Is this Africa’s moment to invest in atomic energy?

Faced with persistent power deficits, which have slowed down industrialisation, Africa is increasingly considering new alternatives for electricity generation, including nuclear energy.

Across the continent, dependence on sources like hydro, solar and wind has failed to increase electricity connections.

According to the World Bank, sub-Saharan Africa faces a power infrastructure deficit requiring the upwards of $90 billion annually to  enable at least 600 million people to connect to grid electricity.

East Africa has an average of 40 per cent power coverage, and this has been blamed for the  high cost of production for manufacturers as well as the high cost of consumer goods.

Ethiopia, Egypt and South Africa are increasingly becoming attractive to investors due to the relatively low cost of power there.

Although the governments of Kenya and Uganda are investing in new generation sources like geothermal, coal and natural gas, they are also considering nuclear energy as an alternative.

Already, Kenya has engaged a consultant to find a suitable site for its proposed $5 billion nuclear power plant, which is expected to produce 1GW in 2027.

Uganda is even more ambitious: it seeks to produce 4GW initially.

Reliable power

Nuclear energy is cheap, with a tariff of about 6 US cents per kilowatt compared with a high of 12 cents for thermal. Nuclear power is reliable, compared with hydro, which is prone to weather changes.

“The future of energy and base-load generation is in nuclear, and probably coal and liquefied natural gas. Kenya needs to push ahead with the nuclear agenda to meet the country’s energy needs,” said the managing director of Kenya Nuclear Electricity Board Collins Juma.

Mr Juma said that Kenya requires at least 18,000MW to become a middle-income and industrialised nation. With the total installed capacity at 2,370MW, it will need to diversify its energy sources to reach that target.

Countries in East Africa are among those on the continent seeking to build nuclear power plants driven by the need to end power challenges,   and accelerate industrial and economic growth.

Russia, China and South Korea have emerged as the key vendors of nuclear energy, offering to help in financing the deals.

The International Atomic Energy Agency (IAEA) has been at the forefront of the campaign to sell nuclear to Africa. Its deputy director-general Mikhail Chudakov told The EastAfrican that nuclear energy holds the key to industrial development.

“Africa needs to understand that solar and wind are good for home lighting [but not manufacturing],” he said.

Massive investments

But nuclear energy needs massive resources to build and operate, so state-owned companies like Russia’s Rosatom, China General Nuclear, China National Nuclear Corporation and Korea Electric Power Corporation are pushing various financing and construction models for the continent’s customers.

The companies have signed agreements and memoranda with African countries, ranging from research and development and human resources development to full reactor projects. Russia and China, in particular, have crafted packages providing state-backed loans, in the process altering the dynamics of nuclear markets.

In Egypt, for instance, Russia is providing 85 per cent of the funding for the 4,800MW plant currently under construction at a cost of $21 billion.

Russia is also pushing the build-own-operate-transfer model, where it maintains ownership of the plant and sells electricity to the host country. Rosatom is already deploying this model in Turkey.

According to Mr Juma, although Kenya is yet to decide on the financing of its plants, the models available in the market make the pursuit of a nuclear plant viable.

“The Russian model is attractive because we just need to negotiate a tariff that is reasonable enough to make the vendor recoup their investment then they come and build the plant, own it and operate it for some years, once they have recouped their investments, they transfer the plant to the government,” he said.

He added that while critics say the model is tantamount to a country ceding sovereignty to the vendor country, negotiating for a favourable tariff guarantees access to cheap electricity for years.

“For us, the bottom line should be access to cheap electricity,” he said, adding that Kenya needs the nuclear plant because the country has exhausted hydro while the total capacity for geothermal, which is also capital intensive, is 10,000 MW.

Widespread opposition

But while African governments believe nuclear offers an easy way of addressing energy needs, opposition to the technology is widespread, something that has made it difficult for most countries to achieve one of IAEA’s top conditions: A general acceptance by the wider populace.

A common national position on a nuclear plant is the topmost condition in the IAEA 19 infrastructure milestones approach for any country pursuing nuclear energy for peaceful purposes.

Opposition in African countries is informed by the fact that some Western countries like Germany have significantly downscaled generation from nuclear due to growing concerns over safety and security in the wake of the 2011 Fukushima disaster in Japan.

“African countries understand that nuclear power is a clean and good source of energy for the future. But they also understand that nuclear has some specific features that need to be prepared to construct a safe, secure and reliable nuclear plant.

“As IAEA we are glad that African countries are fulfilling their obligations and following all our recommendations because this is the path towards having a nuclear plant,” said Dr Chudakov.

Despite brakes being applied in the West, investments in nuclear reactors is on the rise, particularly in Asia and Eastern Europe.

At the end of 2016, the total number of operating reactors stood at 448, up from 441 in 2015 while currently there are a total of 61 reactors under construction, 20 of which are in China with a further 15 spread across India, Pakistan and Russia.