S.Africa to build new nuclear plants

South African energy minister Dipuo Peters said on Thursday she had signed off on a proposal for new nuclear power plants, likely worth tens of billions of dollars, and said it would be presented to cabinet soon.

Over 90 percent of South Africa's power is produced by coal-fired power plants and supplies are tight as state-run utility Eskom battles to meet fast-rising demand in the world's top producer of platinum and a major gold miner.

Africa's biggest economy has said it would invest in nuclear power to boost supplies and reduce its heavy carbon footprint.

Peters said she expects the cabinet to decide on the plan by the end of this year and the bid process to start early in 2012.

Once the cabinet has put this on its agenda, it will take two to three weeks, she told reporters on the sidelines of an African energy ministers' conference. We believe that by early next year we will put out the bid.

South Africa currently operates the continent's sole nuclear power plant on the west coast near Cape Town.

The minister said she expected first power from those plants, which are slated to provide a total of 9,600 megawatts of power (MW) or about a quarter of the current supply, to start flowing through the national grid in 2024 or 2025.

Previous plans had called for additional nuclear generation by 2023 but Peters said that had been delayed due to revisions after Japan's power plant disaster earlier this year.

A power supply crisis in 2008 shut mines for days and cost South Africa billions of dollars in lost output. New coal-fired plants are also being built and power tariffs are rising steeply to fund such projects, hurting consumers and squeezing the profits of power-intensive mines and other industries.

South Africa has said it would like to build a fleet of six nuclear plants to keep costs lower due to economies of scale.

Peters said there was no risk of blackouts despite the anticipated delays because of an accelerated renewable energy programme. The ministry in August launched a bid process for the supply of 3,725 MW of renewable energy by 2016.

The last attempt to build a nuclear plant, led by state-owned power utility Eskom, was scratched on funding woes.

Bidders then included Areva and U.S. company Westinghouse, majority owned by Japan's Toshiba Corp..

Peters said the nuclear process would be run and managed by Eskom, but the private sector would construct the plants.

Companies from the United States, France, Japan and South Korea have long been wooing South Africa to win the bid.