A failed attempt to reduce load-shedding by stalling a generator replacement project at Koeberg has seen Eskom slapped with a R950m penalty over delays to the planned work at the nuclear power station in the Western Cape.
Despite the postponement, the country still experienced stage 4 load-shedding in June last year. Eskom says it is now seeking legal advice as it believes the process followed was inappropriate.
The R950m penalty was awarded to the French company Framatome, which has a contract to manufacture and replace six steam generators at South Africa’s only nuclear station.
It follows another fine following payment disputes with the French company. In May last year the Constitutional Court upheld the Supreme Court of Appeal’s R650m cost order against Eskom in relation to the Koeberg contract with Framatome.
Koeberg’s unit 1, which provides 920MW of generation capacity, will be unavailable this winter, which will add about one stage of load-shedding.
The delays leave a very tight window for completion of the steam generator replacement in the other unit before the expiry of Koeberg’s licence in mid-2024.
While Eskom was this week tight-lipped about the latest penalty, two independent sources at the power utility confirmed that an adjudication ruling delivered last week awarded Framatome R950m in damages after Eskom postponed work due to be completed during a maintenance outage which started in January last year.
Framatome spokesperson Sharon Sinclair declined to comment, referring questions to Eskom.
Eskom this week said it could not give total costs incurred through penalty damages to Framatome since the steam generator replacement project began at Koeberg as “most of the claims are not yet finalised”.
Energy activist Peter Becker said: “There are now over 100 active contractual disputes between Eskom and Framatome, with a single one of them with a value of approximately R1bn.”
Becker is a member of the Koeberg Alert Alliance and a former board member of the National Nuclear Regulator. He accused Eskom of being dishonest about the cost of the refurbishment work being done at Koeberg.
While Eskom has in the past put the refurbishment cost at about R20bn, energy analyst Clyde Mallinson wrote in Engineering News that this estimate was done in 2010 and the updated cost is likely to be between R40bn and R70bn.
The Koeberg station is currently experiencing fresh delays, which could lead to Eskom incurring further penalties.
Electricity minister Kgosientsho Ramokgopa has said that work falling behind schedule at Koeberg’s unit 1 could lead to load-shedding during the winter peak
The station’s unit 1, which is undergoing the long-awaited replacement of its three generators, has now recorded delays of 45 days.
Eskom declined to give reasons for the latest delays, their impact and when the unit is expected to be back in service.
“A project of this nature and complexity will always experience some level of unanticipated delays, due to contractual reasons. Eskom is not prepared to expand on the reasons. Once a new return to service date is confirmed, it will be communicated,” Eskom said in a statement.
The 39-year-old station was scheduled to have been overhauled by November 2018, with its six steam generators replaced. The lifespan and operating licence of Koeberg, which produces about 1,940MW of power, comes to an end in July next year.
Koeberg’s unit 2 is now expected to see its steam generator replacement project undertaken later this year, following last year’s postponement. Eskom said it did not expect the current delays to impact the start of unit 2’s next outage, expected around October.
Electricity minister Kgosientsho Ramokgopa has said that work falling behind schedule at Koeberg’s unit 1 could lead to load-shedding during the winter peak.
“The unit provides about 920MW to the grid. We were hoping that unit 1 will come back on line by July 23, however, unfortunately they can’t meet the target because of unforeseen conditions,” Ramokgopa said after his visit to Koeberg a week ago.
Unit 2 was shut down on January 18 last year for a regular refuelling and maintenance outage. It was initially planned to include the replacement of the three steam generators in the unit during this period but Eskom postponed this due to the likelihood the work would only be completed later than June.
Eskom is awaiting approval from the National Nuclear Regulator for a long-term operating licence. It said it was “confident that the regulator will issue the licence, as we have demonstrated safety through our submissions”.
Becker said that with Koeberg’s current licence expiring next year, “if approval is not given based on safety considerations, the whole refurbishment exercise will have been a colossal waste of money”.
He said the Koeberg upgrade was poorly planned.
“The output of Koeberg is needed right now, far more than it will be needed from 2025 onwards. Koeberg represents just 3.5% of national nominal capacity, and that percentage will fall steadily as new capacity comes on line.
"Most analysts agree that significant new capacity will be on line within two years, which means Koeberg will easily be replaced by then by other, cleaner sources of electricity, which do not generate the unresolved headache represented by highly radioactive waste.”
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