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South African nuclear industry overview Van Zyl de Villiers R&D Division Necsa ASME Nuclear Codes and Standards Workshop 7 October 2008

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Page 1: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

South African nuclear industry overview

Van Zyl de VilliersR&D Division

Necsa

ASME Nuclear Codes and Standards Workshop7 October 2008

Page 2: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Contents

South African energy challengesSouth African Nuclear Energy Policy and Strategy

Eskom’s plansExisting nuclear infrastructure

Creation of a nuclear power industrial clusterConclusions

Page 3: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

South African Energy Challenges

Page 4: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Key challenges in SA energy sector

Changing the energy mix and ensuring continuity of supply.

Successful execution of capacity expansion programmes.

Maintaining financial sustainability of energy supply.

Extending the grid to disadvantaged communities.Responding to climate change.

Page 5: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

CO2 emissions (million tpa) - 2004

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Source: IEA Key Statistics 2006 report

Page 6: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Drivers for investment in nuclear infrastructure in SA

• Power station full life cycle costing over 60 year lifetime introduces large cost uncertainties into fossil fuel generation.

• Long term price trajectories shows attractiveness of nuclear energy and fuel cycle investment; may also be needed to underpin security of supply.

• Geographic factors in Western Cape & Eastern Cape rule out other base load generation sources.

• Intended diversification to far lower reliance on coal leads to decision to set nuclear contribution to new build at 50%.

• Comprehensive nuclear energy policy adopted by South African government in June 2008.

Page 7: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

R&D in SA in 2006

• Steady increase in gross expenditure on R&D as a percentage of GDP from 0.60% in 1997 to 0.95% in 2006. Latter figure represents spending of R16.5 billion.

• The business sector was the largest performer of R&D (55.9% of total), then government (22.8%) and higher education sector (20.0%).

• The bulk of total R&D expenditure is funded from business sector sources (51.3%), followed by government (including science councils) (33.9%) and foreign sources (10.6%).

Page 8: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Eskom’s Plans

Page 9: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Historical demand overview

Reserve margin aspiration = 15%

2 0 0 0 0

2 2 0 0 0

2 4 0 0 0

2 6 0 0 0

2 8 0 0 0

3 0 0 0 0

3 2 0 0 0

3 4 0 0 0

3 6 0 0 0

3 8 0 0 0

4 0 0 0 0

4 2 0 0 0

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Y e a r

Peak

Dem

and

and

Cap

acity

(MW

)

P e a k D e m a n d E xp e c te d P e a k D e m a n dIn s ta lle d C a p a c i ty (M W S e n t-o u t) O p e ra ti o n a l C a p a c i ty (M W S e n t-o u t)

Reserve margin = 25%

Reserve margin = 20%

Reserve margin = 16%

Reserve margin

= 8-10%

Page 10: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Long term forecasts - national + foreign

30000

40000

50000

60000

70000

80000

90000

2005 2010 2015 2020 2025

MW

PositionModerate 77960 MW

56710 MW

Additional 40 000 MW to be added to current capacity

Long term demand forecast

Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Eskom moderate position 2.3% electricity growth based GDP growth of 4%

56 710 MW

77 960 MW

Page 11: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Eskom’s expansion plans

By 2030 Eskom aspires to the following portfolio of generation assets with capacity > 80 000 MW:

• Additional nuclear capacity of up to 20 000 MW • Additional renewable energy capacity of at least 1 600 MW• Additional pumped storage as required• Additional 4000 MW of OCGT • Additional imports to a maximum of the prevailing reserve

margin (15%)• Additional cleaner coal capacity (providing for carbon

capture and storage)

Page 12: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Diversification of the primary energy mix

Coal OCGTNuclear Renewable EnergyImports Pumped Storage

Existing

Mix by 2025

Page 13: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

SA Nuclear Energy Policy and Strategy

Page 14: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Nuclear Energy Policy and Strategy for South Africa

Vision:Industrial and technological leadership to secure

alternative energy resources for the future through the development of a globally

competitive infrastructure and skills for the peaceful utilisation of nuclear energy and

technology.

Page 15: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Nuclear energy policy objectives

Promotion of NE as important electricity supply option.Promoting energy security.

Contribution to South Africa’s social and economic growth. Attainment of global leadership and self-sufficiency in the

long term.Building the uranium value chain.

Creation of framework for safe utilisation of NE.Reduction of greenhouse gas emissions.

…….

Page 16: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Nuclear energy policy principles

NE part of diversification and security of energy supplyEconomic growth and technol devel through investment

Use of uranium resources in sustainable mannerDevelopment of industrial support base

Support for research, development and innovationDevelopment of human resources

&Regulatory framework, safety, mitigate climate change,

low environmental impact, intellectual property, international obligations

Page 17: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Institutional arrangements

Necsa as the anchor for nuclear energy research, development and innovation

Eskom the main operator of nuclear power plants The National Nuclear Regulator

A National Radioactive Waste Management AgencyA national nuclear architectural capability for design,

manufacture and construction of nuclear energy systems

Page 18: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Existing SA Nuclear Infrastructure

Page 19: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

UniversitiesUranium

iThembaMedicalcentres

Vaalputs

Uranium

Necsa PBMR

NNR

Uranium

Koeberg

Industry

Page 20: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

SA has the 4th largest uranium reserves in the world

Page 21: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Two PWRs at Koeberg (1800 MW)

Page 22: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Pebble Bed Modular Reactor

Pebble Bed Modular Reactor

Page 23: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

SAFARI-1 Research Reactor

Page 24: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Uranium Enrichment

Fuelfabrication

Weaponsprogramme

Historic strategic programmes

Page 25: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

LLW and ILW disposal activities at Vaalputs

Page 26: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Sales to 55 countries…

Radioisotope Transport

Containers

Radioisotopes .... 3rd in the world!

