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IEA steps up its work on energy innovation as money flows into new energy tech companies

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Investments are leading indicators of the direction of change in the energy sector. This is particularly true for investments in innovation and digitalisation, so-called “intangible assets” that will shape the technologies for supplying and using energy in the decades to come.

Across the economy, investments in long-lasting intangible assets – including software, R&D, data, management efficiency, branding – are growing and will be among the biggest sources of future productivity. In Europe, intangible investments are rising as a share of GDP, while those in more traditional, tangible capital assets are declining. In the United States, intangibles are already in the lead according to some estimates.

The International Energy Agency brings together the best global data on energy investments in its World Energy Investment report and Tracking Clean Energy Progress web platform, including investments in innovation.

Innovative energy technologies will be crucial to tackling environmental problems associated with energy use, as well as reducing consumer costs and increasing prosperity around the world. Both the public and private sectors play central roles in driving energy innovation, with private money flowing to new commercial opportunities, supported by government-backed markets that provide direction to innovative activities and government investment in novel, risky technology areas. To deliver the goals agreed by the 23 country signatories (plus the European Commission) of Mission Innovation, understanding the trends in the spending and the strategies of the private sector will be vital.

Electric mobility is leading an energy venture capital boom

The latest data on investments in start-ups from i3 shows a booming venture capital sector globally for energy technologies. Venture capital investors provide capital to multiple small companies with new ideas about how to deploy energy technologies, often combining technologies in novel ways in the hope of disrupting existing markets and delivering huge returns within five years if one of them is successful. While venture capital generally does not fund the underlying research, it is a good indicator of where people think there is scope for new technologies to meet customers’ unsatisfied needs and unseat the existing energy order.

Venture capital investment in energy technologies is flourishing, with more money flowing in 2018 than in the first two quarters of any previous year. But whereas the previous highpoint in 2008 was led by renewables – notably solar – it is now transportation that is getting all the attention, mostly electric vehicles. To complete the switch from supply-side to demand-side technologies, funding for energy efficiency (especially related to connected-buildings technology) has been higher than for renewables so far in 2018.

As we have previously noted, several factors underpin this trend. First, innovation in clean energy hardware and venture capital are often not well matched. The timeframe needed to establish the viability of energy projects can be too long, the capital requirements for technology demonstration too high and the consumer value too low. Although there is a much more established market for solar panels today, compared to 2008, there is a still a serious need to deliver better renewable technologies to the market. Secondly, while the upswing of investments is striking, the total number of deals was actually falling until this year, when it saw an 18% increase compared to the first half of 2017. What has changed is the willingness of investors – especially in Asia – to place a small number of very large bets on electric vehicle companies, which represent the hottest part of the market today.

Energy is still far from joining the ranks of biotechnology and software as a hundred-billion-dollar venture capital market. However, by combining spillovers from rapid digital technology advances with expectations of revolution in the transport system, it is currently in a growth phase. If consumers respond favourably, some of these digital and mobility ideas could be deployed at scales of millions of units relatively quickly; at such a scale new generations would be developed each year and performance improved dramatically. But is unclear whether the excitement around, for example, batteries for electric mobility could stimulate venture capital investment in electricity storage for the grid or whether venture capital will play a significant role in energy supply technology development. Markets for stored electricity are not poised to deliver such high returns in the near term and venture capital is not usually patient.

Changes and new entrants in corporate energy innovation strategy

Corporate venture capital can take a slightly more long-term view, but still more short-term than traditional corporate R&D programmes. High levels of technological uncertainty in today’s energy sector, coupled with rising competition between firms in different regions and, increasingly, different sectors, support a shift in the patterns of corporate innovation funding.

We estimate that global corporate spending on energy R&D grew 3% in 2017, to USD 88 billion, but is still lower than it was in 2014, before the oil price slumped. Over recent decades, these budgets have become less centralised and more integrated with product development in individual business units. Many major companies devote no more than one-tenth to one-third of their total R&D budgets to new technologies, with the bulk of spending going to incremental improvements of existing technologies. Given the high expectations for fundamental changes in the energy system and uncertainty about the timing and technologies involved, firms are trying to make their research budgets work as hard as possible.

