Suitors line up to walk Kenya down controversial path to nuclear energy

Kenya is on a delicate journey that will see it switch on its first nuclear power plant by 2027. The country plans to put up four nuclear plants in the long term, each generating 1,000 megawatts (MW) of electricity.

Initial estimates show it will cost between Sh400 billion and Sh500 billion to put up one nuclear reactor. This means one plant will cost slightly more than building the 609-kilometre Mombasa to Nairobi Standard Gauge Railway (SGR).

By the time the plan is complete, the country will have spent about Sh2 trillion – just under the national Budget for a year – to reap the benefits of an additional 4,000MW of energy plugged into the national grid.

Besides the financing headache, the second test for the 10-year dream being championed by the Kenya Nuclear Energy Board (KNEB) is coming up with a location to for the reactors.

The board estimates site selection will cost the country Sh1.5 billion in a three-year process.

Though the potential sites have remained a closely guarded secret, the power plant will be built next to any of the four biggest water bodies in the country – that is, the Indian Ocean, Lake Victoria, River Tana and Lake Turkana.

“Picking the site is a long process that takes between two to three years. Population density, proximity to a hospital and the tectonic characteristics of a place are some of the factors to be considered before the decision is made,” Collins Juma, KNEB’s acting chief executive, said.

Courting Kenya

Mr Juma said the board started by eliminating unsuitable sites, like the Rift Valley and those far from water bodies. This reduced the potential sites to 10. He added that the location should be known by the end of next year.

Insiders told Business Beat that Kilifi and Kwale are some the strategic sites KNEB was considering, as it would be a logistical nightmare to put up the plants anywhere else in the country.

It is also understood that the board is keeping the market guessing because announcing a location before plans are finalised may hand land speculators a fortune.

“We do not want to cause any unnecessary public anxiety. There are those who will want it near and there are those who will not want anything near their backyard,” Juma said.

Experts in the sector say the location will depend on the site size requirements, boundary conditions, population and the environment.

These plans have excited sellers of nuclear reactors who are now courting the country, with some dangling ‘free training’.

The potential suppliers include South Korea, whose companies are constructing nuclear power plants in the United Arab Emirates. Kenya has also been window shopping in China, and with Rosatom in Russia and Westinghouse in the United States.

The country’s plans appear modelled on the UAE’s, which awarded a South Korean consortium to build four plants at a cost of Sh2 trillion.

All four UAE nuclear units are already under construction. The first is more than 85 per cent complete and is expected on line in 2017.

Kenya has already signed a memorandum of understanding with China, South Korea, Russia and Ghana.

KNEB said the deal with China would help Kenya “obtain expertise through training and skills development, technical support in areas such as site selection for Kenya’s nuclear power plants, and feasibility studies”.

China has been offering ‘free’ training and feasibility studies for big infrastructure projects in Africa as a strategy to get into the boardrooms where key decisions are made. This is the same approach it used to land the SGR deal.

“The focus of the MoUs is capacity building and technical support in upfront activities for Kenya’s nuclear power programme,” the board said.

The country has also signed nuclear power co-operation agreements with Slovakia and South Korea.

“The Koreans were here in the country two weeks ago, but we shall know how much it will cost us after we choose the site and technology,” Juma said.

He added that the Sh500 billion cost per plant for UAE may be cheaper because South Koreans were trying to get into the market.

France is also lining up for a piece of the action, with the country offering Kenya technical, engineering and financial support to develop reactors.

MAKING THE CASE

Juma has defended the cost of the project on the grounds that in the long run, nuclear energy is a cheaper and more stable source of power, with sustainable base loads.

The board is looking at having flexible financing options, including public-private partnership where a private developer will finance the plant, construct and operate it for some time to recoup investments and make a profit, before handing it over to the State.

The agency is looking at plants that will have a lifespan of up to 80 years.

It estimates that nuclear electricity costs will be between Sh8 and Sh10 per unit ($0.08 and $0.10), the same range as geothermal energy. This, according to the board, will favour both investors and consumers based on the long lifespan.

“No country has ever industrialised without nuclear energy or coal. Geothermal is good, but it is limited,” Juma said.

KNEB has been marketing nuclear energy as a powerful and efficient alternative to current energy sources.

It is also comparatively more stable and is by far the most concentrated form of energy. The other selling point for nuclear is the fact that it is also a clean source of energy, with low greenhouse gas emission rates.

It is also inexhaustible and can guarantee continuous supply since uranium, one of the main raw materials for nuclear energy, is abundant in the earth’s crust.

KNEB says a nuclear power plant can run for up to 24 months without interruption, produces power day and night, and is not dependent on the weather.

It argues that there are only three major accidents that have occurred in over 16,000 cumulative reactor-years of commercial nuclear power operation in 33 countries.

But it will have a difficult task of convincing local communities that the country is ready to deal with the radiological effects of nuclear.

The other headache that must be tackled is the development of national strategies for radioactive waste management, emergency preparedness and the nuclear fuel cycle.

Kenya will be looking to join South Africa, which is the only country on the continent that has nuclear energy. South Africa has two nuclear reactors that produce 900MW.

The country is planning to construct another reactor, with site selection already in place and requests for proposals issued.

Kenya is not the only other African nation exploring a nuclear alternative in its energy mix.

Nigeria is targeting to generate 1,000MW by 2020 and 4,000MW by 2030. The nation has signed various agreements with Russia for its nuclear power programme, including mining and exploration of uranium, and design, construction and operation of nuclear power plants.

Algeria hopes to commission its first nuclear power plant by 2025, having signed various agreements with Argentina, China, France and the US. The nation has operated two research reactors since the 1980s.

Egypt and Ghana are also considering the nuclear option. Egypt plans to build four nuclear power plants. It has a 1961-vintage 2MW Russian research reactor and a 22MW Argentinian research reactor partly supported by Russia and which started up in 1997.

Radioactive waste

However, energy experts from Italy and Germany last year, advised Kenya to drop plans to build nuclear reactors and instead harness its vast renewable energy resources, including geothermal, solar and wind, for power generation.

They cited massive costs for a nuclear plant, long construction periods of about 10 years and expensive decommissioning at the end of plants’ lifespan, especially disposing of hazardous radioactive waste.

Italy shut down its last nuclear plant in 1990, and citizens voted against the atomic technology in a 2011 referendum. Germany plans to pull nuclear plants off its power grid by 2022 in favour of green energy.

But KNEB has insisted that it will not shelve its plans, arguing that the nuclear power plants were well thought-out in 2010.

The board argues that the economy would need at least 18,000MW to support the drive to industrialise by 2030. It adds that studies by the Ministry of Energy indicate the country’s maximum geothermal energy potential is 10,000MW.

The country also has little room to expand its hydropower generation capacity, while wind and solar energy sources cannot serve as base loads as they are weather-dependent.

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