Tim Yeo Speech at Nuclear Africa 2017
This speech was delivered by Tim Yeo, Chairman of New Nuclear Watch Europe (NNWE), at Nuclear Africa 2017 on Thursday 20th March.
Thank you for the introduction.
I am delighted to be back here at the Nuclear Africa conference . Congratulations to all of you for making it to almost the end of the 2nd day.
A lot has changed in the world since we were here a year ago. Not all of it good – particularly the growing threat of protectionism.
But one thing which has not changed is the urgent need for low carbon energy. For the world to have any chance at all of averting dangerous climate change, and keeping the rise in average temperature below 2C, the electricity generation industry has to eliminate carbon emissions almost completely by 2040.
One more thing that hasn’t changed is that the only reliable source of low carbon base load electricity is still nuclear power.
Let’s be clear. Renewables make a very important contribution.
Nobody welcomes the fall in the cost of solar, wind and other renewable energy more than me and my organisation NNWE. Renewable energy complements nuclear, but it cannot replace nuclear as a supplier of baseload electricity.
One day, perhaps a form of flexible long term low cost electricity storage may become available. But there’s no sign of it yet. And it would be recklessly irresponsible for any country to make energy policy on the basis that it will happen soon.
So we come back to nuclear as an essential part of the energy mix.
That applies just as much here in South Africa, as it does in UK, EU, US, China, Korea, Russia, and dozens of other countries round the world which plan to keep nuclear in that mix.
My support for nuclear energy in the last 25 years has been closely linked to my firm conviction about the need to cut carbon emissions in order to address climate change.
But in the last few years the need to phase out fossil fuels has become urgent for another reason. To address health concerns about air quality. In some places this is now the biggest and most urgent driver of energy policy.
Last week I was in China where this overriding concern about air pollution has recently led to the closure of every single coal fired power station in and around Beijing.
Here in South Africa, air pollution doesn’t pose quite such a desperately urgent threat to human health, but even here thousands of avoidable premature deaths are caused by poor air quality.
So until we have an economically viable form of carbon capture and storage, there cannot be any long term role for coal. As many investors around the world have already concluded.
China is switching away from coal as fast as it can, and it can only do so because alongside the world’s largest renewable energy investment programme. It also has the world’s largest domestic nuclear programme.
But coal consumption isn’t the only source of air pollution. Vehicle emissions from cars and trucks are a substantial additional cause.
In every country, and particularly in every city, in the world. Many people have recently been taken by surprise by the speed of the fall in the cost of solar power.
I urge South Africa not to be caught by surprise by the speed of the switch away from petrol or diesel powered vehicles to electric ones. A switch which the residents of every major city will soon be clamouring for for the sake of the children and grandchildren.
Of the millions of prosperous and influential middle class citizens who see the life expectancy of the next generation threatened by a reduction if immediate action isn’t taken.
To clean up the air they breathe, this new trend will be led by the great cities in Asia. But I am certain that just up the road from here, the citizens of Johannesburg will be hot on their heels. This new trend, currently still in an embryonic state is directly relevant to another part of the debate.
Here in South Africa. Much interest has been sparked by the recent downward revision in the predicted demand for electricity.
But I seriously doubt that the forecasts of slower growth in electricity consumption in 2030 takes sufficient, or even any, account of the possibility of a big extra demand for power as vehicles switch away from petrol/diesel to electricity.
Last year I identified “cost” as the only significant barrier to the rapid expansion of nuclear power. Because nuclear is already proven to be a reliable clean and secure energy source. With a safety record that is among the best in the whole energy sector.
But while fossil fuel prices remain low, and the cost of renewables is still falling. The need for nuclear to demonstrate that it is cost competitive is as strong as ever.
The good news is that cheaper nuclear energy is quickly becoming available within the next 12 months.
The first of 4 new Korean nuclear reactors will start producing electricity in the UAE, at a price which will be cost competitive with other forms of electricity generation.
Or consider the case of Rosatom, which is building more latest generation reactors globally than any other vendor. Rosatom appears to have managed to make it to the stage where the learning curve and the economies of scale enable it to enjoy falling costs too.
