Home Business Counting cost of Koeberg’s ballooning billion-rand refurbishment bill

Counting cost of Koeberg’s ballooning billion-rand refurbishment bill

Counting cost of Koeberg’s ballooning billion-rand refurbishment bill

Eskom has cost the economy at least R33 billion after taking Unit 2 of the Koeberg nuclear power station offline for eight months instead of the estimated five months.

This is the view of the Koeberg Alert Alliance (KAA), which warned yesterday that the Koeberg steam generator replacement project could cost more if Eskom forges ahead with it as planned.

KAA held a virtual briefing with a small group of journalists yesterday where it questioned the wisdom of Eskom’s multibillion-rand project at Koeberg after this year’s failed attempt to replace three steam generators.

Earlier this year, Eskom took the 900MW Unit 2 at Koeberg offline with an estimated five-month outage but encountered delays that resulted in the unit being offline for eight months instead. Eskom also failed to install the new steam generators in that time.

The power utility now plans to try again with unit 2 in September next year, and to attempt the refurbishment of unit 1 in December this year.

To refurbish the plant, which includes replacing three steam generators in each unit, it needs to be taken offline for extended periods.

Independent energy analyst Clyde Mallinson said he had used Eskom’s hourly historical data available via their data portal to work out precisely in which hours there have been load shedding, and when Eskom has used diesel to run its open-cycle gas turbines (OCGT).

Mallinson said this enabled him to calculate what the effect of having Unit 2 of Koeberg offline for eight months this year has been. He said the extended outage has cost Eskom an additional R5bn worth of diesel.

Eskom admitted on Tuesday that the Koeberg Unit 2 outage led to an increase in load shedding and was a key component of the stage 6 load shedding because the delay in returning the unit to service coincided with peak demand during the winter season.

According to Mallinson’s calculations, 1650GWh of avoidable load shedding has occurred as a direct result of the extended outage of Unit 2.

He said there were various views about how much each kWh actually costs the economy, with figures varying from R10/kWh to R100/kWh.

Mallinson used a conservative figure of R20/kWh in estimating that the cost of the Unit 2 outage to the economy in 2022 has been R33bn.

KAA spokesperson Peter Becker said that the cost of refurbishing Africa’s only nuclear power station to extend its life by a further 20 years beyond 2024 came at a great cost to South Africa.

“Adding up these costs for the three outages and the conservative R67.9 billion in direct costs, the total cost to the Koeberg refurbishment will be R281bn,” Becker said.

“If the R67.9bn engineering costs were to inflate to R130bn, as it has for projects such as Medupi, the total will be in the region of R345bn.”

Becker said it was time for Eskom to seriously consider abandoning the refurbishment and leave the plant running until July 2024.

“That will avoid the risk of further embarrassment due to bungled attempts to manage the project, save Eskom the balance of the engineering costs, and also avoid unnecessary load shedding resulting in losses to the economy measured in hundreds of billions of rand,” he said.

“Eskom has claimed that Koeberg will produce the cheapest electricity of all its generating units, although they have not actually released an updated business plan with figures to justify that.

“However, if all the above figures are taken into account, in terms of cost to the country, if the refurbishment of Koeberg goes ahead it will produce the most expensive electricity in the history of South Africa.”

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