sustainability development
PBMR is committed to sustainable development and seeks to support all facets
of the World Summit on Sustainable Development (WSSD), which was held in Johannesburg, South Africa from 26 August to 4 September 2002. In so doing,
PBMR is ensuring it operates in tandem with environmental integrity and corporate social responsibility.
 |
The South African government regards the PBMR Project a National Strategic Project, demonstrating the importance of the PBMR development to South Africa’s future. This also provides for opportunities in high technology growth in South Africa and for job creation from both domestic and international sales. |
We strive to set the precedent for the nuclear sector in supporting, refining and enhancing all measures designed to grow our economy, invest in social development and protect the environment of South Africa, the third most biodiverse country on the planet, and its people.
The White Paper on Energy Policy contains a broad set of policy objectives organised under three main themes. PBMR contributes directly to achieving the following objectives:
- Stimulation of economic development
PBMR contributes to this through the range of new activities that has to be developed and undertaken to support the further development, construction and commercialisation of the technology.
- Management of energy-related environmental and health impacts
The impact of nuclear power on the environment is significantly lower than coal. In addition, the design of PBMR technology makes it inherently safe and the nuclear power industry places a materially higher value on safety than other industries.
- Securing of energy supply through diversity
PBMR provides a ‘home-grown’, emission-free alternative to coal for South Africa.
“ Sustainable development is based on economic development, respect for the environment and meeting social expectations for stakeholders.”
SOCIAL EXPECTATIONS
PBMR actively engage with stakeholders to ensure its development initiatives are aligned with national and strategic priorities.
STAKEHOLDERS
Governmental stakeholders
The PBMR company has been identified as a strategic national project. To this end the company enjoys the full support of national government in making the project a reality, not just for the South African consumer, but also for international markets.
Department of Public Enterprises (DPE)
The DPE is the line department of PBMR. In this regard it is currently the main funder of PBMR. The DPE provides a supportive strategic framework for manufacturing and energy sector development, highly relevant to PBMR objectives, which developed in consultation with DPE and incorporated in the annual submission of a corporate three-year plan.
The new structure of the DPE clearly outlines its priorities. The business units of particular interest to PBMR are:
- corporate strategy and structure unit, which oversees the contribution of state-owned enterprises to government’s strategic and economic interests; PBMR’s localisation effort will assist in meeting government’s objective of economic growth and employment; and
- joint project facility, which may assist PBMR with identifying and defining areas of co-operation in skills development for PBMR and the wider economy.
“ DME is the key government custodian of South Africa’s Generation IV ambitions.”
Department of Minerals and Energy (DME)
The DME is another government stakeholder of PBMR. The Chief Directorate: Nuclear in the DME’s purpose is to administer all matters related to nuclear energy as required by legislation and international agreements. Nuclear energy, technology and safety policies facilitate the integration of the nuclear sector in various facets of South African society. These policies position the South African industry to be world-class leaders in various fields of nuclear expertise. The nuclear sector in South Africa is mainly governed by the Nuclear Energy Act 1999, Act 46 of 1999, and the National Nuclear Regulator (NNR) Act 1999, Act 47 of 1999. These acts are administered by the Department of Minerals and Energy.
The Nuclear Energy Act of 1999, Act 46 of 1999, gives responsibility to the Minister of Minerals and Energy for nuclear power generation, management of radioactive wastes and the country's international commitments.
Department of Science and Technology (DST)
The DST funds specific programmes in human capital administration in the nuclear industry, nuclear manufacturing and the hydrogen economy.
The science, technology and innovation (STI) policy in South Africa is the responsibility of a number of government departments. The majority of policy instruments currently available, are linked to human capital and human resource development. The development of human resources relevant to nuclear in general and PBMR in particular, is essential. Substantial efforts are being undertaken to meet these needs in a realistic time frame.
PBMR positively impacts a number of STI policies:
- PBMR contributes to realising the objectives of the White Paper on Science and Technology’s national system of innovation framework.
- PBMR, through its commercialisation activities and the international recognition gained for South Africa’s nuclear expertise, contributes to the national research and development strategy objective to identify, develop and lead sectors that will expand the base for wealth creation and competition in the international economy.
