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necsa 1 - Power to the people

Power to the people

Boardroom battles at nuclear SOE Necsa underline the need for residential estates to take the power back.

By Mark van Dijk

, |

Power to the people

Boardroom battles at nuclear SOE Necsa underline the need for residential estates to take the power back.

By Mark van Dijk

, |

Boardroom battles at South Africa’s Nuclear Energy Corporation (Necsa) highlight the urgent need for residential estates to create their own power plans.

State-owned enterprises are strange things. South Africa has about 700 of them, and you probably haven’t ever heard about the vast majority (Nasa? Naci? Nacsa?). In fairness to the government, most SOEs operate relatively smoothly … but when things go wrong, things go spectacularly – and loudly – wrong. Think Eskom, SAA, SABC, Transnet. And now, think Necsa.

In January 2020, reports surfaced that the board of the South African Nuclear Energy Corporation had resigned en masse, blaming Energy and Mineral Resources Minister Gwede Mantashe for a ‘dysfunctional’ relationship, ‘due to his apparent unwillingness to address the deep financial problems facing Necsa’.

The Necsa board demanded a government bailout to pay salaries and operational expenses; Mantashe demanded a solid, sustainable long-term plan for Necsa’s future. It all blew up quite spectacularly.

But between the finger-pointing and name-calling, broader questions emerged around South Africa’s nuclear future. The country’s long-term energy plans are outlined in the Integrated Resource Plan (IRP), which first came into effect in 2011.

The 2011 plan (a ‘living plan’, which would be revised as needed) called for construction of 9,600 MWe (megawatt electrical) of new nuclear capacity leading up to 2030. Then, in 2018, a draft update proposed nuclear capacity remaining at 1,860 MWe, which happens to be the capacity of the Koeberg Nuclear Power Station … and Koeberg happens to be (still) the only nuclear power station operating in Africa.

The 2019 IRP then called for operations at Koeberg to be extended by 20 years to 2044, ‘subject to the necessary regulatory approvals’, while stating that the government would immediately start a nuclear new build programme to add 2,500 MW of generating capacity. As the plan stated: ‘This IRP proposes that the nuclear power programme must be implemented at an affordable pace, and modular scale (as opposed to a fleet approach), taking into account technological developments in the nuclear space.’

One thing it didn’t take into account was the financial implosion at Necsa.

So where are we now? What does all of this mean for South Africa’s nuclear power plans, and for the future of the country’s energy supply? Who knows? But the message for estate developers and HOAs should be clear. At a macro level, South Africa’s energy mix is – and will be, for some time – a mess of under-developed renewables, under-funded nuclear, and increasingly obsolete coal. At a micro level, that puts the responsibility on residential estates to take care of their own energy solutions.

It may not yet be viable to take your estate completely off the grid, but back-up or ancillary options are certainly available, and have become increasingly affordable.

There’s a growing sense that, if estates aren’t installing solar panels on their roof spaces, they’re missing – and wasting – an opportunity. In South Africa, solar companies now offer private power purchase agreements (PPAs) for bodies corporate, under which solar panel systems are installed for free, subject to long-term lease and solar tariff agreements. Residents then pay for the power they use.

A solar solution like that could provide cost savings of 5% to 25%. Crucially, though, it reduces the estate’s reliance on troubled energy SOEs like Eskom and Necsa – and it means that, at least to a certain extent, the problems that exist at South Africa’s power parastatals are not yours.

While solar is – in most cases – the most practical, some estates could, depending on the resources available to them, also consider solar thermal, wind and/or small-scale hydro.

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