Energy Minister Mmamoloko Kubayi announced earlier this month that government would not appeal the April 26 ruling of the Western Cape High Court, which declared the processes hitherto used to procure new nuclear capacity to be unconstitutional and illegal, along with three nuclear-related intergovernmental agreements (IGAs).
Nevertheless, she left the door open for the issuance of a new legally compliant nuclear determination ahead of the finalisation of a new Integrated Resource Plan (IRP), which she confirmed would be updated only in the last quarter of the current fiscal year, which ends on March 31, 2018.
The current IRP was drafted in 2010 and provides the policy framework for the procurement of 9 600 MW of new nuclear capacity by 2030. The update is expected to materially scale back and defer the introduction of any additional nuclear capacity, with the Department of Energy’s (DoE’s) own 2016 IRP Base Case indicating that the first new nuclear reactor would only be required from 2037.
Speaking in Pretoria recently, Kubayi argued that nuclear would be required as part of the country’s future electricity mix and insisted that the prerogative for defining that mix rested with government and not the courts.
“I don’t think that the courts should be pronouncing on policy – it’s our space as the executive and they must allow us to do our work,” the Minister said. She also indicated that the DoE would be willing to contest any legal challenges to its policy regarding the energy mix, including one disputing the rationality of proceeding with new nuclear procurement based on the current policy as outlined in the 2010 version of the IRP.
However, the Minister said she had decided to abide by the nuclear judgment, despite not agreeing with all aspects and the DoE would be taking “proactive” steps to align its processes with those outlined in the ruling.
Instructions had been issued to the department to review the processing of all future Section 34 determinations and to review all determinations currently in place to ensure compliance. In terms of the Electricity Regulation Act, Section 34 Determinations are required before any new generation can be procured and such determinations are drafted by the Energy Minister with the “concurrence” of the National Energy Regulator of South Africa (Nersa).
The nuclear ruling declared “unlawful and unconstitutional” both the 2013 and 2016 determinations related to nuclear on the basis that they had not been subjected to Nersa-led public consultations.
However, determinations for renewable energy, coal, gas and hydro, had also not been subjected to public consultations by Nersa, which meant that remedial steps would need to be taken to ensure that these determinations were also not open to legal challenge. Kubayi said the department was still considering options in this regard, but acknowledged that all the current determinations were not compliant with the Western Cape High Court’s ruling.
She would not be drawn on whether the nuclear ruling had implications for the 37 outstanding renewable-energy projects, which had been procured by the DoE in 2015, but had been delayed, owing to Eskom’s refusal to sign power purchase agreements (PPAs) for the projects.
Prior to President Jacob Zuma’s March 31 Cabinet reshuffle, former Energy Minister Tina Joemat-Pettersson set an April 11 deadline for the signing of the PPAs. However, following her appointment to the position, Kubayi postponed the signing to allow her time to consult with Public Enterprises Minister Lynne Brown and Finance Minister Malusi Gigaba.
She confirmed that no new date had been set, arguing that the nuclear judgment also had implications for the other technologies that she wanted to “proactively” address so as to avoid a situation where she was “in court every day”.
“I would rather have a process that is clean, that is clinical, [and] that, when it is scrutinised, can stand the test of scrutiny.”
In addition, the DoE would renegotiate nuclear IGAs with the US, France, South Korea, Russia and China using a “standardised” framework and table these new IGAs in Parliament “within reasonable time”.
Negotiations with the five countries would begin in June on the basis of the standardised framework, but Kubayi stressed that they could differ in content, as they would be the outcome of separate bilateral negotiations.
The previous decision to table the Russian IGA in terms of Section 231(3) of the Constitution was held up to be unconstitutional and unlawful by the court, along with the decision to table the US and South Korea IGAs. The court was particularly critical of the Russian IGA, which the judges said could not be considered a “routine agreement”, as it had many attributes of a binding deal.
Kubayi saw no immediate risk to South Africa’s trade in nuclear products, including medical isotopes, as a result of the court ruling.
However, she said that the five countries were “agitated” by the fact that the IGAs had been declared illegal and that theDoE was, therefore, prioritising the renegotiation of the agreements in collaboration with the Department of International Relations and Cooperation.