It’s no secret that Africa’s economic development has been stifled by the shortage of electricity across the continent. The Africa Progress Report 2015 puts the annual electricity-related economic loss at 2 percent to 4 percent of GDP. In Ghana and Tanzania, electricity shortages are costing businesses 15 percent of sales.
Over 600 million people are getting restless waiting for power. South Africa alone accounts for 50 percent of sub-Saharan Africa’s current installed capacity of 9 GW. According to The Africa Progress Report 2015, at the current pace of electrification (investing $8 billion or 0.49 percent of GDP annually), the continent will achieve universal access in 2080. Declaring this unacceptable, Africa Progress Report 2015 projects Africa needs to invest $55 billion (or 3-4 percent of total GDP) annually to speed up the pace and reach universal access to electricity by 2030.
Discussions about Africa’s power options often focus on renewables, hydropower and natural gas. Diesel, heavily used for power generation across Africa, and coal, widely used in Southern Africa, are not championed in discussions with international development organizations and financiers.
To close the huge power deficit and boost their economies, Africa’s larger economies - South Africa, Kenya and Nigeria -and smaller uranium rich countries – Namibia and Niger - have decided it might be time to go nuclear. Ghana, Senegal, Uganda, and Morocco have also publicly expressed their interest in nuclear power. The International Atomic Energy Agency (IAEA) has indicated that it will help African countries cooperate in developing nuclear electricity. IAEA will advise on international best practices and standards. National governments will be responsible for regulatory oversight.
South Africa leads the way
South Africa, currently the only African country with nuclear power (2 GW), is actively planning to develop 9.6 GW by 2030 at a cost ranging from $37 billion to $100 billion. AREVA, Electricite de France, China’s Guangdong Nuclear Power and Korea Electric Power Corporation are vying for a share of this business. China and Russia have signed MOUs to develop skills and strategic partnerships. China has started training South Africans in nuclear plant operations. Related: Is The U.S. About To Break One Of Its Own Nuclear Treaties?
But South Africa’s procurement process is already facing a legal challenge. Westinghouse Electric Corp. is expected to challenge the South African utility ESKOM’s reversal of a $381 million award; giving the contract to AREVA after first announcing Westinghouse’s win. The possibility of a long legal battle does not seem to be dampening interest, however.
Recent press suggests that Russia’s state-owned Rosatom is at the forefront of the next round of awards expected to take place between late 2015 and early 2016. Industry commentators suggest that South Africa is anticipating that Russia and China will offer generous financing with their bids; outside of these two powerhouses, no one is certain who could pay for such a massive expansion. Industry observers are skeptical that either Russia or China will deliver the expected funding. Nuclear power opponents including Greenpeace are demanding transparency and argue that South Africa’s nuclear push is a waste of money, better spent on other options, e.g. renewables, to address the country’s current power shortfall.
Kenya follows fast
Kenya appears to be the most active, after South Africa, in planning its nuclear power future. It has 2.2MW in total installed grid capacity with 20 GW of geothermal potential. Estimates state that an economy of Kenya’s size should have 45GW to 55GW of installed capacity. Related: Fund Managers Have Their Own ‘Black Monday’ Thanks To The Saudis
Adding nuclear power into its fuel mix would help to close its power supply gap. Kenya projects bringing 1GW of nuclear power on line by 2025, rising to 4GW by 2033. In August 2015, the IAEA led an 11 person expert team to Nairobi to conduct an “Integrated Nuclear Infrastructure Review (INIR)”of Kenya’s progress. The Kenya Nuclear Electricity Board (KNEB) has completed two phases of the INIR; self-assessment and pre-feasibility preparedness studies.
An important outcome of the INIR is assessing Kenya’s progress towards setting up an independent nuclear power regulatory authority. China has signed up to help Kenya meet its nuclear aspirations. The two countries signed an MOU in 2015. China will help Kenya build skills and will provide technical support with site selection and feasibility studies. Slovenia and South Korea have also signed cooperation agreements as they position for upcoming deals. The first cohort of Kenyans is studying nuclear engineering in South Korea.
Nigeria raises tempo towards its nuclear goal
Nigeria will certainly miss its original target to go nuclear by 2017, but it has made progress building its institutional framework since first declaring its intent in 2007. With power sector privatization failing to meet the projected surge in power supply, Nigeria is ramping up efforts to explore its nuclear power options. It plans 1 to 2 GW of nuclear capacity and has selected two potential sites. Russia is at the forefront of this development.
According to Reuters, Rosatom, Russian state-owned nuclear company, can spend “$300 - $350 billion per year to build nuclear plants in Russia and abroad.” Rosatom and the Nigerian government signed a cooperation agreement in 2012 for the commissioning and decommissioning of nuclear facilities. Following further talks in 2015, Rosatom, according to Nigerian officials, will finance and operate the $20 billion project, which envisions a total of four plants, each valued at $5 billion. Nigeria’s plan is for the first plant to be operational in 2025. The IAEA is scheduled to conduct an INIR in Nigeria in 2015. Related: Trouble Ahead For The World’s Next Shale Boom?
A new frontier for nuclear power?
ADVERTISEMENT
With global sales of nuclear power plants flat following the Fukushima accident, it’s no wonder that Africa’s initial forays into nuclear power are generating so much interest. Governments have said little to address the safety concerns raised by industry watchdogs and citizen’s groups. Continent-watchers and industry observers remain skeptical that all this nuclear capacity will be built, as financing remains a formidable challenge.
But nuclear power is no longer off the table as Africa adopts an “all of the above” strategy regarding fuel options, as it struggles to close its power deficit. Currently, Russia appears to be willing to splash the most cash. But China and South Korea can’t be ignored and other countries are positioning to step up their efforts as Africa’s nuclear power market heats up.
By Ronke Luke for Oilprice.com
More Top Reads From Oilprice.com:
- Obama’s Fracking Regulations Take A Serious Hit
- Q4 Opens With A Rally In Oil Prices
- Alaska Facing Tough Choices Without Arctic Oil
Way to doom nuclear energy without providing a reasonable alternative. Africa needs more electricity and nuclear power is probably by far the most economically efficient method to produce energy.
Of course it would be wonderful if everyone could just use renewable energy, but millions of africans are really suffering, so just about any energy will be useful to them.