Treasury says that because taxpayers and electricity consumers will bear the full costs of the government’s nuclear build programme, any accurate assessment of its affordability will have to include a full analysis of its social and economic impact.
Finance Minister Malusi Gigaba has made it clear that building 9.6 gigawatts of nuclear power (9,600 megawatts) is not affordable at present.
Treasury underlined this on Friday while briefing Parliament’s finance committees.
Treasury concluded two years ago that it wouldn’t be wise to embark on the nuclear programme until the country got a proper handle on its debt.
Treasury’s Michael Sachs said: “The analysis showed a 9.6 gigawatts nuclear programme would have significant implications for national income, the total debt burden, the international financial position of the country, the balance of payments, (and) for taxpayers and electricity consumers – who will bear the full cost of the programme.”
The country’s financial situation has since deteriorated further.
“We cannot afford nuclear at this stage. Not only can the budget not afford it, but the country cannot afford it,” Sachs added
No money has been allocated for the nuclear programme over the next three years, although President Jacob Zuma is insisting it will still go ahead.
Treasury’s analysis was based on a 2013 study done by the Department of Energy looking at the feasibility of procuring and building the 9.6 gigawatts of nuclear power as required by the 2010 Integrated Resource Plan.
Sachs says additional guarantees or other support from government would be needed if Eskom were to absorb the costs of the programme on its own balance sheet.