- The leading position which PBMR has in the Generation IV nuclear industry, should contribute to a growing nuclear sector in South Africa.
- The commercialisation of PBMR will result in the development of new industries in South Africa. These industries will be required to support the construction, export and maintenance of pebble bed modular reactors in direct support of the national advanced manufacturing technology strategy.
Department of Trade and Industry (dti)
The following programmes of the Department of Trade and Industry (dti) are of relevance:
- Trade and Investment South Africa (TISA) focuses on export development and promotion, investment promotion and facilitation, and customised sector development. PBMR could benefit from TISA, and in particular from the customised sector programme aimed at promoting sector development, and identifying and removing blockages to sector development.
- The national industrial participation programme (NIPP) obliges foreign suppliers (of goods or services in excess of US$10 million) to reinvest a portion of their profits into sectors in the South African economy fundamental into growth of the economy and development of the country. PBMR can create substantial foreign direct investment in areas of interest and promote national interest in general.
Department of Environmental Affairs and Tourism (DEAT)
The construction phase of the PBMR project is subject to obtaining a positive Record of Decision (RoD) by the DEAT on the environmental impact assessment (EIA) study. To this end, Eskom (as the client for the demonstration reactor project at Koeberg) and Necsa (as the client for the pilot fuel plant at Pelindaba), conducted comprehensive EIA which started as far back as 1999 with the appointment of a consortium of independent consultants.
In January 2007, the Minister of Environmental Affairs and Tourism upheld the positive RoD for the pilot fuel plant EIA, subject to certain conditions. This will enable PBMR and Necsa to continue with the construction of a pilot fuel plant on receipt of a nuclear authorisation from the National Nuclear Regulator (NNR). The Minister’s decision covered the establishment of a fuel manufacturing plant at Pelindaba; the storage, handling and process facilities for the raw materials and fuels; the transport of raw material from Durban to Pelindaba and the transport of manufactured fuel from Pelindaba to Koeberg in the Western Cape.
National Treasury
South Africa's National Treasury seeks to advance economic growth and job creation through appropriate macro-economic, fiscal and financial policies. The National Treasury plays a pivotal role in the management of government expenditure, setting financial management norms and standards for state departments, monitoring their performance and reporting any deviations to the auditor-general. The Treasury also acts as a banker for national government departments; sets and maintains treasury norms and standards to ensure transparency and expenditure control in each sphere of government; and oversees logistical control of stocks and assets.
Government, through National Treasury, plays an important role in funding the first-of-a-kind components of the first reactor and fuel plant to be built. To this end, R6 billion has already been allocated through the medium term expenditure framework (MTEF).
FUNDERSContributions |
||||
of investors |
Gross |
Net |
||
up to |
amount as at |
amount as at |
||
31 March |
31 March |
VAT |
31 March |
|
2007 |
2007 |
amount |
2007 |
|
| Investor | % |
R million |
R million |
R million |
| Eskom | 20 |
818 |
– |
818 |
| IDC | 11 |
457 |
– |
457 |
| Westinghouse | 11 |
450 |
– |
450 |
| South African government | 58 |
2 384 |
219 |
2 165 |
| Exelon | – |
101 |
– |
101 |
| Total | 100 |
4 210 |
219 |
3 991 |
South African government
Since 2004, the SA government has directly contributed more than R2 billion to PBMR, firstly through the dti and lately the DPE as the oversight departments.
Eskom Holdings Limited
Eskom is core to the successful launch of our commercial reactors.
As part of its long-term nuclear plans, Eskom has issued PBMR with a letter of intent to the effect to order at least 24 commercial PBMR power units, should the DPP be successfully commissioned, prove to be commercially viable and operate within defined parameters. This equates to a PBMR generation capacity of 4 000 MWe to 5 000 MWe.
The commercialisation of the first PBMR power plants for delivery to Eskom will be the key to unlock this business opportunity. It will provide the build platform and economies of scale required for production cost streamlining and capacity building, enabling PBMR to compete in the international electricity market as well as the process heat market. In addition, a large local order will facilitate significant local industrialisation, a standalone maintenance infrastructure and the investment required for a profitable commercial fuel fabrication facility.
