Coal in Kenya: Necessary evil or expensive error?

Monday July 8 2019

Environmental activists demonstrate in Nairobi against the construction of a coal plant.

Environmental activists demonstrate in Nairobi against the construction of a coal plant. PHOTO | FILE | NATION MEDIA GROUP 

NJIRAINI MUCHIRA
By NJIRAINI MUCHIRA
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“This judgment has brought a lot of happiness for the people of Lamu,” Mohammed Athman, board member of the Save Lamu lobby, summed up the June 25 ruling by Kenya’s National Environment Tribunal (NET) that revoked the licence granted to Amu Power Company to build a coal power plant in Lamu on the Kenyan coast.

The ruling came just days after a group of activists congregating around the deCOALinise movement held demonstrations in the streets of Nairobi opposing the plant and presented a petition to Ministry of Energy and the Chinese Embassy.

Omar Elmawi, deCOALonise campaign co-ordinator, said that there is no need to build centralised dirty sources of energy such as coal to answer to Kenya’s energy demands, “especially when the country is taking the lead in Africa with an 85 per cent renewable energy base.”

THREATS

With the setback to the Lamu project, there are doubts about the vast deposits in Kitui County in the southeast lowlands, as the opposition to dirty fuels gains momentum.

Threats of global warming and related greenhouse gas emissions have prompted countries, including the US, China and India, to start scaling down electricity generation from coal, which is the most carbon-intensive fossil fuel.

Ironically, the US government has been supporting the Lamu project, where American giant General Electric has pumped money with a promised of ensuring clean coal. US ambassador Kyle McCarter went on Twitter to argue in a string of tweets that coal is environmentally sound, that the plant would boost the country’s economy and that a critical analysis of the plant from a clean energy think tank amounted only to the work of “highly paid protestors.”

“Coal is the cleanest and least costly option,” Mr McCarter wrote from his official Twitter account. “Investors will come.”

It’s unclear what lobbying — if any — Mr McCarter could have engaged in behind the scenes to promote the coal-fired power plant, but the voice of the US government carries weight.

The Intergovernmental Panel on Climate Change is pushing the world to reduce electricity generation from coal by two-thirds by 2030, and a near-total phasing out by 2050, to limit warming to 1.5 degrees Celsius above pre-industrial levels.

In the Kenyan ruling, the tribunal was categorical that Amu Power had failed to undertake a conclusive environment and social impact assessment (ESIA) on the impact of the planned 1,050MW plant on the Lamu ecosystem, which is recognised as a Unesco World Heritage Site. The tribunal also castigated the National Environmental Management

SETBACK

Authority (Nema) for issuing the licence despite the fact that the ESIA was never subjected to proper and effective public participation in accordance to the law.

“The approval of the ESIA study and the consequent issue of the ESIA licence and its conditions failed to meet the requirements of the law,” ruled the tribunal.

Though the ruling sparked jubilation among environmentalists, conservationists and non-governmental organisations opposed to the controversial plant, there is still hope for the project.

Amu Power still has the opportunity to undertake a fresh ESIA.

The company is not ready to give up the project, having signed a 25-year power purchase agreement with distributor Kenya Power and Lighting company.

Cyrus Kirima, Amu Power chief operating officer told The EastAfrican that they were looking at the judgement to “see if we can implement the conditions set before making a decision on the project.”

While the forces opposed to the plant are strong and are riding on sensitive issues of human and other natural living species’ survival, the project has the backing of influential forces. The plant has the backing of China, which is bankrolling its construction while its agency Power Construction Corporation of China is providing the technology, equipment and expertise.

Kenya says it is critical in meeting the country’s needs for cheap, accessible and reliable electricity. In May 2017, President Uhuru Kenyatta witnessed the signing of the $2 billion financing deal by the Industrial Commercial Bank of China in Beijing.

INTERESTS

Also fronting the project is the US conglomerate GE, which has invested $400 million for a 20 per cent stake and is providing technology that it says is efficient with the least possible environmental impact.

