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Africa Nuclear investment opportunities

In the face Africa of increasing concern about human-caused climate change, there is an urgent need for a global transition to clean energy. Yet in many parts of the world, such as African countries , there is also a need for significant increases in energy consumption to improve human development. One pathway to meet these twin challenges of alleviating energy poverty and minimizing greenhouse gas emissions is nuclear energy.

Despite being home to a diverse range of energy resources - from oil and gas in the west to strong hydro-potential in more central regions - Africa still lays claim to severely underdeveloped power sectors in most of its sub-Saharan countries. Instead, the region faces a power infrastructural deficit requiring upwards of USD90 billion annually to resolve.

Taken together, the 48 countries that make up Africagenerate approximately the same amount of power as Spain, despite having a population that is 18 times larger. As of 2012, Africa 48 had a mere 83 GWe of total grid-connected generation capacity, with South Africa alone accounting for more than half of that.



Access to electricity


The International Energy Agency's Africa Energy Outlook - a Special Report in the 2014 World Energy Outlook series - indicates that some 625 million people or more in Africa do not have access to electricity, while another estimated 730 million or more Africans on the continent use dirty and potentially hazardous fuels to cook. Furthermore, average per capita residential electricity consumption was placed at 317 kWh per year. Yet despite these meagre numbers, between 1990 and 2013 only USD45.6 billion was invested in the power sector - that is, half of what is required annually. Africahas therefore found itself in a situation where its rapidly growing population, expected to reach 2.8 billion by 2060, urgently requires innovative energy solutions capable of guaranteeing a sustained growth in energy supply.

Historically, many emerging economies have turned to nuclear power to meet energy deficits, and there is immense potential for nuclear to provide a clean baseload source of energy to meet Africa's large energy deficit while also minimizing carbon emissions. Fossil fuel power plants like oil, coal, and gas not only pollute but must have a constant delivery of fuel, which can be a challenge where transportation and pipeline infrastructure is underdeveloped.

There is the argument that, since nuclear power plants (NPPs) have fewer siting constraints due to the small size and extremely dense fuel, they could be located closer to load centres to avoid the transmission costs, which could be high in African countries where there are larger distances between significant population centres. Additionally, nuclear technology could be used for other non-power uses on the continent such as desalination and industrial process heat.

High capital costs, low human capital, weak institutional quality, long times required to develop robust legal and regulatory frameworks, and proliferation concerns of nuclear fuel also serve as barriers to the adoption of nuclear technology on the continent. For these reasons, only South Africa has an operating nuclear power plant, with 1800 MWe of capacity made up of two units of pressurised water reactors. South Africa plans to expand its nuclear capacity by 9600 MWe and aims to increase the share of the country’s electricity from nuclear from 5% to 25% by 2025.

The challenges are considerable, but there is reason for optimism. Small Modular Reactors (SMRs) and advanced nuclear technologies could improve the feasibility of developing commercial nuclear power in African countries. Through smaller reactor sizes, passive safety, and simplified design, these new nuclear technologies could be easier to finance, construct, and operate.



A decade away


We find that there is significant interest in and steady progress towards commercial nuclear power in sub-Saharan African countries. Yet most countries are still a decade away at least from breaking ground on their first project. Advanced nuclear designs have the potential to mitigate some of the challenges of deployment in this region, but they are also about a decade away from first commercial demonstration. Perhaps a confluence of these two events will allow African countries to leapfrog over the large-scale, traditional light-water nuclear technologies to nuclear technology that is smaller, modular, more flexible, and overall more appropriate.

Development organisations that focus on energy issues should stay informed about the progress these countries are making on nuclear and should consider the technology in their ongoing discussions around options for increased energy access.