Industrial Development Corporation of South Africa Limited (IDC)
The IDC is a self-financing, national development finance institution, established in 1940 to promote economic growth and industrial development in Africa. It covers a broad spectrum of industries and aims to create employment, develop small and medium enterprises and accelerate black economic empowerment (BEE).
The IDC plays a significant role in the funding of local industrialists to enable them to increase capacity and upgrade to international standards. In line with the localisation strategy as a component of the national nuclear strategy, this also applies to the manufacturing of products for the nuclear industry.
Westinghouse Electric Company LLC (WEC)
Westinghouse is a US-based company that provides fuel, services, technology, plant design, and equipment for the commercial nuclear electric power industry. Westinghouse is one of the largest global suppliers of new nuclear power plants having designed and supplied more nuclear plants in the world than any other company. It is also a leader in maintenance and ancillary services and fuel cycle services, and has significant international marketing and sales networks.
Toshiba Group recently acquired a majority stake of Westinghouse from British Nuclear Fuels plc. Toshiba expects to introduce a number of minority investors, but will retain more than a 51% interest of Westinghouse and remain the majority and controlling shareholder. Westinghouse will retain its current intellectual property, equipment and employees. Necessary resources will be channelled to its operations to assure further business expansion.
NATIONAL NUCLEAR REGULATOR (NNR)
PBMR will be the applicant for the construction licence on the pilot fuel plant (PFP). The safety case needs to be developed and submitted for a ruling by the NNR to enable PBMR to commence construction of the PFP at Pelindaba by mid 2008.Core to PBMR’s licensing, is the National Nuclear Regulatory body that is an independent statutory body established under the NNR Act. Licensing of the technology is an ongoing process during the design, construction, operation, decontamination, decommissioning and closures of nuclear installations. The applicant for the construction licence of the DPP is Eskom. PBMR therefore needs to submit the Safety Analysis Report (SAR) to the Eskom Client Office for review, which will submit it to the NNR.
EMPLOYEES
PBMR values the importance of a world-class workforce and the necessity to improve its skills and knowledge base continuously. Continuous improvement
Continuous improvement is an ongoing process with regard to PBMR’s employees’ development and training initiatives. The figure below shows that through continuous assessments, communication and values, PBMR is committed to focus on reducing cost and minimising schedule.
Leadership development
In terms of sustainability, PBMR also subscribes to – and has implemented – a leadership development programme. Potential leaders are identified according to their abilities to communicate effectively, being role models, and who have both technical and leadership insight. Participants of the leadership programme develop their leadership skills consistent with the aspired culture for PBMR. Ultimately, they play an important part in the delivery of the strategic intent through operational roles.
NATIONAL CAPACITY BUILDING
PBMR is currently involved with the following national capacity building initiatives: Accelerated and Shared Growth Initiative for South Africa (Asgi-SA)
Asgi-SA is a national shared growth initiative rather than a government programme, and has the potential to facilitate PBMR’s objectives. The Asgi-SA aims to guide and improve on the country’s remarkable economic recovery, raising economic growth to 6% and halving poverty and unemployment by 2014. Through active engagement with Asgi-SA, PBMR can ensure relevant input to sector strategies, introduction of a nuclear sector, and contribution to the education and skills development objective.
Equity profile
PBMR is a proudly South African company, embracing the essence of the Constitution in its policy frameworks, and subscribing to the Broad-based Black Economic Empowerment (BBBEE) Act in its procurement policy and procedures, and to the Employment Equity Act in its human resources recruitment policy and procedures. PBMR’s total employee complement is 757, inclusive of non-permanent employees (and bursary). The company has a total of 667 permanent employees.
Joint Initiative on Priority Skills Acquisition (Jipsa)
Government started Jipsa to develop the skills that are most urgently needed. Jipsa is one of the most important parts of Asgi-SA. The honourable Deputy President of South Africa, Ms Phumzile Mlambo-Ngcuka, is leading Jipsa.
South African Nuclear Human Asset Research Programme (Sanharp)
Sanharp, formerly known as the PBMR Human Capital, Research and Innovation Frontier Programme, is a government initiative to develop human capital in the nuclear industry. Five projects were identified in consultation with key nuclear industry stakeholders, including the Department of Minerals and Energy, Department of Trade and Industry, Department of Science and Technology (DST), PBMR, Eskom, Necsa and the NNR. This programme is to be located at Necsa and funded by DST. The research programme is to be shifted to the National Research Foundation (NRF) and funded by them with DST funding.
