EE-News
News and announcements from EE Publishers  Issue 330, February 2016
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Westinghouse opposes Eskom, Areva appeal to Concourt, lodges counter appeal
 
by Chris Yelland and Aimee Clarke, EE Publishers

In further developments in the ongoing dispute of a R5-billion contract award by Eskom to Areva, Westinghouse has opposed their applications to the Constitutional Court for leave to appeal a Supreme Court of Appeal (SCA) judgement on 9 December 2015. The SCA judgement had set aside the contract, declared it "unlawful", and ordered that it be remitted back to Eskom for reconsideration.

Click here to read the full article

The contract award, said to be the biggest that has ever been disputed in a court of law in South Africa, includes the replacement of six steam generators at Eskom's Koeberg nuclear power station in the Western Cape. Eskom and Areva say that the steam generators are approaching their end-of-life, and that it is critical that they be replaced during the normal reactor refueling and maintenance outages in 2018 (known as the X23 outages).


                                      Nuclear reactor; Source: Energy Northwest

The Koeberg power station, built in South Africa in the mid-1980s by French nuclear contractor Framatome - the predecessor of Areva - using nuclear reactor and steam generator designs licensed from Westinghouse. Indeed, Westinghouse was a founding shareholder of Framatome in 1958, before it disposed of its shareholder interest in Framatome in later years.

The Koeberg nuclear power station has an output of about 1800 MW, and its two 900 MW reactors, each with three associated steam generators, have been in commercial service for some 30 years. The design life of the power station is 40 years, before significant upgrades, including the replacement of the steam generators, are required to extend its life.

Could there be any safety issues arising from delays in the steam generator replacement contract and continued operation of the Koeberg reactors beyond the planned X23 outage "deadline" of 2018? What is the risk of the National Nuclear Regulator of South Africa shutting down Koeberg due to safety concerns resulting from any further contract delays beyond 2018? Could this impact on security of supply and load shedding in South Africa? Would there be any additional risk of a nuclear accident if the replacement of the steam generators were delayed beyond 2018?

These were not questions Eskom or Areva were prepared to answer for an earlier article by EE Publishers. However, the applications lodged with the Constitutional Court by Eskom and Areva for leave to appeal the SCA judgment, and the responding affidavit by Westinghouse opposing leave to appeal, lay these questions bare for all to see, and form a substantial part of the dispute. Central to Eskom and Areva's appeal, of course, is that if the SCA judgment is not successfully overturned in the Constitutional Court, there is indeed no possibility that the Koeberg steam generators will able to be replaced by the 2018 X23 outage "deadline".

However, according to Westinghouse, the replacement of the Koeberg steam generators could be done during either of the two subsequent scheduled reactor refueling outages after 2018, and before end-of-life in 2024/25, without compromising safety or security of supply. Eskom and Areva, on the other hand, argue that any delay beyond 2018 would pose a significant risk to the safe operation of the power plant and to security electricity supply in South Africa, and would increase the possibility of a nuclear accident, however remote this may be.

Alongside its responding affidavit opposing leave to appeal, Westinghouse presents an additional application for the admission of substantial new evidence supporting its position. It submits that the evidence clearly shows that contrary to what Eskom and Areva say, the so-called "deadline" of 2018 is not critical at all, and that the existing steam generators can continue in service safely for several more years.

Westinghouse therefore asserts that is able to install replacement steam generators long before end-of-life of the existing steam generators. On this basis, in a separate notice to the Constitutional Court, Westinghouse submits that the SCA judgement of 9 December 2015 erred in not granting Westinghouse substitution relief, and applies for a cross-appeal to have Westinghouse substituted for Areva as the successful tenderer.

Areva on the other hand suggests, without any meaningful substantiation in its court papers, that the Koeberg steam generators "are prone to Inter-Granular Stress Corrosion Cracking", which requires their replacement by 2018. This is vehemently rejected by Westinghouse, supported by the new documentary evidence presented by Westinghouse in its court papers before the Constitutional Court.

The claims by Eskom and Areva in respect of the urgency and criticality of the 2018 X23 outage date for completion of the steam generator replacement are hardly surprising. They were cited for awarding the contract to Areva in the first place, where a three-month "float" in Areva's project plan was indicated as a deciding factor. Westinghouse argues that the three-month float in Areva's project plan was unlawfully introduced at the last minute as an extraneous adjudication criterion to manipulate and tip the scales in favour of Areva, even though Westinghouse had guaranteed the 2018 completion date, on pain of substantial penalties if not met.

Areva's application for leave to appeal to the Constitutional Court makes much of the matter of the locus standi of Westinghouse Belgium (rather than Westinghouse USA) in opposing the award of the contract to Areva in the first place. This despite the fact that this tortuous argument was never raised by Eskom as the end customer, and was rejected by both the South Gauteng High Court and the SCA. The SCA ruled that Areva's arguments in this regard were "mere surplusage" to be "disregarded", and found that Westinghouse Belgium had indeed established its locus standi and its "legal lineage" to Westinghouse USA... (more)

 

2016 SAIEE SmartGrid Conference 
  
The South African institute of Electrical Engineers (SAIEE) invites you, your colleagues and all interested persons to the 3-day
 
2016 SAIEE SmartGrid Conference
 
DATE: 23 to 25 February 2016
TIME: 8am to 5pm daily
VENUE: Eskom Academy, Midrand
  
 
If you register before 16 February 2016 to attend, there is a 20% discount off the conference fee!
  
International keynote speakers and presenters include:
 
Prof. Massed Amin - regarded as the "father of smart grids", and leads a number of extensive projects in smart grid research. Since 2003 he has served as Director of the Technological Leadership Institute at the University of Minnesota, and occupies the Honeywell/H.W. Sweatt Chair in Technology Leadership at the same University
 
Mr. Kurt E. Yeager - who has over 30 years of experience in the energy industry, authored over 200 technical papers and publications on energy and environmental topics, including a book entitled Perfect Power. Mr. Yeager is the Vice Chairman of the Galvin Electricity Initiatives Perfect Power Institute.
 
Mr. Lee Stogner - is president of the Vincula Group, a consultancy in the USA that specializes in the Internet of Things. He has over 30 years of design, consulting, project management and business development experience across a range of industries. He is active in promoting the development of the Internet of Things through his participation in the IEEE Smart Grid Initiative.
 
Prof. Qing-Guo Wang - from the Department of Electrical and Computer Engineering at the National University of Singapore and will be a visiting Professor within the Intelligent Systems Institute at the University of Johannesburg. He has published about 400 technical papers and authored six books, and co-holds five patents both in the USA and Singapore.
 
 

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