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AsiaElec GENERATION AsiaElec

He said: “This will increase crude oil process- expanding its gas pipeline infrastructure to meet
ing capacity from 1mn barrels per day to 1.9mn rising residential and power generation demand.
bpd.” Moreover, the network will also be expanded to
The government also wants gas to account for supply remote islands in the country’s east.™
24% of the national energy mix by 2050 and is

COAL-FIRED GENERATION

Chinese investors withdraw from

Kenya’s Lamu coal project

CHINA THE Industrial and Commercial Bank of China Kenya Power said in its annual report this
(ICBC) has decided not to finance the proposed week that output at the country’s fossil fuel-fired
1,050-MW Lamu coal plant in Kenya. thermal power plants (TPPs) fell 44% in the year
The ICBC had originally indicated a willing- to June 2019 as generation at the Lake Turkana
ness to provide $1.2bn of the proposed $2bn cost wind power project ramped up.
of the plant. The results also noted that although thermal
The project stirred local and international power generation had shrunk by 44%, the fossil
opposition due to the social and environmental fuel cost in the power system had dropped by
impact on local residents and the World Herit- only 22%.
age-listed Old Lamu Town. This pressure from fossil fuel prices on tariffs
The proposed plant has been in trouble for will only get worse if the proposed Lamu coal-
some time after a June 2019 court ruling over- fired power project is constructed, the Institute
turned the environmental permit for the plant. for Energy Economics and Financial Analysis’
In September, General Electric – which had (IEEFA) Simon Nicholas warned earlier this
been part of the financing and construction con- month.
sortium for the project – announced it would A key rationale for the Lamu project was the
not be involved in new coal projects but did not need to replace expensive diesel-fired power.
specifically rule out further involvement in the However, it is clear that new wind and solar
Lamu project. plants are replacing diesel at a much lower cost,
The African Development Bank (AfDB) has Nicholas argued.
already withdrawn from the $2bn, 1,050-MW Previous IEEFA research has warned that the
Lamu project. Lamu project would lead to higher power tariffs
The co-ordinator of Save Lamu, Khadija for Kenyan consumers.
Shekuwe, welcomed ICBC’s decision but said Lamu also poses a capacity risk, with Kenya
“we want the project not just suspended, but Power recently having raised concerns that too
cancelled entirely.” much new power capacity has been approved,
The news comes as the price of fossil fuels is with almost 2,000 MW of new capacity antici-
rising in Kenya, while thermal output is falling as pated to come online over the next five years
more renewables capacity comes online. despite “lagging demand for electricity”.™

Week 46 18•November•2020 www. NEWSBASE .com P7