To date a total of R10 million has been spent on projects as follows:
University bursary scheme: 78 students are presently studying engineering and science at local universities. The breakdown of the bursary is as follows:
PBMR Technology Plan
As part of PBMR’s Technology Plan, the organisation is currently sponsoring 36 undergraduates in the fields of chemical, electrical, mechanical, electronics and applied radiation.
PBMR offers the above bursaries in critical skills categories at six different universities. The intention is to grow the number of bursaries over the next two years, to ensure we have the necessary skills to meet our project schedule. Support and guidance is provided to students in the form of mentorship as well as extra lessons (where necessary) to provide students with every opportunity to succeed in their studies. The students are responding positively to these initiatives. PBMR has five females in the top 15 students in mechanical and chemical engineering.
Furthermore, PBMR is sponsoring:
- Five PhD students. Two are studying at local universities and three abroad. These students will be returning to PBMR to resume work after completion of their studies.
- Eight masters degree students at the North West University, Mafikeng Campus. These students are studying at the Centre for Applied Radiation Science and Technology.
- Five physics graduates who are completing an internship over the next two years.
- Two masters degree students at Carbon Tech Lab at the University of Pretoria.
- Four masters degree and one PhD student are studying at the University of Stellenbosch on research and development projects linked to PBMR.
- Seventeen PBMR employees are registered at the North West University, Potchefstroom Campus (on a part-time basis), in nuclear engineering.
SUPPORT TO EDUCATIONAL INSTITUTIONS
Schools outreach
During the year, presentations were done by PBMR to learners and teachers of various schools. The purpose of the presentations was to:
- encourage learners to consider their careers in engineering;
- give learners a clear picture of what the PBMR project is about, why it was formed, what is involved, why we’re doing it, and where it’s going; and
- familiarise learners with nuclear principles.
All presentations were interactive sessions and included sections on nuclear history, the environment and safety.
Web-based online library
An online library and training website for PBMR and related technology is under way.
Networks of expertise
The new South African research and development strategy embraces the notion of networks of expertise as a critical interface to enhance scientific and technological capacity. Good progress is being made to expand and build on a “network of expertise” for government-owned enterprises in South Africa at large. This will greatly enhance current efforts initially focused on PBMR alone.
LOCAL AFFILIATES
Universities
PBMR has contracted with local universities to conduct proof-of-concept research in specific areas.
- University of Stellenbosch (magnetic scrubber, fuel temperature measurement and passive reactor cavity cooling system). Activities are geared to assist in the validation of the performance of Structures, Systems and Components (SSCs) for the DPP as well as the development of SSCs to improve performance for future applications.
- University of Pretoria (waste minimisation graphite improvement and fuel development).
- University of the North West (UNW) (core heat transfer Research and Development). Advanced fuel cycle development. Reactor physics test facilities (anticipated to be operated jointly between the UNW (Potchefstroom Campus) and Necsa, but details still need to be finalised).
- University of the Witwatersrand (waste minimisation).
- Nelson Mandela Metropolitan University (fuel development).
- Other laboratories: iThemba Labs (magnetic scrubber).
Necsa
PBMR will build and operate the fuel plants in South Africa and will lease infrastructure services from Necsa. Necsa’s analytical laboratories are being used for isotopic and impurity analyses of uranic materials. The test methods are being installed and validated to support the development activities in the process laboratories as well as the selection and prequalification of suppliers’ of materials. Necsa will also in future be involved in fuel irradiation as well as post-irradiation examination of irradiated fuel.
INTERNATIONAL AFFILIATES
International Atomic Energy Agency (IAEA)
South Africa is a signatory to the Non-Proliferation Treaty and its nuclear facilities undergo regular inspections by IAEA teams. To fulfil its nuclear material safeguards obligations under the Non-Proliferation Treaty, and develop the methodologies to be applied in the DPP and fuel plants, PBMR (through Necsa), is actively engaged with the IAEA.