As for China’s Hualong One reactor – which in the UK has just started to go through the rigorous GDA process required by the UK ONR in preparation for being built at Bradwell in UK – Given the size of China’s domestic market, I wouldn’t bet against that design also generating cost competitive electricity before the end of the 2020’s.
I’m aware that some of the strongest opponents of nuclear argue that South Africa can’t afford the big upfront costs. But I don’t believe that they have recognised the extent of the fall in the price of nuclear. Which the offerings from each of these vendors may well provide for the benefit of SA consumers.
What’s more, these offerings aren’t necessarily limited to the technologies available. The accompanying financial packages are also important.
The terms of any loan for nuclear new build projects have a big impact on the eventual cost of the electricity generated.
So the question isn’t: “Can South Africa afford to invest in nuclear?”
It’s: “Can South Africa afford not to invest in nuclear?
This imminent prospect of affordable new nuclear power means that the time for decisions about South Africa’s energy infrastructure is now.
This economy, blessed with great natural resources and a talented workforce has not fulfilled the high hopes which accompanied the arrival of democracy in the last few years of the last century.
Capital investment has recently lagged behind all the countries in the region, apart from Zimbabwe.
And not surprisingly in the last 5 years, South Africa’s GDP growth has been around half of its neighbours.
The Government’s National Development Plan has rightly recognised that investment in infrastructure is necessary to support development, and that it should be prioritised.
Investment in nuclear will therefore not only guarantee a supply of secure reliable low carbon electricity. It will also give the economy a much needed shot in the arm.
But to capture these benefits, this decision must be taken very soon. South Africa can’t afford to wait until 2037 for its first new nuclear units come on line.
Since I spoke at Nuclear Africa last year, the future of nuclear here seems to have taken two steps forward and one back.
At a difficult economic time The Integrated Resource Plan for Electricity published last November, effectively set back the wider adoption of new nuclear.
So I hope the Government will now consider the representations from across the energy sector urging revision of the Plan. To prioritise development of new nuclear.
The deadline for submission of the new nuclear build programme means certainty is needed to facilitate investment and progress. According to the conclusions of the report, which NNWE commissioned from Trusted Sources, The multiplier effect of investment in nuclear would be x3.4.
The monetary value added would amount to US $77bn. That’s close to a quarter of SA’s current GDP.
By contrast much of the economic benefit of additional investment in renewable energy goes to other countries, mostly in Asia, from where the bulk of the components have to be imported.
The consequence of delaying new nuclear build until the late 2030s means slower economic growth, fewer high quality jobs, and a less reliable power supply.
Furthermore, investment in new nuclear offers South Africa the chance to develop a local supply chain network which in due course will have potential export markets across Africa and further afield.
Skills development in the STEM subjects will grow to meet the demand triggered by the investment in energy infrastructure.
The opportunity which this creates for a new generation of black industrialists who can participate in and lead the building of the power plants, and the supply of goods and services to the nuclear industry is substantial and attractive.
There are potential supply chain participants attending this event. I urge them to join me in proclaiming to the business world, to the trade unions, to the politicians, the public value of nuclear to South Africa.
This isn’t just about the profits of a few companies. It’s about jobs, about growth, about health.
These voices need to be heard, and heard now.
Energy investment decisions cannot be short term. The impact of how South Africa decides in 2017 to meet its future energy needs will be felt right through to the second half of this century.
The energy problems which Germany now faces after its mistaken decision to shut down its nuclear fleet in the wake of Fukushima, are a testament to the dangers of becoming too reliant on energy sources which are beyond a country’s control.
The key to making the right choices for South Africa are to recognise that thinking of South Africa’s energy needs only in terms of today’s demand, or even the next five years demand, would be to rob the country of the future it deserves.
Nuclear energy will provide South Africa with a low carbon baseload power source, at a predetermined cost that will help transform the entire country.
With countries like Nigeria, Kenya and Ghana moving ahead with nuclear ambitions. And leading nations like UK, the US, France,China and Canada continuing with their nuclear energy programmes.
It’s time for South Africa to follow suit, or risk being left in the dark.
Tim Yeo, Chairman, NNWE