Cape Town - Energy Minister Tina Joemat-Pettersson’s recommendation to move the nuclear programme to the office of the Independent Power Producers (IPP) was given the thumbs up by Finance Minister Pravin Gordhan on Wednesday.
“She is moving in the right direction,” Gordhan said in response to a question from Fin24. “Once she has made a decision, she will let us know.”
The renewable energy IPP procurement programme has been praised internationally for government’s successful partnership with the private sector, Joemat-Pettersson told the Portfolio Committee on Energy on Tuesday.
The IPP office is a partnership between the DoE, Treasury and the Development Bank of South Africa. Joemat-Pettersson also wants the auditor general to form part of office.
She faced stiff opposition from her African National Congress (ANC) colleagues in the committee, while the Democratic Alliance (DA) was fully supportive of her proposal.
Speaking ahead of his budget address, Gordhan said government wanted to bring energy certainty to the sector. “There was doubt on nuclear, but now there is certainty and transparency here,” he said.
The 9 600MW nuclear energy new build programme will only proceed after a “thorough and transparent tender process”, according to Treasury’s budget review, released on Wednesday.
Following on from President Jacob Zuma’ State of the Nation address this month, Gordhan’s budget review said “government will only expand such capacity at a scale and pace that is affordable”.
It added that nuclear power “involves substantial upfront costs”.
However, it said that over the longer term, “government has identified the need to expand production of nuclear power within South Africa’s overall energy mix”.
In his budget address, Gordhan said Joemat-Pettersson will oversee the preparatory work for investment in nuclear power.
“Funds were reprioritised to appoint a transactional advisor to assist the DoE with the call for proposals for the nuclear build programme,” Treasury said.
“An amount of R200m has been set aside to support preparatory work for nuclear procurement.” This amount was allocated by former Finance Minister Nhlanhla Nene in his mini budget in 2015.
The statements over nuclear come after cabinet authorised the DoE to push ahead for request for proposals in December 2015, after which a government gazette was published.