Institute of Nuclear Power Operations (INPO)
The nuclear electric utility industry created the Institute of Nuclear Power Operations (INPO) in 1979. INPO’s mission is to promote the highest levels of safety and reliability – to promote excellence – in the operation of nuclear electric generating plants. All US organisations that operate commercial nuclear power plants are members of INPO while nuclear operating organisations in other countries and nuclear steam supply systems, architect/engineering and construction firms are INPO participants.
The National Academy for Nuclear Training, which operates under the auspices of the INPO, embodies the US commercial nuclear utility industry’s commitment to high quality training and professionalism. The academy integrates the training-related efforts of nuclear utilities, the independent National Nuclear Accrediting Board and INPO.
INPO also represents US utilities in the World Association of Nuclear Operators (WANO). Formed in 1989, WANO unites every commercial nuclear power plant operator in the world with members from 32 countries currently operating some 435 reactors.
ECONOMIC DEVELOPMENT
National strategic project
The continuous globalisation of the world economy poses significant challenges to developing countries, exposing local industries to intense international competitive pressures. Corporations today organise their production activities across borders, mainly in accordance with their own corporate strategies and the competitive advantage of the host country. Furthermore, it is recognised that countries experiencing sustainable growth and continuously improving their standards of living, have achieved this primarily through growth and development in their manufacturing sectors.
In the manufacturing sector, products that are design and technology intensive create and sustain the greatest wealth creation. The forces of technology which are increasing the world’s global knowledge-based economies are expanding increasingly – even into traditionally low technology sectors. In countries such as Germany and Japan, the contribution of technologically intensive industries have grown to about 40% of manufacturing value added, while for Malaysia and South Korea it is currently about 35%. These values reflect those countries’ industrial strength which, in turn, provides the higher levels of economic stability and growth enjoyed by them.
Strategically, the nuclear industry, including PBMR, the anticipated Eskom conventional nuclear new-built programme and the activities at Necsa, presents a unique opportunity to develop and grow South Africa’s technologically intensive manufacturing industry. The deployment of PBMRs in both the electricity generation market and process heat applications, significantly increases the market potential. A localised nuclear industry will be vital to the future competitive advantage of South Africa’s manufacturing sector.
A localised nuclear industry should take advantage of the resurgent international nuclear market to build a sustainable, internationally competitive nuclear industry with sufficient market share and economies of scale to justify the investment in localised industries. The local nuclear industry should aim to become part of the international nuclear supply chain.
The impact on the bigger economy and socio-economic benefits will be significant. The establishment of a nuclear industry will provide opportunities for broad-based black economic empowerment (BBBEE) at all levels of the corporate and business environment – from strategic international partnerships and local industry enterprises, to small and medium enterprises. Skills development within a technologically intensive industry requiring exacting standards, presents a further significant development opportunity.
It is strongly believed that an investment in nuclear technology to meet an expanding local and international nuclear energy requirement, will provide the thrust required to grow South Africa’s technology intensive industries and achieve global competitiveness.
Localisation
The development and commercialisation of PBMR is a long-term project which will unfold in four phases:
- Phase 1: The design and construction of the Demonstration Power Plant (DPP) at Koeberg and associated Pilot Fuel Plant (PFP) at Pelindaba.
- Phase 2: The commercial phase constituting the supply of at least 24 plants to Eskom from approximately 2016 onwards as well as the construction of an associated commercial fuel plant at Pelindaba.
- Phase 3: The export of electric nuclear power plants to other parts of the world from approximately 2019 onwards.
- Phase 4: The development and supply of pebble bed reactors for process heat applications. The successful development of a process heat plant may accelerate the supply of pebble bed reactors to the international market.
 |
The Minister of Trade and Industry, Mr Mandisi Mpahlwa, said the PBMR project will assist industrialisation by establishing a secure and internationally competitive supply chain capable of delivering pebble bed reactors at the least cost alternative to PBMR’s target markets by maximising South African local content. |
To date, PBMR has actively cooperated with the Department of Trade and Industry to implement the existing national industrial participation programme (NIPP) requirements for contracts placed during the construction of the demonstration power plant phase. While the NIPP obligations placed on PBMR’s main international suppliers during the demonstration phase of the project will facilitate foreign direct investment, a longer term strategic development plan which exceeds the seven-year period envisaged in the NIPP obligations, will be required. The cabinet approved the competitive supplier development programme in January 2007. PBMR, in conjunction with Eskom, is developing a competitive supplier development plan that will maximise the localisation opportunities presented by both the PBMR market and the Eskom conventional nuclear programme.