Digitalisation, in particular, enables companies to place more small bets on emerging technologies and to be open to changing direction quickly. New technologies for software and digital-based products have shorter innovation cycles and can be brought to the market quicker. They require less investment and fewer consumables, and they can be prototyped more quickly and tested in a variety of environments simultaneously and do not need costly manufacturing facilities or value chains to be deployed. The result can be a lower unit cost of innovation. But it also opens energy companies up to competition from firms with core competences in information and communication technologies (ICT).

In 2017, total investment in energy technology start-ups by corporations – i.e. companies primarily engaged in making and selling non-financial products – reached USD 6.1 billion. This was a big increase compared to 2016, and was driven largely by investments by ICT companies alongside more traditional energy sector companies, including oil and gas and utilities and automakers. As with energy venture capital in general, the overall trend underpinned by several very large deals, especially in Asia. Notable deals in 2017 included Tencent and Baidu’s investments in Tesla, NIO and WM Motors; Intel’s investment in Volocoptor electric helicopters; Qualcomm’s investment in CargoX truck logistics; and China Mobile’s investment in Ninebot electric scooters.

In some cases, the entry of firms from sectors such as ICT into parts of the energy industry is forcing companies to change their perceptions of who they should consider their competitors to be.

There are several reasons large established companies provide capital to early-stage technology companies. They might see it as a good investment on a purely financial basis, but more commonly it is seen as an investment in learning about a technology, acquiring human capital, and building a relationship with the technology owner that would smooth the path to licensing or buying the technology if it is successful. In general, this approach is used with technologies that are currently outside the core competence of the corporate investor but that could add significant value to existing businesses if the market developed in that direction. Given the value of innovation to many large energy companies, corporate venture capital (CVC) finance and even growth equity (a type of private equity investment) can cost less and involve less risk than developing a technology in-house. It can also shield the developers from the strict evaluations placed on internal R&D projects housed in existing business units. For a start-up company, a CVC investor can provide access to expertise and customers that can give it a better chance of maturing quickly.

Among oil and gas companies, a noticeable recent trend is a shift away from technology areas that complement their existing infrastructure – such as bioenergy, CCUS and fossil fuel supply technologies – and towards technologies that could complement their broader capabilities or let them explore new business areas. Utilities have also increased their funding of energy technology start-ups. Worldwide, they spent a record USD 0.7 billion in 2017, surpassing the previous high of 2013 and the tail end of the clean tech boom. Solar power, electricity storage and, to a lesser extent, smart-grid technologies have been the main focus of utility funding in recent years, but growth in 2017 was driven largely by transport technologies, which took one-half of the total, and wind power technologies, which took one-quarter.

As innovation evolves, the IEA is helping policies to adapt

A growing number of energy companies are separating the teams that are focused on innovation outside their core competences, and that could in some cases undermine their existing businesses, from the governance structures of typical corporate R&D. Rather than having large budgets for research linked to sustaining existing businesses, these teams generally pursue a wider range of innovation management activities, often with lower capital requirements. These activities include VC funding, internal innovation competitions, pilot testing of competing options and more strategic partnerships with firms outside their traditional sectors. To manage risks in highly uncertain and unfamiliar technology areas, collaboration with technology suppliers, customers or across business units tends to play a larger role than in traditional corporate R&D.

Changes to the ways that new energy technologies are developed and commercialised by the private sector can require changes in the ways that governments incentivise and track innovation. Having a strong ecosystem of research institutions and energy entrepreneurs can be more valuable than tax breaks and R&D funding for making a country attractive to a large company as a place to undertake novel projects. Absolute corporate expenditure on R&D may become less closely linked to the pace of corporate innovation in low-carbon technologies. The need to collaborate to rapidly test and scale up ideas can reduce companies’ incentives to create and defend in-house intellectual property. Policy makers may need to ensure that their national or regional policies also support the improvements to capital-intensive hardware solutions needed to tackle climate change. In these areas, patient government capital for higher-risk technologies could become even more vital.

The IEA takes this public policy challenge seriously and is strengthening its work on innovation around the world. For example, on 30 September 2018, we signed a Memorandum of Understanding with India on collaboration on clean energy innovation as part of our Clean Energy Transitions Programme. We are also enhancing collaboration with Brazil and other key partner countries. Through this programme, plus our ongoing close cooperation with Mission Innovation and our leading network of Technology Collaboration Programmes, the IEA aims to support countries to have the best data and analysis on public and private sector energy R&D at their fingertips and apply international best practice in policy making.

