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The November 2013 edition of the Integrated Resource Plan for Electricity, which has not been<br />

updated since, concludes:<br />

The nuclear decision can possibly be delayed. The revised demand projections suggest that no new<br />

nuclear base-load capacity is required until after 2025 (and for lower demand not until at earliest 2035)<br />

and that there are alternative options, such as regional hydro, that can fulfil the requirement and allow<br />

further exploration of the shale gas potential before prematurely committing to a technology that may<br />

be redundant if the electricity demand expectations do not materialise. 362<br />

However, DOE’s Strategic Plan 2015–2020, released in April 2015, maintains the 2030 objective,<br />

but states that the investment in the 9.6 GWe Nuclear New Build Program “requires an innovative<br />

financing mechanism to provide a firm basis to launch procurement”. 363 A Nuclear Cooperation<br />

Agreement (NCA) signed with Russia in September 2014 allows for the delivery of VVER reactors<br />

“with total installed capacity of up to 9.6 GW”, in other words potentially covering the entire<br />

program. This raised some concerns for the overall procurement process 364 and in October 2015,<br />

environmental organization Earthlife Africa went to court against the entire new-build decisionmaking<br />

process, arguing that “the government is not complying with the constitution because<br />

they’re doing this in a very secret, non-transparent, non-cost effective manner”. 365<br />

Whatever the political and legal disputes, the main stumbling block remains finances. State utility<br />

Eskom withdrew the 2008 call-for-tender, because credit-rating agencies had “threatened” to<br />

downgrade the company, if it went ahead. In November 2014, Moody’s downgraded Eskom<br />

nevertheless to “junk”. 366 In the latest rating action of May 2016, Moody's confirmed the Ba1-<br />

rating associated with a negative outlook. 367 Eskom remains in critical condition as generating<br />

costs are increasing, consumption is falling, investment requirements are increasing and<br />

competitors are reportedly ferocious. 368<br />

The current new-build plan would see the government launching the procurement process. This<br />

in turn could threaten the credit-rating of the country. In its rationale to the latest credit-rating<br />

action in May 2016, Moody’s confirmed South Africa Baa2 rating (outlook negative), just two<br />

notches off “junk”, and stressed:<br />

The authorities have also stated that expensive new projects such as the construction of massive<br />

nuclear power facilities and national health insurance will be developed only at the pace and scale<br />

that the budget allows. 369<br />

362 DOE, “Integrated Resource Plan for Electricity (IRP) 2010-2030”, Update Report 2013,<br />

21 November 2013.<br />

363 DOE, “Strategic Plan 2015–2020”, April 2015, see http://www.energy.gov.za/files/aboutus/DoE-Strategic-<br />

Plan-2015-2020.pdf, accessed 15 May 2015.<br />

364 NIW, “Russia Deal Unleashes Fury Over Procurement Process”, 26 September 2014.<br />

365 NIW, “South Africa – Battles Behind the 9.6 GW Newbuild”, 19 February 2016.<br />

366 Moody's, “Moody's downgrades Eskom to Ba1; outlook stable”, 7 November 2014.<br />

367 Moody's, “Moody's confirms Eskom's Ba1 ratings; negative outlook”, 9 May 2016.<br />

368 EE Publishers, “Eskom: from a crisis of capacity, to a crisis of rising prices, declining demand and<br />

funding”, 15 November 2015, see http://www.ee.co.za/article/eskom-crisis-capacity-crisis-rising-pricesdeclining-demand-funding.html,<br />

accessed 4 June 2016.<br />

369 Moody's, “Rating Action: Moody's confirms South Africa's sovereign rating at Baa2 and assigns a<br />

negative outlook”, 6 May 2016, see https://www.moodys.com/research/Moodys-confirms-South-Africassovereign-rating-at-Baa2-and-assigns--PR_348291,<br />

accessed 16 June 2016.<br />

Mycle Schneider, Antony Froggatt et al. 118 World Nuclear Industry Status Report 2016

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