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Supply Chain Reaction- Localisation Issues for Nuclear New Build

South Africa has recently faced a reality of power supply struggling to meet rising demand driven by strong economic growth, a low cost of electricity, rapid industrialisation and a mass electrification programme without any significant increase in generation capacity. As a result the Integrated Resource Plan (IRP) 2010 has been designed to guide the country’s energy mix and planning for the next 20 years. The IRP 2010 has allocated 9600 MW for nuclear, to be completed by 2030, of which the first 1600 MW is due to come online in 2023. If each plant is assumed to be 1600 MW, as does the IRP 2010, it would entail a fleet of 6 reactors which will cost approximately ZAR 400 bn.

According to the US “Utility Requirement Documents (URD)” approximately half of the nuclear power plant costs are for nuclear island equipment whilst the rest of the costs are split between the conventional island (~30%) and balance of plant (~20 %).

The benefits of localisation include job creation, possible reduction in costs, scientific and industrial development, autonomy, shortening of the supply chain as well as the establishment of centres of excellence which will benefit other industries.

With the national and global economy facing numerous challenges and constraints, it is important that a localisation programme for nuclear power plants is effective both in terms of enabling the primary goal of delivering electricity on schedule but also in terms of achieving secondary objectives such as job creation and a sustainable supply chain.

 

Key Questions.

Some of the issues which need to be addressed are the following

 What is the optimum degree of localisation for South Africa?

 How should the localisation strategy be rolled out?

 What are some of the risks/ considerations for nuclear build?

 

Download the full article here for more on Localisation Requirements, Localisation Options, Current Capacity, Key Challenges and the way forward

For more information, please contact Shamal Sivasanker, Director: Power Solutions, at ssivasanker@deloitte.co.za

We welcome any feedback and comments! Please share with your network!

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Category: Africa, Executive Leadership, Government & Public Sector, Power & Utilities

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