The commentary is based on an excerpt from World Energy Investment 2018 and interviews conducted with corporate R&D leaders in late 2017 and early 2018. Source: IEA

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East Mediterranean Gas Forum and Turkish expansion

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Image source: Greek Environment and Energy Ministry

The East Mediterranean Gas Forum (EMGF) is a unique regional organization in the eastern Mediterranean region. The establishment of the organization was announced when Turkey was seeking to expand in the Mediterranean region, as well as some eastern Mediterranean countries, such as Libya. Libya’s national security is an integral part of Egypt’s national security. In 2020, President Al-Sisi stated that: “Sirte and al-Jafra are a red line.” It is worth noting that Egypt has played an essential role in achieving a ceasefire in Libya. Egypt does not seek to interfere in Libya’s internal affairs but seeks to preserve its national security. Egypt supports the negotiations under the auspices of the United Nations and calls on all the disputing parties in Libya to negotiate and end the dispute in Libya in order to restore Libya’s stability and security. Turkish expansion in the Mediterranean causes concern to both Cyprus and Greece, as Turkey is drilling for gas near the Greek island of Crete, which has led to an escalation of tension between Turkey, Cyprus, and Greece. That led to the international community’s intervention to support Greece against the Turkish expansion, France pledged military aid to Greece, and Germany called on all parties to calm the conflict over gas in the Mediterranean. Turkey began the exploration process in 2019, and Turkey sees that it has many natural resources in the eastern Mediterranean and seeks to exploit it. However, there is still a problem of demarcating borders between Turkey and some eastern Mediterranean countries, which made the exploration process illegal. The demarcation of the borders between Libya and Turkey has led to the intensity of the conflict between Turkey and Greece. It is possible to say that Turkey did so in response to establishing the East Mediterranean Forum.

The East Mediterranean Forum is a regional organization, which includes six countries: Egypt, Greece, Cyprus, Jordan, Italy, and Israel. Its headquarters are located in Cairo, the capital of Egypt. The East Mediterranean Gas Forum organization was a forum. This forum was co-founded by Egypt, Jordan, Greece, Cyprus, Palestine, and Israel. The international community welcomed the idea of the forum. France requested to join the forum, and the United States of America attended the forum meeting as an international observer. Although Palestine is one of the founders of the East Mediterranean Gas Forum in 2019, it didn’t sign the protocol of the organization. Palestinian News and Information Agency reported that Palestine did not participate in the signing ceremony. And as a co-founding country of the forum, it will not retreat from the membership of any international organization that affirms its national and sovereign rights. The transformation of the Gas Forum into an international organization is an important and historic step in the region. It allows the countries of the region to cooperate in the eastern Mediterranean region. It’s worth mentioning that the eastern Mediterranean region includes nine countries, Egypt, Cyprus, Greece, Lebanon, Palestine, Syria, Libya, Turkey, and Israel. And now only four countries from eastern Mediterranean region joined the organization.

The forum is an economic and political organization, which its primary goal is the economic exploitation of natural gas and the interest in strengthening cooperation and developing dialogue between the states of the organization; in addition to that, the organization works to protect the wealth of its members in the eastern Mediterranean region against Turkish expansion and it also puts an end to Turkey’s illegal drilling activities in the region. As we can see, the organization attempts to reshape the balance of power in the region. Although the clear objectives of the organization, there are many challenges face it, including challenges related to the organization as an institution, such as the mechanisms of the institution, decision-making, conflict resolution, and protection of the region’s gas wealth. In addition to that, border problems between some organization members and other countries, such as the problem of borders between Palestine and Israel and the dispute over the demarcation of the maritime borders between Lebanon and Israel.

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Pakistan’s water-and-energy crisis

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The Indus Water Treaty talks between India and Pakistan had been in limbo since India abrogated special status  (Article 370) of the occupied Kashmir and usurped  hereditary rights(Article 35-A) of its permanent citizens. Following peace on the line of control, the two countries, water commissioners of the two countries held a meeting in March 2021 (though supposed to be held in 2019) to resolve outstanding issues. The main focus was on Pakistan’s objections to design of Indian hydropower projects on the Chenab River. India is building the 1,000 MW Pakal Dul Hydro Electric Project on river Marusudar, a tributary of the Chenab. The project is located in Kishtwar district of Jammu & Kashmir. The second project, Lower Kalnai, is being developed on the Chenab River.