Page 27: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Fabrication and machining at Necsa

Pressure vessels, heat exchangers, tanks, containers, valves, etc.

Page 28: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Manufacturing and Quality Control at the National Nuclear Manufacturing Centre, Necsa

Establishment of a national centre of competence in nuclear manufacturing codes and standards.

Current status:• ASME VIII accreditation with ASME U-Stamp certification and ISO

9001 certification for manufacturing and QC.• NQA-1(1994) Quality Management System.• Design and draughting ISO 9001 certification. • NDE level I and II (level III external) in ultrasonic, radiography,

magnetic particle and liquid penetrant testing. • Audit for ASME III accreditation and the ASME nuclear NPT-Stamp

certification in Nov. 2008.• ISO 17025 dimensional calibration accreditation assessment by mid

2009.

Page 29: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Accelerator-based sciences

iThemba LABS 200 MeV cyclotron:• Nuclear physics research• Proton and neutron therapy• Isotope production

Page 30: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Development of a nuclear cluster in SA

Page 31: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

A technology strategyA skills strategy

A funding strategyAn industrial strategy

Coordination

Pre-requisites for the nuclear cluster

Page 32: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

• Government adoption of National Nuclear Energy Policy and Strategy.

• Necsa will drive nuclear energy research, development and innovation, as well as the conversion, enrichment and fuel manufacturing programmes that will ideally be linked to Eskom’s reactor suppliers.

• The key principle driving the technology strategy will be progressive localization of the value chain.

A technology strategy

Page 33: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

4000 technical university graduates and 5000 – 8000 new qualified artisans will be required per annum.

• Marketing the cluster vision, particularly to young South Africans.

• The leveraging of supplier relationships.• Bilateral relationships with supplier host countries (e.g.

France, USA, Japan) as well as key ‘South’ countries, such as Brazil.

• Identification and proper funding of training and educational institutions, directly linked to the nuclear build and operating programme.

• Aggressive recruitment of engineers and scientists from abroad.

A skills strategy

Page 34: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

• Of the approx. R40 billion state funding required for localization over duration of new build period, 60 % would be invested in advanced manufacturing industries, 20% in technology development and 20% in skills development.

• Private sector would lead from beginning in shallow localization areas; state funding deployed to develop capacity in advanced (deep localization) areas.

• Coordinated approach required, using the expertise in organizations such as the IDC.

• Note: cost estimate to stimulate localization is only about 2.5% of the cost of the new build.

A funding strategy

Page 35: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

• Competitive Supplier Development Programme (CSDP) -a programme to direct major procurement by State Owned Enterprises towards local investment.

• CSDP requires a local subcontractor component to be present in any large tender involving a South African SOE.

• Already exemplified in coal part of new build, where local supply of priority components will rise from 69% to 91% by 2013, and have a R16 billion positive impact on South Africa’s balance of payments.

• CSDP will also be applied to the nuclear new build.

An industrial strategy

Page 36: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

• The allocation of responsibilities within core institutions involved in nuclear programme (Necsa, Eskom, NNR, Waste Agency, etc) defined in NEPS.

• Coordination of industrial effort will be ‘reality tested’ by industry itself.

• Several government departments are key role-players: Minerals and Energy (regulation); Public Enterprises (governance of SOEs); Trade and Industry (industrial strategy) and Science and Technology (research and innovation).

Coordination

Page 37: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Areas of localisation

Shallow:• Earthworks, foundations, concrete, roads,

auxiliary buildings, intake and outfall infrastructure, etc.

Medium:• Pumps, pipes, valves, filters, motors, vessels,

transformers, switchgear, etc.

Page 38: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Areas of localisation (cont.)

Deep:• Steel works, forges, manufacture reactor

pressure vessels, steam generator and turbines, etc.

• Uranium conversion, U enrichment, fuel fabrication, spent fuel reprocessing, high level waste storage

Page 39: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Conclusions

Page 40: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Nuclear power, as an important component of global baseload capacity, enjoys growing support in both developed countries and developing economies for reasons of security of supply, climate change, etc.

This will have a considerable effect on uranium mining, fuel cycle activities and nuclear manufacturing

globally.

South Africa will significantly increase its nuclear power capacity over the next 20 years.

The local mining, manufacturing and electricity industries are ready to partner with local and foreign

players to create a local nuclear industry.

Page 41: South African nuclear industry overviewfiles.asme.org/Divisions/NED/16789.pdf · Long term demand forecast Eskom position based on 4% growth electricity growth supporting 6% GDP growth

Thank You!