The parent agency of South African electricity utility Eskom has announced plans to cut off government funding for the Pebble Bed Modular Reactor project.

Minister Barbara Hogan, head of South Africa’s department of public enterprises, said that the decision was partly because of the severity of the current economic downturn.

But she also cited ‘sobering realities’ from the PBMR project: no lead customer or investment partner, further investment could require more than ZAR30 billion (EUR 3.2 billion), construction delays, withdrawal from participation in the Next Generation Nuclear Programme as part of the Westinghouse consortium when Westinghouse pulled out, and lack of applicability of pebble bed technology (which is Generation IV) to a near-term nuclear new-build programme (which would use Gen II or Gen III reactor designs).

Now the PBMR project will aim to protect the intellectual property and PBMR assets. Remaining staff will be laid off. South Africa’s Nuclear Energy Corporation will decommission the fuel development laboratory and mothball the helium test facility. The government will seek to continue to maintain and support nuclear graduate programmes. (MPS understands that the HTTF facility at North-West University, which had been partially supported by PBMR, will continue to operate). The government will commission a review and audit of the project to identify lessons learned and outstanding actions, ‘with a particular focus on corporate governance aspects,’ Hogan said.

She confirmed that ZAR7.4 billion (EUR 794 million) has been spent on PBMR in the last 10 years. Of that amount, the South African government contributed 80.3%, Eskom 8.8%, Westinghouse 4.9%, Industrial Development Corp 49% and Exelon 1.1%.

Hogan said that problems with the project started to emerge in 2005.

“Between 2005 and 2009, it became increasingly clear that, based on the direct-cycle electricity design, PBMR’s potential investor and customer market was severely restricted and it was unable to acquire either,” Hogan said.

She called the leakage of skills that will result from closing down the project ‘regrettable but unavoidable’.

She mentioned that there was no question about the technical validity of the project.

MPS understands that the PBMR reactor vessel is currently being manufactured by ENSA in Spain.

The PBMR project began in 2000 when a detailed feasibility study began. In 2003 the national nuclear regulator reported positive views on PBMR licensability. In 2005 the project’s focus shifted to licensing of a demonstration power plant and detailed design work.