After billions of shillings spent, Kenya’s nuclear power dream in doubt

After an 11-year wait, billions of shillings spent and an immeasurable amount hope sold to Kenyans, Kenya is as far as it has ever been from producing nuclear electricity, with its dream now increasingly hanging by a thin thread.

But this fading dream had noble origins.

In 2010, the economy was doing well and recorded a Gross Domestic Product (GDP) growth rate of 8.1 per cent, the highest Kenya has seen in over 20 years.

As such, President Mwai Kibaki’s administration expected the economic boom to see accelerated manufacturing activities coupled with accelerated connection of more households to the national grid underlining need for cheaper, reliable and clean electricity.

It is at this time that Kibaki’s administration’s National Economic and Social Council (NESC) recommended adoption of nuclear power to meet the growing electricity demand.

Therefore, in November 2010, the Nuclear Electricity Project Committee (NEPC) was formed to steer this dream before it was later changed to the Kenya Nuclear Electricity Board (KNEB) through a gazette notice in November 2012.

The entity was charged with fast tracking the nuclear power program with a 15-year timeline.

KNEB was later made a State corporation, the Nuclear Power and Energy Agency (NuPEA), through the Energy Act, 2019 with expanded mandate including carrying out research and development and capacity building in the energy and petroleum sectors.

But more than 10 years later, demand for electricity has not grown as expected, Kenya is producing excess electricity way above demand, and despite millions of shillings being allocated to NuPEA each year, the country is still decades away from achieving its nuclear power dream.

Kenya’s peak power demand still hover below 2,000MW which is comfortably met by existing energy sources.

Instead, NuPEA was allocated Sh509.98 million and Sh537.7 million by the National Treasury for the financial years 2018/19 and 2017/18 respectively.

But over half of these monies were spent by the agency on paying salaries, wages and allowances, with other resources used for conducting environmental impact studies of the proposed nuclear power plants, developing nuclear policies, assessing ideal location for the nuclear plants and training its workers.

To underline how the nuclear program would cost taxpayers, NuPEA, in its five-year Strategic Plan between 2020 and 2025, says it needs Sh19.7 billion to implement its activities in addition to Sh5.2 billion for recurrent spending on worker salaries, wages, maintenance and operations.

“The required financial resources for the implementation of this Plan will largely be drawn from the government. Thus, the Agency will lobby the government for allocation of the required resources,” it says in the plan.

This as the official 2020-2040 least cost power development plan (LCPDP) shows it is unlikely that Kenya will go into nuclear power production in the foreseeable future, putting into question its feasibility.

Kenya is planning to start the program with two 600MW and 1,000MW nuclear power plants.

The plan also shows the cost of this power would be multiple times those of other existing power sources, raising questions on its cost-effectiveness.

For instance, the fixed annual cost of electricity from the nuclear plants would be $0.1779 per unit (Sh19.87/kWh), which is multiple times the cost per unit of geothermal and wind, which cost an average of Sh10.27 and Sh4.91 per unit respectively.

But now, NuPEA’s days could be numbered after the Presidential Taskforce on Review of Power Purchase Agreements (PPAs) has recommended it be closed as parts of proposals to clean up the energy sector.

The John Ngumi-led taskforce, in its report to President Uhuru Kenyatta, noted that the entity is not necessary at all and that its functions can easily be carried out by the existing parastatals under the Ministry of Energy.

“A separate entity to promote and implement a nuclear program in Kenya is therefore not necessary at this point, and this high level non generation role could be played by MoE (Ministry of Energy). The Taskforce established that the scope of NuPEA’s mandate involves aspects not related to nuclear energy such as research in other forms of energy and capacity building in other utilities,” it said. 

Culling the State entity would save taxpayers at least Sh500 million annually that it is allocated by Treasury. 

“The envisaged role, which is not nuclear related, can be performed efficiently by the respective entities. The cost implication of running NuPEA as a distinct entity cannot be justified,” the report said.

Some of the recommendations by the taskforce have begun effect, following the purge of 59 workers in Kenya Power’s procurement team to pave way for a forensic audit into their lifestyle and dealings of the division.

The taskforce recommended all employees in the company’s procurement division to be replaced after being placed at the centre of corruption allegations including purchase of substandard equipment and sub-contracting of unqualified and registered firms for crucial big-money tenders.

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