By Agnieszka Flak JOHANNESBURG (Reuters) - South Africa sees nuclear playing a key role in meeting growing demand in the continent's biggest economy, which is battling a power crunch, the Minister of Public Enterprises, Barbara Hogan, said on Thursday. "There is a lot of controversy about nuclear in the world... (but) there can be little doubt now that nuclear is going to play one of the most important components in our energy provisions going forward," she told a conference. South Africa is one of the pioneers in developing a power and heat processing plant based on the pebble-fuel technology. Jaco Kriek, chief executive of the technology firm spearheading the effort, said the first pilot plant to generate 80 megawatts of electricity could come on stream by 2018, with initial costs estimated at 27 billion rand. Kriek said his firm, Pebble Bed Modular Reactor (PBMR), aims to reduce the cost of the plants to around 6 billion rand to make them economically viable to compete with other energy and heat sources such as gas and coal. He said the technology was best suited for decentralised areas without a connection to the grid, and being modular in nature, several units can be added to supply the amount of electricity and heat needed by individual customers. U.S.-based Westinghouse Electric, majority owned by Japan's Toshiba Corp, South African utility Eskom and the Industrial Development Corporation have so far invested some 7 billion rand to test and develop the technology since 1999. "The funding for the reactor will be by a consortium... it will be a mix of government, private investors, customers interested in this technology and PBMR investors," Kriek said. He said several countries from the Americas, Asia and Europe have expressed interest in the project. He also saw keen interest from companies active in Canada's oil sands projects requiring high temperatures for their operations. Kriek said that while China, which is developing the same technology and is planning to have its first test plant up and running by 2013, would be the pioneer, he saw vast opportunities to market PBMR and sell the technology within Africa and beyond. He said China, which has a large internal power demand, was unlikely to export the technology unlike South Africa. He said PBMR was also in talks with Westinghouse and France's Areva to become their local partner to develop the country's next large nuclear reactor. Hogan said South Africa needs a local nuclear industry to boost exports of the country's products and skills, as well as ease pressure on the country's balance of payments. "Government is gung-ho about localisation... we cannot as a country afford importing product and skills that we could be producing in the country," she said. "The balance of payments has always been the Achilles' heal in our economy... we need to grow our exports (and) PBMR is ideally suited for that kind of requirement." | 