The objectives of a nuclear localisation strategy can be summarised as follows:
- To establish a sustainable, internationally competitive local nuclear industry.
- To become a supplier of nuclear components and services to the local and international nuclear market.
- To assist in the development of an advanced manufacturing infrastructure and to promote the associated research and development in order to remain internationally competitive and to meet the required international standards.
- To maximise skills development, job creation and black economic empowerment through the nuclear industry.
- To supply high value goods and services to the local and export market.
- To promote technology transfer, joint ventures, new trading partners and foreign investment.
- To make a contribution to safe, environmentally sound energy technology.
PBMR is developing a series of business plans which will form the basis of a localisation strategy to be negotiated with each international supplier of the various nuclear subsystems. The establishment of a nuclear grade fabrication facility forms part of these considerations.
Macro-economic impact
To maximise the sharing of support system, the PBMR has been configured into a four-pack, multi module (MM) layout, which allows the plants to be brought on the line as they are completed.
According to a macro-economic study done by the South African economic research company, Conningarth Economists, the construction of the demonstration power plant (DPP) and a single MM will have a positive impact on all of the macro-economic performance indicators (such as Gross Domestic Product (GDP), capital utilisation and employment), measured as part of the macro-economic study. The analysis focussed on the production of a single MM of which the results can be used to derive the total economic impacts that will result from the production of an array of MMs.
The total incremental impact of the construction of PBMR’s on the country’s GDP is estimated at approximately R3,8 billion per annum (in constant 2006 prices), for the DPP and R3,5 billion per annum for a single MM. In total, this amounts to approximately R7,3 billion which is almost 0,44% of national GDP of South Africa for 2006. This is a considerable GDP contribution for a single project and is likely to be significantly larger once the impact of a single MM, has been adjusted to reflect the impacts associated with future MMs.
The total impact on capital utilisation1 amounts to approximately R7,9 billion and R8,2 billion per annum as a result of construction of the DPP and a single MM respectively. This level of capital equipment (including machines and buildings), will have to be available on an annual basis to ensure that the reactors can be produced. It therefore does not necessarily imply fresh capital investment. In addition, for as long as the reactors are in production, the capital cannot be put to any other use. The impact on employment amounts to 21 297 and 24 859 sustainable job opportunities per annum for the DPP and a single MM respectively. Of these, 2 490 and 2 101 are a direct result of the production of the DPP and a single MM respectively, with the balance resulting from other activities supporting the construction drive.
Over and above the effect on GDP, capital utilisation and employment, government revenue will increase by approximately R977 million and R992 million per annum as a result of construction of the DPP and a single MM respectively. It is also estimated that the positive impact on the balance of payments will amount to approximately R1,75 billion to R1,84 billion per annum.
The total impact on low-income households is estimated at R600 million and R515 million per annum for the DPP and a single MM respectively. Of the total household income generated by the payment of salaries and wages to employees as a result of the construction of PBMR’s, almost 21% will be destined for lower income households. This will contribute significantly towards poverty alleviation and the overall upliftment of the poor in South Africa.
1 Capital utilisation is the levels of capital required, on an annual basis, to sustain the production of the DPP and the MM.
 |
 |
Commercial viability
The demonstration phase is the period up until the demonstration reactor has been handed over to Eskom for the supply of electricity to the national grid. The direct project costs relating to this phase (ie for the demonstration power plant and pilot fuel plant) amounts to some R16 billion in June 2006 real terms. Additional funds have been assessed, however, to prepare for eventual commercialisation, including early manufacturing of fuel for Eskom for the demonstration reactor, test facilities and the costs of building a commercial organisation. An estimate has been made of the likely revenue to PBMR during the demonstration phase. The net total estimated cost of the total programme amounts to R17 billion.
All design and development costs related to the first-of-a-kind engineering of the demonstration reactor and fuel plant will be once-off and therefore not part of the commercial reactor cost profile.
The objective from 2014 is to operate PBMR as a normal, profitable enterprise selling commercial reactors both locally and internationally.
