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Nuclear energy will play a significant role in SA’s energy future, says Eric McDonald, managing director (Operations), at Lesedi Nuclear Services.


Lesedi Nuclear Services FEATURE


s anybody familiar with the South African electricity industry will know, the sector needs capital investment to keep up with demand growth-efficiency. It has faced many challenges in recent years and, with the economy growing faster than expected in the face of the downturn, electricity capacity is coming under increasing pressure. The government has recently proposed a long-term energy mix, with a smaller role for coal and strong renewable and nuclear energy components, in its long-awaited draft of the 2010 integrated resource plan (IRP). The plan would result in South Africa’s energy mix in 2030 comprising 48 percent coal, 16 percent renewable energy, 14 percent nuclear, 9 percent peaking open cycle gas turbine, 6 percent peaking pump storage, 5 percent mid-merit gas and 2 percent imported hydroelectricity. The nuclear build programme would come on stream in 2023. “Electricity consumption has been growing rapidly and this is, of course, no big secret, Eskom has been struggling to meet the growing demand,” says Lesedi Nuclear Services’ managing director (operations) Eric McDonald. “In 2008, the government basically took control and suspended Eskom’s expansion plans while it tried to convince private companies to build power plants. At the same time, regional electricity demand exceeded supply capacity and it resulted in a five-day shutdown of most mines in the country, early in 2008. In December of that year, South Africa halted plans to build a second nuclear plant, as the global financial crisis tightened credit markets. Eskom subsequently cut several expansion programmes because of a lack of funding.

However, Eskom had, earlier committed to invest in building new coal and gas turbine plants to address the crisis. We were involved in building 14 150-megawatt gas turbines for the Open Cycle Gas Turbine Project. We actually had two contracts: the EPC with Eskom, where we did the full design for the balance of the plant; after which we also had a project with Siemens, where we erected the turbines under their supervision. It was the first new build power station since the 1980s. “But more needs to be done; by 2025 the plan is to double SA’s generating capacity to 80GWe,” adds McDonald. “This is great news for the likes of Lesedi, which was initially founded to provide technical resources for the nuclear power industry. We are obviously a subsidiary to AREVA, which offers customers technological solutions for nuclear power generation, electricity transmission and distribution. That puts us at a great advantage. We are well-placed to capitalise on South Africa’s nuclear and energy potential.” The IRP, approved by the interministerial committee, is now in the public domain for comments. Koeberg, the country’s only nuclear plant, started operations in 1984 and is located about 30 kilometres north of Cape Town in Western Cape province, not far from Lesedi’s HQ.

We are wellplaced to capitalise on South Africa’s nuclear and energy potential

DEMAND GROWTH Lesedi is proudly South African and believes in the future of the country. “We are indeed,” says McDonald. “We have invested in developing a variety of business support skills for different levels of our employees in order to ensure high standards of delivery.”


Lesedi Nuclear Services FEATURE

One scheme is the Engineers in Training (EIT) programme. “We recruit recent graduates whom we put through an 18-month training and mentorship programme,” says McDonald. “It is part of our development programme, and it is typically the type of initiative that we have got in place to develop our people.” Lesedi is committed to providing work and skills transfer opportunities within the company. Initiatives such as EIT provide graduates with a solid foundation within an industry that can be challenging to develop in. “This is a ‘real-life’ training mentorship programme,” McDonald explains. “There aren’t many areas of exposure for people within the nuclear environment here in SA. So it offers a good platform for us to have these people trained in the right environment. It also involves sending some of them abroad on an AREVA project, which enables them to apply their knowledge in a given project’s day-to-day activities. This also ensures that when bigger projects kick 4

in, we have the required human resources to utilise. “Our success and competitive edge lies in our employees, their commitment, innovation and contribution. We are committed to uplifting and developing our resources in SA. For us to play a significant role in the energy market going forward, we need to develop the capabilities within the company and to put ourselves ahead of the pack for when projects come up, ready with resources in-house, added to the access that we have to additional resources from AREVA, when required. “Readily available in-house resources put us in a good position for when tenders get put out,” says McDonald.

BEE Lesedi is a Black Empowerment Enterprise and its skills development policy supports and subscribes to current legislation (the Employment Equity Act, the Broad Based

Black Economic Empowerment Act No. 53 of 2003, and the Codes of Good Practice). “We want to become the company of choice in the nuclear industry, but we also want to empower and build an industry here in SA; this has been one of our goals since when we started,” explains McDonald. “Black ownership, control and executive management, employment equity, skills development, preferential procurement, enterprise development and corporate social investment are some of the ways that black empowerment is achieved.” Lesedi’s history dates back to 1999 when Lesedi Engineering, a start-up BEE company, was formed. In 2001, Lesedi Engineering and Intens - another engineering services company amalgamated to form Lesedi Nuclear Services. The company later sold 45 percent equity to AREVA. In 2006, Lesedi became a subsidiary of AREVA, when the French firm acquired a further 6

percent in the firm, giving it a 51 percent majority stake. “We are basically a Project Management and Design Engineering company,” says McDonald. “We provide integrated engineering solutions for all phases of a project, from initial design data and feasibility studies, through conceptual and detailed design, to planning, construction, start-up and commissioning, handover and operational support.” Lesedi’s integration into AREVA has been beneficial for both companies. “The integration has enabled Lesedi to access crucial international nuclear expertise, in exchange for which we have offered AREVA a well-prepared platform for its localisation initiatives,” says McDonald. “Today we are probably the biggest black empowerment nuclear services company in the country. We certainly want to maintain that; and we certainly want to play a significant role in the nuclear world going forward.” END


LESEDI NUCLEAR SERVICES South Africa Magazine, Suite 9 and 10, The Royal, Bank Plain, Norwich, Norfolk, UK. NR2 4SF TNT Magazine, 14-15 Child’s Place, Earl’s Court, London, UK. SW5 9RX Enquiries Telephone: 0044 (0)1603 343267 Fax: 0044 (0)1603 283602 Subscriptions Call: 00441603 283573

Lesedi Nuclear Services Edison Way Century Gate Century City 7441 Cape Town, South Africa T: 0861 551 1049 or + 27 21 525 1300 F: + 27 21 5251333