COMPANY PROFILE
2013
NECSA
Bringing nuclear to the fore
CompANY PROFILE
Bringing nuclear to the fore Editorial: Joe Forshaw Production: Phil Bird The nuclear industry has always had an ambiguous image with people unsure of the safety and reliability of the technology used. In South Africa, the government recognise the benefits of working with nuclear energy and nuclear technology and over the next 20 years more nuclear power stations will be built in the country and more manufacturing will be done following nuclear research. We speak to Phumzile Tshelane, CEO of Necsa, to find out more about the growth of the nuclear industry.
For some time, the supply of electricity in South Africa has been under strict scrutiny. The country’s main power stations, run by Eskom, are still mostly coal-fired meaning their life will eventually come to an end and other energy sources will need to be sourced. Moreover, the current installed capacity is barely sufficient to meet the electricity demand. The government have made some attempt to preempt this with the release of the Integrated Electricity Resource Plan (IRP) back in 2010 which stated the predicted demand for electricity and how this demand could be met. After the IRP was revised, following public consultation in 2011, it was suggested that around 14% of the country’s energy mix should come from nuclear sources by 2030. Also in 2011, the energy minister committed R586million for the South African Nuclear
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Energy Corporation (Necsa) to continue with its central role as the anchor for nuclear energy research and development, and innovation. The state-owned company has certainly continued with its important research and development and CEO, Phumzile Tshelane, tells IndustrySA that the country is moving along strongly with plans for a new research reactor at Necsa and new Eskom power stations. These would add to manufacturing and research capabilities as well as contributing much needed capacity to the national grid. “The Department of Energy (DoE) is leading a project to evaluate the various factors that are involved in building 9.6GW of power plant,” says Tshelane. “When you build something of this size you want to localise and you want the funding requirements to be fully understood. We also want to use technology from our
South African Nuclear Energy Corporation (NECSA)
The SAFARI-1 Research Reactor viewed from the crane gantry in the reactor containment building
own country as far as possible and bring the IP to South Africa. “To produce 9.6GW we are looking at six new nuclear reactors depending on their size. If each was about 1000GW then we would need nine but if they produce 1600GW, like the ones being produced in the UK, then we will need six.” Although there has been no final decision made about the location of the new power plants, it seems as though Port Elizabeth and Cape Town may be favourites depending on the results of various evaluations. “Eskom, for several years now, has been looking at potential sites from a perspective of environmental impact assessment,” explains Tshelane. “Three sites were zoomed into; one is next to the current Koeberg power station in Cape Town, another is to the south of Koeberg, and the most likely site is in Port Elizabeth. This is by no
means a foregone conclusion because the environmental impact assessment has not been completed yet.” Tshelane expects the site selection process to gain good ground over the next 12 months but he says that extra considerations have had to be taken into account after the nuclear disaster in Japan. “The first unit was targeted to be online by 2023 and the last one by 2027, however we are busy with the site impact assessment which has been made much more difficult following the events at Fukushima in Japan. The site safety report, alongside the environmental impact assessment, which both contribute to whether a construction license will be granted, are at advanced stages and at some point in the next year the two reports will be available. “If we can manage to complete the reports in the next year then the 2023 timescale can be met. If it’s beyond
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CompANY PROFILE the middle of next year then we start moving towards 2024.”