Locally, Centum Investments and Gulf Energy are among the key investors.

In the wake of the ruling, GE has opted to play safe, stating that it remains committed to supporting Amu Power and the Kenyan government on the project which will use the most efficient steam power technology in operation today ensuring that the plant meets global and Kenya’s environmental standards.

“At GE we respect the choices that countries make regarding their energy mix and fuel sources. Once countries have chosen the fuel that best meets their energy, cost and sustainability needs, we are pleased to support them with the most efficient technology that has the least possible environmental impact,” a GE spokesperson told The EastAfrican.

Amid the controversies, commercial and other interests, the question in the minds of many is what exactly is at stake and which is the better evil for Kenya: Abandoning or pursuing the project.

By all accounts, all odds seem to be against the plant. When it was conceived in 2015, Kenya was pursing an ambitious plan to add 5,000MW to the grid and the plant was marketed as ideal in that it would contribute 1,050MW of cheap power at $7.5 cents per kilowatt hour.

The shelving of the plan and refocusing energy investments to green alternatives like geothermal, wind and solar has seen the coal plant become a baggage the country could do without.

In fact, with Kenya grappling with excess capacity, the reality has dawned on the stakeholders that building the plant might not translate into cheap electricity but could end up as a “costly error,” going by a research by the Institute for Energy Economics and Financial Analysis (IEFA).

“Building the proposed Lamu coal plant would be a costly error for the country, locking it into a 25-year PPA that would force electricity consumers to pay more than $9 billion, even if Lamu doesn’t generate any power, as long as it is available for dispatch,” said IEFA in a report.

COST OF AGREEMENT

It added the existing PPA would force Kenya to pay at least $360 million in annual capacity charges, even if no power is generated at the plant.

The government, in its Updated Least Cost Power Development Plan 2017-2037, has also admitted that building the plant will result in excess power, going by the current demand of 8.5 per cent per annum.

The loud voices across the globe against coal, which is the number one source of air pollution worldwide and had adverse effects on people’s health, pollutes water resources and contributes to the climate change crisis, has even forced development partners to develop coal feet in supporting the project.

Mid last year, US legislators petitioned the African Development Bank (AfDB) not to offer the risk guarantee for the project, arguing that it will emit as much as 8.8 megatonnes of carbon dioxide per year. The AfDB seems to have heeded the growing opposition and as a proponent of clean sources of energy and committed to environmental conservation, it has remained cagey on the guarantee.

For Lamu County, where the Lamu Port-South Sudan-Ethiopia-Transport (Lapsset) corridor begins, the consensus is largely that the coal plant will be a disaster for the Unesco World Heritage Site.

The county, covering an area of 6,273km² with a population of 112,252 people, cannot afford an influx of people and the mushrooming of uncontrolled economic activities that will sprout as a result of the plant.

PARADISE

To many people, Lamu is a paradise that has opted to cling to traditions dating back centuries while its rich biodiversity is something to marvel.

The archipelago known for its Lamu Old Town, the oldest and best-preserved Swahili settlement in East Africa — blending African, Arab, and Indian traditions — and where donkeys are the preferred mode of transport, is a major tourist attraction particularly, during the annual Lamu Cultural Festival.

Most earn a living from farming and fishing, and have committed to preserve the biodiversity of coral reefs, mangrove forests and marine life.

Mohamed Mbwana of Save Lamu reckons that building the coal plant will wipe out all the beautiful things about Lamu.

“Our cultural heritage and livelihoods are threatened. The Lamu coal plant will ruin tourism and Lamu Old Town, destabilising the county’s economy and the environment,” he said.

While the jury is still out about the fate the coal plant, across the globe countries have embarked on phasing out the dirty fossil fuel.

Germany has announced plans to shut down all of its coal-fired power plants by 2038 while the US, Japan and India have developed programmes to cut down on coal.

China, world’s biggest emitter of greenhouse gases, has steadily reduced the share of coal in the energy mix from 64 per cent in 2015 to 59 per cent currently.