"It's too big. We can't do it," says the utility
Another casualty of the world wide credit crunch in the nuclear industry was recorded Friday Dec 5. Eskom, the troubled South African electric utility, canceled its plans to build two nuclear power plants worth $12 billion.
Bloomberg wire service reports that despite the severe shortage of electricity which has hampered major industries and notched the nation's GDP downward, Eskom gave up trying to raise the money for the project after Moody's cut its credit rating and after South African regulators refused to allow sufficient rate increases to pay for ongoing expenses and expansion of power generation capacity.
In a prepared statement Eskom said . . .
The Board announced its decision not to proceed with the proposed investment in Nuclear-1 project due to the magnitude of the investment. The proposed Nuclear 1 project would have resulted in the construction of the country’s second pressurized water reactor nuclear power plant.
“It’s too big, we can’t do it,” Johannesburg-based Eskom spokesman Fani Zulu said. “The bidders were informed after we took the decision at a board meeting yesterday.”
Westinghouse and Areva were to the two bidders who had been competing fiercely for the project. Areva proposed two 1,650 MW EPR reactors, while Westinghouse offered to build three 1,140 MW AP1000.
Areva told the Bloomberg wire servicve the reasons for the “pause” are specific to South Africa, and don’t reflect the general state in the nuclear industry, as shown by efforts by utilities in the U.K. and the U.S. to build nuclear power plants,
Bloomberg reports that South Africa had planned to generate 20,000 MW from nuclear reactors by 2025, more than 10 times the current output. Power demand has risen by 50 percent since apartheid ended in 1994, while government indecision postponed Eskom’s expansion.
For its part Eskom said it remained committed to nuclear energy, but simply could not proceed with it at this time.
Prior coverage on this blog
- South Africa struggles with nuclear bid
- Eskom cash woes may slow nuclear bid process
- Eskom puts pedal to the metal for nuclear bids
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