NEW REACTOR Away from power generation, Necsa is involved in many other activities, so many that you or your company may have been directly impacted by their business without even realising. One of the most significant areas of activity is the production of nuclear medicine. Necsa manufactures medical isotopes for countries across the globe and does so on an industrial scale. At the heart of this production is the nuclear research reactor, SAFARI-1. Commissioned in 1965, SAFARI-1 is now the most commercialised nuclear reactor in the world with ISO 9001, ISO 14001 and OHSAS 18001 accreditation. There are plans in place to build a new reactor so that Necsa can realise further commercial value although Tshelane suggests, as you may expect, that designing a nuclear reactor has a number of sticking points. “We know that it is going to happen, it has to. We started thinking a few years ago that because we are producing these radiopharmaceuticals from SAFARI-1 we could build a dedicated isotope reactor and there was a
feeling that this would be commercially sound. “When we built the business case and looked at it further, we found that it is a little more complicated for a dedicated isotope reactor and the economics just don’t work out. We had to stop and re-think our approach and currently we want to get a multi-purpose reactor in place and continue with research and production of radioisotopes for pharmaceutical products. That is where we are now, busy with the redesign. We are busy finalising the design requirements so that when we go to the market we have a design frozen in place. “We hope to complete this before February next year and after that we can consider a procurement process.” When all designs and funds are finalised and construction periods have been confirmed (expected to last three to five years), it is assumed that the new reactor could be built and commissioned by 2020. Rumours have emerged about potential options for construction of the new reactor. It is said that Necsa could propose tenders which would result in an EPC contract being offered for the design, build and delivery of the reactor, or Necsa may seek a partner who could design and deliver the reactor and offer tenders for
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www.bfluor.co.za the construction of the reactor facilities. Either way, the company is keen to have as much South African involvement as possible. “Necsa and South Africa want an option that allows for optimum local participation,” says Tshelane. As for the rest of the world, reports suggest that there are around 240 research reactors in 56 countries. In Africa; Algeria, Egypt, Morocco, Ghana and Nigeria all have reactors and Libya has one in temporary shutdown. The DRC had two research reactors which have both been permanently shut down.
NECSA ACTIVITIES Interestingly, the perception of Necsa in the public eye and the company’s profile has not been that high in recent times; strange considering this is a state-owned company with around 2000 employees. Tshelane explains that sometimes it can be difficult for people to fully understand the activities of Necsa as the company operates in such a diverse range of areas. It owns subsidiary companies including NTP Radioisotopes and Pelchem, it manages and operates the Vaalputs National Radioactive Waste Disposal Facility and also acts as a leading industry trainer, up-skilling large
numbers of people every year. “The profile of Necsa has not been that high as many people find it difficult to understand what Necsa’s business is,” says Tshelane. “To a large extent, that is driven by the fact that we do a lot of things. For example, we do research and development in the nuclear field, we do production of radioisotopes, we produce fluorine related compounds, we do training; we are essentially an anchor for government policy-making process, in the nuclear sector. If you take all of these things and compare us to a private company, it’s much more difficult to wrap your mind around what we’re doing. “We’ve had parliamentarians ask us to find a simple way of explaining who we are but we can’t explain it any simpler than talking about our activities which are diverse and complicated.” Even regular customers of Necsa sometimes struggle to understand exactly how far the company’s reach extends but Tshelane suggests that long-standing stakeholders tend to have more of a complete idea. “Because we are not a single product or single service company, it’s difficult for people to conceptualise what we are,” he says. “Some stakeholders will interact with us in one area
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South African Nuclear Energy Corporation (NECSA)
and think that that’s all we are. In my experience, it’s really the who are continuously engaged with us who fully understand what we are as Necsa.” Of course, Necsa is more than just a research facility. Another of its primary functions is the production of materials for use in medicinal and chemical environments amongst others. “We export radiopharmaceuticals to over 60 countries and we happen to be, at this point in time, the second biggest producer in the world, second only to a company in Canada,” says Tshelane. “Because we export heavily, and our domestic market for these types of products is very small, it is difficult for us to profile ourselves locally as a radiopharmaceutical product producer and to be in people’s faces.” This work for export markets is invaluable to the South African economy, earning the country millions of Rand in exchange value every year and the growth of these activities is something which Tshelane wants to promote and celebrate.
“We also have a subsidiary called Pelchem” says Tshelane “that produces fluorine based chemicals such as xenon difluoride and nitrogen trifluoride, which are important in refineries and those types of production
“I often tell visitors to drive slowly when they enter our site so that they can take in the ambience” facilities. We export these to more than 25 countries around the world. We also underpin a lot of the manufacturing industry in South Africa. We have not profiled, until now, that company and the impact it has on local industry. Our work now is to make sure we are known for what we are good at, and not what we used to do back in the 70s and 80s.” Such a wide ranging activity base helps Necsa to move closer to their vision of ‘pursuing nuclear technology excellence for sustainable social and economic development’.
