Nu­clear power for the con­ti­nent doesn’t make sense

The East African - - BUSINESS - HARTMUT WINKLER

Over the past few years, re­ports have sur­faced of a range of African coun­tries plan­ning nu­clear power plants.

At the mo­ment, the only nu­clear plant in oper­a­tion on the con­ti­nent is South Africa’s Koe­berg, pro­duc­ing 1.86GW of power. This, ac­cord­ing to some African lead­ers, is about to change.

Ugan­dan Pres­i­dent Yow­eri Mu­sev­eni re­cently an­nounced that his coun­try is plan­ning 30GW of nu­clear power by 2026. That equates to 16 times the cur­rent total of nu­clear en­ergy on the en­tire African con­ti­nent.

Uganda is only one of a num­ber of coun­tries in­ter­ested in nu­clear power. Rus­sia’s nu­clear agency Rosatom has con­cluded nu­clear power mem­o­randa of un­der­stand­ing with Egypt, Kenya, Nige­ria, Su­dan and Zam­bia. Uganda is also on the list.

Most African coun­tries suf­fer from se­vere elec­tric­ity short­ages. The ma­jor­ity need to dou­ble their gen­er­at­ing ca­pac­ity to meet cur­rent needs.

Ac­cord­ing to In­ter­na­tional En­ergy Agency fig­ures, Kenya, Su­dan and Zam­bia are pri­mar­ily de­pen­dent on hy­dro­elec­tric power. A 2.4GW nu­clear plant would dou­ble their elec­tric­ity pro­duc­tion. Nige­ria’s dom­i­nant en­ergy source is gas, and here it would take a 4.8GW nu­clear plant to dou­ble its ca­pac­ity.

Of the coun­tries with Rosatom agree­ments, only Egypt has any con­crete plans in place. A site for a 4.8GW nu­clear plant has been iden­ti­fied at El Dabaa, on the Mediter­ranean Sea, and build­ing is un­der­stood to be im­mi­nent. In the other coun­tries, the lo­ca­tion and scale of the projects have yet to be de­ter­mined.

Else­where in the world, coun­tries like Ger­many, Bel­gium and the US are down­scal­ing their nu­clear plans or ex­it­ing al­to­gether. The rea­sons in­clude per­cep­tions of in­creased risk fol­low­ing the 2011 Fukushima dis­as­ter in Ja­pan — when a ma­jor earth­quake, disabled the power sup­ply and cool­ing of three re­ac­tors, caus­ing a dev­as­tat­ing nu­clear ac­ci­dent — as well as eco­nomic fac­tors.

Cheaper power

The cost of elec­tric­ity gen­er­a­tion from so­lar pho­to­voltaic and wind tech­nolo­gies has come down dra­mat­i­cally. It al­ready costs less than power pro­duced by nu­clear plants and re­new­able en­ergy is set to be­come even cheaper.

Given that South Africa has shelved its nu­clear plans on af­ford­abil­ity grounds, surely less re­sourced African coun­tries would find in­vest­ments like these even more dif­fi­cult.

Nu­clear power agree­ments are no­to­ri­ously shrouded in se­crecy. But it is pos­si­ble to get a sense of Rosatom’s plans for African nu­clear con­tracts

by ex­am­in­ing re­cent ex­am­ples where de­tails of mu­tual com­mit­ments have be­come pub­lic.

A deal struck with Bangladesh pro­vides a use­ful bench­mark against which to un­der­stand other deals that have been done with Rus­sia. In the case of the 2.4GW Roop­pur nu­clear plant, Rosatom is pro­vid­ing most of a $12.65 bil­lion loan. This only cov­ers the es­ti­mated con­struc­tion costs. In­ter­est ac­crual, pos­si­ble cost over­runs, op­er­a­tions and de­com­mis­sion­ing are likely to amount to more than dou­ble of this ini­tial out­lay. That makes a total cost of roughly $30 bil­lion likely.

Egypt’s El Dabaa project has a sim­i­lar fund­ing ar­range­ment. Here, Rosatom has given a loan of $25 bil­lion, which again is pro­jected to cover only con­struc­tion.

For both Roop­pur and El Dabaa, the an­nual in­ter­est for their loan is around three per cent. In ad­di­tion, the loan is struc­tured in a way that en­sures re­pay­ments only start 10-13 years af­ter the loan is made, to con­tinue in an­nual in­stal­ments for 22-28 years there­after.

Debt bur­den

The coun­try re­ceiv­ing the nu­clear plant ini­tially pays very lit­tle, but when the re­pay­ments kick in, it is sud­denly faced with a mas­sive bur­den that most African economies will never be able to meet. By then the three per cent an­nual in­ter­est could have in­creased the amount owed by as much as 40 per cent.

The nu­clear in­dus­try also has a his­tory of cost over­runs and con­struc­tion de­lays. A coun­try may there­fore face a sit­u­a­tion where it needs to ser­vice a higher-than-ex­pected debt while be­ing un­able to re­coup funds from elec­tric­ity sales.

What is equally con­cern­ing is that the debt then places Rus­sia in a po­si­tion where it is able to ex­ert dis­pro­por­tion­ate in­flu­ence over a coun­try’s af­fairs.

Zam­bia is eye­ing a nu­clear plant on the scale of Bangladesh’s Roop­pur. The plant is ex­pected to cost $30 bil­lion. Given Zam­bia’s total an­nual bud­get is $7.2 bil­lion this is clearly un­af­ford­able. If one were to scale the Roop­pur cost from 2.4GW to the 30GW nu­clear power plants pro­posed by Pres­i­dent Mu­sev­eni, the fig­ure would be 15 times Uganda’s an­nual GDP of $24 bil­lion.

Are there cheaper al­ter­na­tives to nu­clear power to al­le­vi­ate en­ergy short­ages in Africa?

A great deal of hope was placed on the 40GW Grand Inga hy­dro­elec­tric scheme on the Congo river. But the project isn’t go­ing to come to fruition soon due to fund­ing chal­lenges.

The most promis­ing solution seems to be through mul­ti­ple small-scale power pro­duc­tion ini­tia­tives, typ­i­cally in bio-en­ergy, so­lar heaters and pho­to­voltaic mod­ules. These pro­vide cheaper elec­tric­ity than nu­clear and are in ad­di­tion good job creators. With its ex­ten­sive agri­cul­tural sec­tor, all of Africa has great biowaste en­ergy po­ten­tial.

Kenya has shown that there are ex­cel­lent geo­ther­mal en­ergy ex­trac­tion pos­si­bil­i­ties along the Rift Val­ley.

Many coun­tries, in­clud­ing Egypt and Kenya, en­joy am­ple sun­shine, mak­ing them ideal for so­lar power gen­er­a­tion. With the right in­cen­tives, these could drive an African en­ergy gen­er­a­tion boom.

When the re­pay­ments kick in, coun­tries are sud­denly faced with a mas­sive bur­den that most African economies will never be able to meet.”

Hartmut Winkler is a pro­fes­sor of Physics at the Uni­ver­sity of Jo­hann es­burg. This ar­ti­cle was first pub­lished in The Con­ver­sa­tion.

Pic­ture: File

The Tri­c­as­tin nu­clear power cen­tre in Bol­lene, south­ern France. Rus­sia’s nu­clear agency Rosatom has con­cluded nu­clear power mem­o­randa of un­der­stand­ing with Egypt, Kenya, Nige­ria, Su­dan, Zam­bia and Uganda.

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