Lamu Coal Power Plant

Lamu coal power plant, a 1,050MW thermal power project proposed to be built near the historic fishing town Lamu, will be the first coal-fired power facility in Kenya.

The project faces uncertainty as it struggles with legal battle for environmental issues, before its construction could take-off. If built, Lamu will be the biggest independent power producer (IPP) project in East and Central Africa region.

Estimated to cost £1.5bn ($2bn), the Lamu power plant is planned to be developed on a build, operate and transfer (BOT) basis by Amu Power Company (APCL), which won the tender to produce electricity at a tariff of US Cents 7.81/kWh for a period of 20 years, in 2014.

APCL is a special purpose consortium of Oman’s Gulf Energy, East Africa’s leading investment company Centum, and three Chinese companies including China Huadian, Sichuan No 3 Power Construction, and Sichuan Electric Power Design and Consulting.

APCL entered a clean coal technology agreement with GE in May 2018, under which GE agreed to provide major equipment and acquire equity stake in the project, in return.

Lamu power project background

Lamu coal power plant was proposed by the Government of Kenya in 2013. Construction on the project was expected to be started in December 2015, but delayed due to environmentalists’ opposition on Kenya’s Energy Regulatory Commission (ERC) issuing energy generation license for the project.

The project finally received environmental approval from Kenya’s National Environment Management Authority (NEMA) in September 2016, while the ERC granted development license for the project in February 2017.

The controversial project, however, continues to suffer delays due to environmental protests and legal hurdles.

Controversy surrounding the Lamu coal-fired power project

The National Environmental Tribunal (NET) of Kenya blocked the construction of Lamu coal power station in a ruling in June 2019. The court ruled that the NEMA didn’t conduct the environmental assessment thoroughly and local stakeholders were not adequately consulted for the project.

The ruling came in response to the allegations that the project would not only adversely impact the locals, animals, and the marine habitat in the region, but also cause damage to farmland and the local fish industry.

The court has mandated NEMA to undertake a new environmental impact assessment for the project and to ensure proper public participation.

It is also alleged that Kenya, which is already producing surplus electricity with renewable sources accounting for more than 65% of the country’s total electricity generation, doesn’t require a power plant to burn imported coal and increase greenhouse gas emissions.

Lamu power plant location and make-up

The Lamu power plant is planned to be developed on a 975 acre-site in the Kwasasi area of Lamu County, a UNESCO World Heritage site located on the northern coast of Kenya.

The plant will consist of three ultra-super-critical coal-based generating units of 350MW each.

Each unit will comprise an ultra-super-critical pulverised coal-fired boiler, a steam turbine, and air quality control systems from GE, along with a 350MW steam turbine with a back-start diesel generator.

The plant will feature a 210m-high flue gas stack and will be fitted with flue gas desulphurisation (FGD) system and electrostatic precipitators for controlling emissions. The plant will utilise once-through sea water cooling system.

Other infrastructure facilities will include an on-site switchyard, seawater desalination facilities, a 15-km-long coal conveyor system connecting a coal unloading berth in Kililana, two coal storage yards comprising four stockpiles of 420,000t of total capacity, and a 1270mx900m ash yard.

Power offtake and transmission

Kenya Power and Lightning Company (KPLC) will offtake the power generated by the Lamu coal-fired power plant under a long-term power purchase agreement (PPA) signed in August 2017.

The electricity generated by the plant will be stepped-up to 400kV at the on-site substation and transmitted through a 520km-long double-circuit transmission line connecting the Kenya Power Nairobi Control Center (NCC).

Kenya Electricity Transmission (KETRACO) will be responsible for the construction of the new substation as well as the transmission line for the project.

Coal supply

The Lamu power plant is estimated to use up to 3.6 million tonnes (Mt) of coal a year, which is planned to be imported from South Africa and Mozambique. The project has also the option to import coal from Indonesia and Australia.

Financing

The power plant is proposed to be built with Chinese financial support alongside the £20bn ($25bn) Lamu Port South Sudan Ethiopia Transport (LAPSSET) corridor project, which is being developed as part of China’s Belt and Road Initiative (BRI).

Amu Power secured a $1.2bn loan commitment from the Industrial Commercial Bank of China (ICBC). African Development Bank (AfDB) is the other potential lender for the project.

Contractors involved in Lamu coal power plant

Power Construction Company of China (POWERCHINA) was awarded the engineering, procurement, and construction (EPC) contract for the project in July 2015.

GE will design, manufacture, and supply the boilers, turbines, and air quality controls systems for the plant, under an agreement signed in May 2018.

Kurrent Technologies prepared the environmental impact study report for the Lamu coal power station.