Lamu’s Sh22 billion Coal Power Plant Construction to Begin in July – is It Worth It?

Kenya Electricity Transmission Company (Ketraco) will, in July 2018 begin the construction of Lamu’s coal-fired plant, a high-voltage power line, subject to Treasury agreeing on funding terms with Chinese lenders.

“The project will cost approximately 22.28 billion shillings and is expected to be finished by mid-2021. It will run for 520 kilometers,” said Fernandes Barasa, Ketraco’s managing director.

Some of the funds, about 4.5 billion shillings will be used to cover compensation costs for wayleaves, he added.

The high-voltage power line is expected to dispense a total of 960 megawatts (MW) of power from the proposed 1,050MW coal-fired plant from Lamu to Nairobi through Kitui.

The initial plan was to start the construction of the 202.52-billion-shilling plan in September 2015. However, the implementation was delayed by perpetual controversies, including environmental concerns and compensation disputes.

According to Mr. Barasa, the government-owned transmission system operator was, however, pushing ahead with the building of the line to avoid a repeat of costly delays experienced due to the delayed evacuation of power from the 310MW Lake Turkana Wind Power farm.

The move comes at a time when the country has been experiencing occasional power shortage. For all intents and purpose, the project will do good, however, there is a risk that the Lamu coal plant could become a financial liability sooner than 2050, perhaps much sooner.

Coal-fired electricity was the engine of economic growth in the 20th century, but it had its reasons. In the 21^st century, that might not be the case. Technology has changed. For one, Kenya has abundant alternative sources of energy like solar, geothermal, and other energy resources that, thanks to technological and financial innovations, are now cheaper than coal.

Owing to the climate change, prices of coal will only increase in the coming years while innovation is driving the price of renewables down. The renewable sources – solar, geothermal, and wind – compared to coal, have lower total costs, less long-term risk, and greater potential to power Kenya’s sustainable economic development.

Others, will, therefore, note that Kenya has better alternatives and the amount used for the projects could be directed to other developmental sectors. That said, it somehow doesn’t make sense.