David Fig • ISS Paper 210 • April 2010 Nuclear energy rethink? The rise and demise of South Africa’s Pebble Bed Modular Reactor INTRODUCTION On 18 February 2010, public enterprises minister Barbara Hogan announced that, in line with the 2010 budget, the South African government had decided to cut its inancial support to Pebble Bed Modular Reactor (Pty) Ltd (hereater the PBMR company). his has probably put paid to the company’s plans to build a demonstration model of a locally developed high temperature reactor, called the pebble bed modular reactor. Its name is such because it uses a technology involving pebble-shaped fuel elements and can be constructed in multiples called modules. As a result of the curtailing of state funding the company has had to restructure, with plans to dismiss over 75 per cent of its 800-strong workforce. 1 he PBMR company had absorbed R8,67 billion of taxpayers’ money to date. It needed at least another R23 billion to set up the demonstration reactor and the fuel plant to make the pebbles. ‘he problem wit h the project,’ said Hogan, ‘is that it has not been able to get a long-term investor and customer.’ 2 he state was refusing to carry t he bulk of the investment on behalf of taxpayers. Although the PBMR company – irst created in 1999 – is being let with a skeleton staf and a much smaller budget, it is not being closed completely. However, the retrenchments and the resignation of the company’s CEO Jaco Kriek only days ater Hogan’s announcement have let the residue of employees deeply demoralised. 3 Kriek had earlier been given prominence in the South African news media in a vain attempt to curry Treasury and government support for prolonging the life of the project. 4 Is the PBMR dead? Certainly it will not be able to rely on the level of state funding that it has received in the past. However, the company still operates and it is likely to engage in last-ditch attempts to ind investors and customers. Westinghouse, which owns a small share in the PBMR company, has said it will make an additional investment to help the company survive for another 10–15 months. 5 Westinghouse, along with General Atomics, another US-based irm, wants to use PBMR technology to help the US Department of Energy to construct its own version of the high-temperature reactor in the USA. Before leaving the PBMR company, Kriek claimed that government will make a decision about the future of the PBMR in August 2010. 6 his is likely to be part of a government pronouncement on nuclear policy in general. While the PBMR company has sufered a body blow in the removal of signiicant state inance, the spectre of its possible renaissance cannot entirely be ruled out for the moment. We therefore need to understand its history and prospects. Originally the aim of the PBMR project was to deliver energy to industry and households, both locally and for export. It was foreseen that it would export 20 reactors a year and build about ten for domestic use. However, the technology has proven diicult for the South African team to master and the prospect of building a demonstration model has repeatedly been postponed. Ater initially setting the date for completion at 2003, the company continually deferred this and in 2009 an- nounced it had rescheduled completion to ‘round about 2020’, a delay of at least 17 years (see Appendix I). he design of t he reactor itself has also been modi- ied ive times. At irst the reactor was set to deliver 110 megawatts of electricity. Later, versions of 125 and 137 megawatts were claimed. In 2005 the design was further changed to allow for an output of 165 megawatts. his change was regarded as signiicant enough to have to reinitiate the environmental impact assessment (EIA) process to take the new design into account. However during the course of this EIA, a further signiicant modiication to the design was announced. he PBMR company stated in February 2009 that the latest version would only generate 80 megawatts of electricity. It no longer claimed that the only rationale for the pebble bed reactor was the delivery of electricity. Instead, its purpose was said to have extended to the generation of heat for industry, the possible extraction of oil from tar sands, hydrogen production and the desalination of sea water.