NEWS General Electric reconsiders investment in Lamu coal plant

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From The Star (Kenya), July 19, 2018.

The future of the pro­posed Lamu coal plant was cast into doubt on Wednes­day when 56 insti­tu­tion­al and indi­vid­ual investors with $713 bil­lion (Sh71.3 tril­lion) in assets under man­age­ment asked Gen­er­al Elec­tric to pull out.

In May, GE, for­mer­ly Gen­er­al Elec­tric, agreed to buy a Sh40 bil­lion stake in Amu Pow­er and to man­age and main­tain the Lamu coal plant. The GE invest­ment is how­ev­er still sub­ject to reg­u­la­to­ry, board and lender approval.

GE’s invest­ment would pri­mar­i­ly be in the form of new steam tur­bines and boil­ers for the refur­bished coal plant from Chi­na. Chi­na decom­mis­sioned over 100 coal pow­er sta­tions last year.

GE has appar­ent­ly agreed to recon­sid­er their sup­port and invest­ment in the Lamu coal plan,” said pro­fes­sor Daniel Kam­men, Direc­tor of Renew­able and Appro­pri­ate Ener­gy Lab­o­ra­to­ry at the Uni­ver­si­ty of Cal­i­for­nia, Berke­ley.

He was the Sci­ence Envoy to the US State Depart­ment under Pres­i­dent Barack Obama.

Kam­men said: “From my pub­lished analy­sis, the absurd­ly cost­ly eco­nom­ics of the Lamu coal-fired pow­er plant have been clear for years.”

That analy­sis is avail­able here from his work devel­op­ing and using the SWITCH-Kenya model.

The investor let­ter claimed that the Lamu coal plant would raise elec­tric­i­ty costs in Kenya.

This plant will affect not only Lamu but also all Kenyans as its con­struc­tion and oper­a­tion will cause an increase in elec­tric­i­ty rates for every­one,” said the investor letter.

Amu Pow­er has been mis­lead­ing­ly mar­ket­ing the price of elec­tric­i­ty from the plant as $0.078/kWh, while out­side ana­lysts cal­cu­late that the price of elec­tric­i­ty from the plant will range from $0.11 to $0.26/kWh depend­ing on the capac­i­ty factor.”

Sci­en­tists believe that the cost of coal pow­er in Kenya is dou­ble the cost of geot­her­mal power.

The let­ter to GE chief exec­u­tive John Flan­nery was sent by As You Sow pres­i­dent Danielle Fugere and Proxy Impact chief exec­u­tive Michael Pas­soff on behalf of the investors.

They said the coal plant will release tox­ic pol­lu­tion into the air and leaves behind ash that can con­t­a­m­i­nate ground­wa­ter sup­plies. They said that this is “at odds with GE’s pub­lic posi­tion­ing on cli­mate change and the company’s stat­ed sup­port of the 2015 Paris Agreement.’’

They added that tremen­dous amounts of water will be need­ed for cool­ing and hot water dis­charge will dam­age marine ecosys­tems and the liveli­hoods of fishermen.

Kam­men wel­comed GE’s sec­ond thoughts on its invest­ment in Amu Power.

This deci­sion opens the door for what Kenya real­ly needs, invest­ment and part­ner­ship to take advan­tage of the geot­her­mal, wind (on- or off-shore) ener­gy resources that are both cheap­er than coal in the long run, and pro­vide greater job cre­ation,” said Kammen.

The African Devel­op­ment Bank is report­ed­ly also reluc­tant to pro­vide a cred­it guar­an­tee for Amu Pow­er for the Lamu coal project.

Read: US Sen­a­tors ask AfDB not to finance ‘dan­ger­ous’ Lamu coal plant

The Lamu coal plant was orig­i­nal­ly con­ceived to exploit coal from the Mui basin in Ukambani.

How­ev­er, at some point, it was decid­ed that it would enter into a pur­chase agree­ment for South African coal for the next 30 years.

In 2017 in Bei­jing, Pres­i­dent Uhu­ru Keny­at­ta wit­nessed the sign­ing of the Sh205 bil­lion agree­ment between Pow­er Chi­na Resources and Gulf Ener­gy for the Lamu coal-fired pow­er plant.

Amu Pow­er is a con­sor­tium of Gulf Pow­er and Cen­tum, a Kenyan invest­ment group whose largest sin­gle share­hold­er is busi­ness­man Chris Kirubi.

Two weeks ago, activist Okiya Omtatah filed a peti­tion at the High Court seek­ing tem­po­rary orders block­ing GE from imple­ment­ing the project. He argued that the plant will not use clean coal tech­nol­o­gy as it claims.

Pro­fes­sor Kam­men and his team devel­oped and pub­lished the SWITCH-Kenya mod­el in 2017 using state of the art tech­ni­cal and eco­nom­ic data from East Africa, and have iden­ti­fied a range of clean ener­gy invest­ment oppor­tu­ni­ties in Kenya that are far cheap­er than the Amu Coal-fired pow­er plant for Lamu

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