For Lamu coal plant, it’s hurdle after hurdle; now, US opposes plan

Monday June 11 2018

Activists protest against the construction of a coal power plant in Lamu on Kenya’s Coast on June 5. 2018. PHOTO | JEFF ANGOTE | NATION


Kenya’s plan to put up a $2 billion coal-fired electricity generation plant in Lamu County on Kenya’s Coast continued to face hurdles last week, as US Senators moved to block it from receiving funding from the African Development Bank (AfDB). The senators argue that it would emit millions of tonnes of carbon annually.

In a letter seen by The EastAfrican, four senators, Jeffrey Merkley, Brian Schatz, Bernard Sanders and Edward Markey, urged the AfDB not to fund the “financially unsound” project whose implementation, they said, would tarnish Kenya’s reputation as a leader in clean energy and worsen environmental quality.

“Kenya has emerged as an undisputed leader in clean and renewable energy in Africa, with the overwhelming majority of the country’s electricity currently coming from renewable resources,’” the legislators said.

“Instead of financing projects that would produce a profoundly negative environmental impact, the AfDB should consider projects that tap into Kenya’s tremendous renewable and low-cost resources.”

Health impact

The letter, addressed to AfDB’s executive director Tarik Al-Tashani, notes that the proposed 1,050MW coal-fired plant would emit 8.8 megatonnes of carbondioxide every year, resulting in detrimental health impact due to the high levels of air, water and soil pollution.


They add that the plant would be counter productive to the country’s climate goals and commitment including the Paris Climate Change Accord, of which Kenya is a signatory.

Kenya has been courting the multilateral development lender to finance the project to the tune of $100 million as well as guarantees of a similar amount for the construction of the power plant, translating into about 10 per cent of the total cost of the project.

The US senators also raised concerns over the excess power capacity resulting from the project, which experts estimate will cost the government at least $360 million per year in fixed annual capacity payments irrespective of whether the electricity is ever used.

According to the Energy Regulatory Commission (ERC), Kenya’s peak demand currently stands at about 1,770 MW against the country’s total installed capacity of 2,336MW, leaving a reserve margin of about 566MW.

On Tuesday, the ERC admitted that the plant would indeed generate “excess power,” which would be an unnecessary cost for the country, adding that it had instructed the developers of the project to reduce the capacity by half through phased cuts from 350MW to 150-200MW per phase.

“We don’t want to put in too much power,” said ERC director of economic regulation Frederick Nyang.

The regulator, however, later retracted initial statements about the possibility of Kenyan taxpayers paying for excess power, saying the decision to construct the plant was a result of a carefully thought-out plan.

“There has been no review of the terms and conditions under which the Amu coal power plant was approved and licensed. The sizing of the power plant is 327MW in three units, which is what is approved in the power purchase agreement,” the ERC said in a statement on Wednesday.

Reliable power for SGR

Kenya aims to generate about 1,050MW from the plant to provide reliable power for the standard gauge railway, which is to be upgraded to include an electric component by 2021.

It is also expected to power the proposed $15 billion Lamu Port-Southern Sudan-Ethiopia Transport (Lapsset) project and complement other power sources amid growing household and industrial demand.

But the plant has faced strong objection from local people and environmental activists, which have caused delays in its construction, initially scheduled to begin in September 2015.

Last month, American energy firm General Electric was offered a 20 per cent stake in the project for $400 million in a deal that would see it design, manufacture and supply plant machinery including a boiler, steam turbine generator and air quality control systems for the plant.
Amu Power Company Ltd, the company that will own and operate the plant, said the strategic entry of the American firm was meant to counter the mounting opposition to the plant and dispel fears of environmental destruction.
“GE is at the heart of Amu Power and its latest technology will address concerns raised by local residents on pollution while enabling us to efficiently produce power with the least downtimes,” said Amu managing director  Francis Njogu.

However, on World Environmental Day on Tuesday, protests against the project resumed as activists took to the streets of Nairobi demanding that the construction of the plant be stopped as it will have a devastating effect on the environment and health of the local population.

“We want to send this message to the President of the Republic of Kenya: That we say ‘no’ to coal. Coal is poisonous. Coal kills. We cannot allow this project to proceed,” said Khalid Hussein of the national human rights group Haki Africa.