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CompANY PROFILE
TRAINING Obviously, an organisation like Necsa needs a highly skilled workforce to conduct its daily operations. While welders and toolmakers might be readily available for some industries, operating in the nuclear field is different, and specific knowledge is required to ensure safety standards are met. Necsa has developed a world class facility for such training and the training facility benefits not only the nuclear technology industry but a host of different industries requiring specialist skills. “For some time the country has been losing capabilities to train the type of people we need,” says Tshelane. “Because of this and the Necsa requirements, it was decided we needed a training facility. However, the legislation that gives birth to Necsa requires Necsa to build skills in the nuclear area. “We can’t have a nuclear welder or instrumentation technician who doesn’t understand the requirements of working in a radioactive area and we have had to generate this kind of knowledge,” he adds. To add to the training offering from Necsa, the company also offers a comprehensive testing service to ensure professionals in training are working to the highest standards. This service is used by many industries and has government accreditation. “What is ironic is that 80% of the skills that we generate are not used by us; they are used by other industries. This is an opportunity for us to earn money whilst generating skills for the South African economy,” says Tshelane. “We market ourselves as expert trainers in certain areas and we have been accredited to provide trade testing so people can become recognised in the national system as a trained artisan. We have a decentralised testing centre and we have received government accreditation to do this. We are growing rapidly as a trainer and differentiating ourselves by training highlyskilled, high-quality individuals. We train to a nuclear level and all our learners are trained to the same quality.”
SUCCESS AS CEO September marked the first anniversary of Tshelane’s appointment as CEO at
Mr Phumzile Tshelane, Necsa CEO PAGE 8 OCT 13
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Necsa and in his first year, the highly experienced former Eskom Nuclear New Build Division GM has seen substantial success in all areas from finance to compliance to company moral. “A lot of it has been very enjoyable; I’ve had a great deal of fun doing this job,” he says. “The fun comes not from the ease of doing the job but from the difficulties I found when I came here. “Firstly, we had to look at the funding situation of the company and we’ve been lucky enough to turn that around in a period of less than 12 months. Normally to turn around a company it would take a whole three year contract and beyond. The damage was not so bad when I came here. “Secondly, we had to address regulatory compliance. We’ve had to address some processes to ensure we comply, and that we have achieved with some ease, I didn’t think it would be that quick to be able to technically get up to speed and really achieve the level of compliance that we are in now. “Thirdly was the morale in the company. There was a threatening aspect of retrenchment because of
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the financial situation. Since I arrived that significant threat has been dissipated. These are the successes of my first year. The biggest success that we still have to show, relates to directing the company to commercial achievement.” Necsa hopes that Tshelane’s experience will help the company to contribute to South Africa’s nuclear new build.
THE FUTURE The future holds many opportunities for Necsa and the nuclear industry in South Africa. Obviously, contributing to the energy mix is an important factor and continuing to encourage export business is good for the economy so this has become an area of focus. Necsa is looking to integrate its manufacturing
“There was a threatening aspect of retrenchment because of the financial situation. Since I arrived we haven’t retrenched anyone and we have removed that threat” OCT 13 PAGE 9
CompANY PROFILE
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CompANY PROFILE and distribution processes and push its high quality products in international markets, especially Europe. “We’ve bought a company in Belgium which was a liquidated entity and we are turning it around to be an outpost for Necsa products in Europe,” says Tshelane. “We are looking at other opportunities in France and elsewhere to make sure we further integrate our production. “We produce Molyndenum-99 and we are producing the daughter item of it, Technetium-99m which is what pharmaceuticals use, and that adds more value to our product so we will look to grow this in Europe over the next year.” Aside from Europe and South Africa, Necsa has a presence in other noteworthy locations, and Tshelane would like to continue increasing the business done at international level, not only with sales but with production too. “We have a presence in Australia and in the Middle East but it has taken us a long time to expand internationally,” he says. “Now we are moving quicker and we need to make sure we grow to the high-end in terms of manufacturing. We are not just manufacturing raw materials but we are beneficiating our materials in
other countries too.” At home, Necsa is based in Madibeng Municipality, North West Province and the site is perhaps not what you would expect from a world class nuclear research facility. “I often tell visitors to drive slowly when they enter our site so that they can take in the ambience,” says Tshelane. “You could run into some very interesting animals as you come onto the site, it’s a rather pleasant place to work. If you look in the right direction you might just see the Hartbeespoort Dam between two mountain peaks, it really is beautiful.” So for now it seems that Necsa is in a good place, physically and organisationally. With the company now making profit, government targets in place to grow the nuclear contribution to the country’s energy mix, and a CEO who is looking for growth and has restored morale, it is fair to say that this international industry leader is on the fringe of some very exciting times.
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“We are essentially an anchor for government policy making process in the nuclear sector”
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