Nene, nukes and Zuma's timing

By Alex Lenferna

Many have been confounded by the recent actions of our president: sacking Nhlanhla Nene from the post of finance minister, giving a weekend-long appointment to the relatively unknown David van Rooyen, and then kicking out Van Rooyen and finally rehiring Pravin Gordhan as finance minister. While much ink has been spilled trying to understand why Zuma made the decision, less has been spent thinking about why he did it when he did. Indeed, the timing with which Zuma chose to unveil this scandal is brilliant, while we were all focused on Nene’s dismissal, other big news is that Zuma’s Cabinet was fast-tracking a nuclear deal that might make the arms deal look like child’s play.

Zuma’s Cabinet wants to build several nuclear power plants in the country to provide 9 600MW of energy. Compared to the arms deal which amounted to R30 billion, conservative estimates of the nuclear deal say such a project would cost R500 billion, although given the likelihood of overruns experts say it is more likely to cost about R1 trillion. With a project of this size you’d think the government would want to engage in a cost-benefit analysis to ensure this really is in South Africa’s best interests. Instead, Cabinet’s decision has cleared the way for the department of energy to call for proposals without doing a cost-benefit analysis.

While we do not have a government cost-benefit analysis and it’s not clear if we will ever get one, growing evidence shows that if we allow the nuclear deal to be fast-tracked, it is set to put South Africa onto a centralised, expensive energy model, which compared to alternative is likely to overlook the poor and marginalised, run into costly delays, and drain the budget further, potentially hurting the economy and taking desperately needed government funds/taxpayer money away from other social priorities.* Indeed, Nene himself is reported to have stalled the nuclear build programme, saying it was too expensive in the current economic climate, perhaps another reason for his sacking.

The department of energy has commissioned three classified studies on the nuclear issue, which it won’t release, but which it assures us illustrates that “nuclear energy is affordable”. However Business Day’s Carol Paton reports that two of the studies found to the contrary: “That substantial amounts in debt and equity from the state will be required … [Furthermore] three independent studies — one by researchers at the Energy Research Centre at the University of Cape Town; one by the Centre for Scientific and Industrial Research; and one by an engineer at the University of Stellenbosch — all published in September, found nuclear energy to be more expensive than other base-load options.”

Instead of running head first into an expensive nuclear deal without adequate oversight when our economic chips are down, we could prioritise clean energy development. This would create many more jobs, a decentralised energy model that can provide much broader clean energy access particularly to the poor and marginalised, and save the South African economy much money, thus allowing us to address many of our other social priorities. As the Centre for Scientific and Industrial Research (CSIR) has shown, wind is already providing energy to South Africa 40% cheaper than coal, such that wind energy had produced a net saving for the country of R1.8 billion in the first half of 2015. Collectively the CSIR study showed that wind and solar had saved R4 billion from January to June in 2015. Thus, unlike the secrecy shrouded nuclear deal, clean energy has a proven track record of providing affordable energy.

Imagine a home-grown South African clean energy revolution that harnessed wind, solar, energy efficiency and the country’s own resources and skills to grow jobs in the country and keep investments here too. This is a real possibility if our government was acting in our interests. Instead, the ANC, under the leadership of Zuma, is on track to push through the largest government contract in history and hand over up to if not more than R1 trillion to foreign interests — likely Russia despite its lack of credentialed track record on this issue. Thus instead of a Proudly South African clean energy renaissance that can be brought online within much shorter time periods and thus plug the holes in Eskom’s energy supply, our taxpayer money bleeds out of the country for projects that will likely take decades many, many years to come to fruition.

Whether the Nene scandal really was a large smoke and mirrors attempt to cover up the nuclear deal is likely just speculation on my part, but what is clear is that Cabinet took a major step towards locking us into one of the greatest potential corruption scandals in South African history. Perhaps then instead of just calling for #ZumaMustFall we are going to need to call for broader and deeper ANC accountability, possibly an end to the nuclear deal madness, or at the bare minimum more transparency in the process of procurement including a cost-benefit analysis, Parliamentary oversight, and credible proof that this is truly the best path forward for South Africa.

*New wind power, for instance, the Sere Wind Power farm, costs R27 million per MW. Solar is just a few million per MW more expensive but still cheaper than new coal. Looking forward, wind and solar power costs have been dropping at an incredibly rapid rate and will likely continue to do so. On the other hand because conservative estimates of the nuclear programme put it at R500 billion for 9 200MW, then back of the envelope calculations put the costs of nuclear at R52 million per MW, and if instead the nuclear deal ends up costing us R1 trillion as many experts fear, then the costs would be just over R100 million per MW. Therefore new nuclear could be two-three times more expensive than renewable energy.

Alex Lenferna is a South African Fulbright and Mandela Rhodes Scholar currently pursuing a PhD in the ethics of climate change at the University of Washington, Seattle.