Supply chain
PBMR’s procurement strategy is to create an environment of competitive supply. In a mature technology environment, competitive supply through multiple supply chains is the norm. In a first-of-a-kind engineering environment, however, some components and systems of the plant need to be developed in their entirety, which, in many cases, requires the development of significant components of the supply chain as well. PBMR’s long-term supply strategy is not to integrate vertically in terms of component and subsystem supply, but rather to focus on the high-level value add related to reactor and fuel technology and supply, systems integration, commissioning and the supply of long-term maintenance and related services.
Given the fact that PBMR partners with its suppliers to leverage existing skills and knowledge as far as possible, it becomes of strategic importance for PBMR to control certain key intellectual property (IP). PBMR’s procurement policy on the ownership of intellectual property is that the company should own all IP that is developed utilising PBMR’s funds. Through the effective implementation of this policy, it is believed that PBMR will maintain its competitive edge by controlling all key IP developed as part of the demonstration phase of the project. PBMR will also control the key resources and intellectual capital to deliver these core offerings to the South African and international markets. These markets will be targeted for their attractiveness and accessibility.
Although PBMR performs a significant portion of the first-of-a-kind engineering work required to build and demonstrate the first reactor, the skills and know-how required to perform the first-of-a-kind engineering work on certain key subsystems also vests in a few strategic suppliers.
In line with a strategy of leveraging existing skills and knowledge as far as possible, PBMR has partnered with three strategic suppliers for the supply of key components and systems. The criteria for this selection were:
- existing supplier technology, skills and knowledge, which would limit PBMR’s first-of-a-kind engineering spend;
- a unique requirement from PBMR, for which no other technologies or suppliers existed;
- agreement from these suppliers to invest in technology, skills, knowledge and capacity in order to meet PBMR’s supply needs, not only during the demonstration phase, but also during production.
Broad-based black economic empowerment (BBBEE)
The impact on the bigger economy and socio-economic benefits will be significant. The resurgence of the nuclear market internationally and the recognised lack of industrial capacity to fulfil this demand, will offer growth opportunities. The establishment of a nuclear industry will provide opportunities for BBBEE at all levels of the corporate and business environment – from strategic international partnerships to local industrial enterprises to small and medium enterprises. Skills development within a technologically intensive industry requiring exacting standards presents a further significant development opportunity.
In 2005, PBMR has committed to achieve a BBBEE target of 50% by 2011. Through its continuous encouragement for its suppliers to obtain BBBEE certification and through its BBBEE policy framework, PBMR achieved a score of 49% for the financial year ending 2007. PBMR continuously encourage suppliers to adhere to its BBBEE values via its BBBEE policy requirements.
Preferential procurement
PBMR’s Preferential Procurement Policy aims to implement preferential procurement, to promote consistency across suppliers and give effect to BBBEE objectives as outlined in the BBBEE Act.
The Preferential Procurement Policy is guided by the following legislation, regulation, policy and industry agreements:
- The Constitution of Republic of South Africa Act (No 108 of 1996);
- The Public Finance Management Act (No 1 of 1999), as amended;
- The Broad-Based Black Economic Empowerment Strategy Document (2003);
- The BBBEE Act (No. 53 of 2003);
- The Preferential Procurement Policy Framework Act (No 5 of 2000) and regulations;
- All gazetted charters and codes of practice issued under the BBBEE Act.
Special attention is given to substantially increase PBMR’s spend on targeted suppliers and local manufacturers. BBBEE verification mechanisms and criteria are aligned to the BBBEE Act as well as the dti generic scorecard contained in the dti Codes of Good Practice.
In order to give preference to BBBEE enterprises, proposals from quoting and tendering suppliers are evaluated on a point-scoring system. In addition, PBMR affords BBBEE tenderers (with a BEE status level of 1 to 3) the opportunity to match the price bid by the lowest responsive bidder in order to be awarded a contract. This intervention may only be used in cases where the only inhibiting factor to the BBBEE bidder being awarded the contract is price and the price differentiation does not exceed 5% of the lowest bid. In cases where there are suitably qualified BBBEE companies which lack the capacity to carry out the total contract, PBMR may utilise different procurement mechanisms to ensure their participation.
