with respect to nuclear energy, I am convinced that the
FranceâSouth Africa co-operation will be elevated through a co-operation
agreement on the peaceful use of nuclear energy which shall be available for
signature in the very near future.
Finally, I wish you well in your deliberations. Moreover, I am eagerly
looking forward to the outcomes.
I thank you.
Issued by: Department of Minerals and Energy
20 February 2007