Technology development
A number of technology development projects has been initiated for future plants. The objectives of these projects are to:
- improve the fuel;
- reduce the radioactive waste production;
- improve the passive operational and safety features of the plant;
- improve the construction materials;
- explore the use of PBMR as a PHP;
- improve HTR analysis capability.
Fuel industrialisation programme
PBMR fuel is based on a proven, high-quality German fuel design consisting of low enriched uranium triple-coated isotropic (TRISO) particles contained in a moulded graphite sphere. PBMR has already achieved equivalence with the German fuel manufacturing technology has undertaken an extensive programme to ensure long-term economic viability of the technology. This programme should consolidate PBMR’s position of leadership in the field of TRISO coated particle fuel production.
 |
ENVIRONMENTAL, HEALTH AND SAFETY PBMR is a proliferation resistant reactor system with downstream opportunities to close the fuel cycle. PBMR offers a unique solution to government relating to its objective of managing energy-related environmental and health impacts. Direct occupational health risks and global greenhouse issues can be mitigated through the appropriate use of nuclear energy. |
|
safety first safety objectives |
- CDM is a strategy based on the Kyoto Protocol to reduce greenhouse gas emissions by allowing industrialised countries to invest in projects that reduce emissions in developing countries. CDM could result in additional investment being available for activities in South Africa which result in a less carbon-intensive economy;
- The national treasury framework is focused on introducing environmental taxes and charges to support sustainable development. Nuclear activities are specifically mentioned under ‘rehabilitation funds and guarantees’ in the context of nuclear power station decommissioning and treatment of spent nuclear fuel.
“ PBMR commits itself towards a clean and safe environment for all South Africans and subscribes to the NNR’s regulations in terms of nuclear safety. These include regulations on safety standards and provisions pertaining to the transportation of radioactive material, the disposal of radioactive waste, radiation protection and environmental monitoring and surveillance. Accordingly, it is necessary for PBMR to submit a safety case for approval before a nuclear installation licence can be issued.”
Eskom, PBMR and the National Nuclear Regulator have all agreed on a staged licensing process. The stages are:
- construction and installation;
- fuel to site/fuel load/initial criticality and power ascension;
- operation;
- decommissioning.
At each licensing stage, a full safety case demonstrating compliance with regulatory requirements, must be submitted to the National Nuclear Regulator.
Environmental impact assessments
- Demonstration power plant environmental impact assessment:
Eskom submitted an application for authorisation in terms of the Environmental Conservation Act (ECA) for the construction of the DPP at Koeberg to the DEAT by Eskom on 26 June 2000. A positive record of decision for the construction of the DPP was issued by the DEAT on 25 June 2003, but was challenged by the Legal Resources Centre (acting on behalf of the anti-nuclear organisation Earthlife Africa) and sent for review to the Cape High Court.
The court set the record of decision for the demonstration power plant aside on 26 January 2005 and ruled that Earthlife Africa and other interested parties were to be afforded the opportunity of making submissions to be taken into account before a new decision is taken. Eskom, in conjunction with PBMR, reviewed the strategic merits of complying with the court’s order or submitting a new application for an ECA authorisation and decided on the latter. The reason for this decision was principally that the design capacity of the DPP had increased since the submission of the original application. A new application for an ECA authorisation for the DPP was submitted in August 2005 and the scoping report was submitted for public participation in January 2007.
- Pilot fuel plant (PFP) environmental impact assessment:
An application for an ECA authorisation for the construction of the PFP at Pelindaba, including the storage, handling and processing facilities for raw materials from Durban to Pelindaba and for the transportation of manufactured fuel from Pelindaba to Koeberg, was submitted to the DEAT by Necsa on 13 June 2000. A positive record of decision was issued by the DEAT on 25 June 2003.
Although 23 appeals were lodged against the PFP record of decision, the DEAT dismissed these appeals on 26 January 2007. The DPP record of decision and the PFP record of decision contained provisions which made the implementation of the one subject to the implementation of the other, and the question arose whether the process would affect the PFP record of decision. DEAT has also ruled that the DPP record of decision which was set aside does not affect the validity of the PFP record of decision. The PFP record of decision is valid for an operational period of up to seven years after the commercial production of fuel.
|
 |