The meeting was delayed because of India’s pugnacious attitude (surgical strikes, cartographic aggression on Kashmir, etc.).

The Indus Waters Treaty is a water-sharing treaty between India and Pakistan, facilitated by the World Bank, to use the water available in the Indus River and its tributaries. The treaty allocated the waters of the western rivers that are the Indus, Jhelum, and Chenab to Pakistan and those of the eastern rivers, namely the Ravi, Beas, and Sutlej, to India. According to provisions of the Indus Waters Treaty, all the waters of the Eastern Rivers (Sutlej, Beas, and Ravi), amounting to around 33 million acre feet (MAF) annually, is allocated to India for unrestricted use and the waters of the Western rivers (Indus, Jhelum, and Chenab) amounting to around 135 MAF annually largely to Pakistan. Under the treaty, India has been given the right to generate hydroelectricity through run-of-the-river projects on the western rivers, subject to specific criteria for design and operation.

The treaty also envisaged funding and building of dams, link canals, barrages, and tube wells like the Tarbela Dam on the Indus River and the Mangla Dam on the Jhelum River.

Since time immemorial, the Indus-river system has been used for irrigation in undivided India. However modern irrigation- engineering work was initiated dating 1850s during the British rule. The treaty was necessitated by partition of India into the dominions of India and Pakistan in 1947.

The fruition of the treaty is attributed to David Lilienthal, former head of both the Tennessee Valley Authority and the U.S. Atomic Energy Commission.

After six years of talks, Indian Prime Minister Jawaharlal Nehru and Pakistani President Mohammad Ayub Khan signed the Indus Waters Treaty in September 1960. The Indus-water treaty required the creation of a Permanent Indus Commission, with a commissioner from each country, to resolve e any difference of opinion on architecture, design, and other aspects of the dams that the two countries may build on the allocated rivers. Aside from bellicose statements to scrap the treaty, the Indus treaty remained intact though the two countries fought many wars.

In 2017, India completed the building of the Kishanganga dam in occupied Kashmir and continued work on the Ratle hydroelectric power station on the Chenab River despite Pakistan’s objections.

In post-Ayub era, Pakistan was not able to make progress on making new dams particularly the Kalabagh Dam. The construction of the dam was delayed owing to frivolous objections raised by the three provinces that are Sindh, Balochistan and Khyber Pakhtunkhwa.

Instead of trying to evolve consensus on the vital water projects, Pakistan’s politicians remained engrossed in pettifoggery or machinations to pull down whichever government happened to be in power. 

Necessity of the Kalabagh Dam

This project was approved by the Technical Committee on Water Resources during 2003-2005. However, the feasibility report has not been implemented for over 15 years.  Now three of the four provinces (excluding the Punjab) are at daggers drawn over it. The fact however remains that the inter-provincial committee was composed of eight technical experts, two from each province.

The Committee also looked into all aspects including the effect of dilution of seawater with fresh water, seawater intrusion into the groundwater, riverine irrigation, and forests fisheries (Pala fish, shrimp, kharif and rabi cultivation), besides growth of Mangrove forests. The project had already been  approved by the World Bank Indus Special Study Group in its report titled Development of Water and Power Resources of Pakistan: A Sectoral Analysis (1967). The estimated cost, then, was US$6.12 billion, over six years from 1977 to 1982.

After commissioning of Tarbela Dam in 1976, the dam could have been built in six years by 1982. The cost per unit of 12 billion units, the KBD hydel electricity was Rs1.5 as compared to Rs16.5 per unit from thermal sources.

The dam was to serve as a receptacle to store monsoon flows of the upper reaches of the mighty Indus.

Our power shortage then was 4000-5000 MW. The estimated cost of constructing the dam was US$6.12 billion, over six years from 1977 to 1982. After commissioning of Tarbela Dam in 1976, the dam could have been built in six years by 1982. The cost per unit of 12 billion units the hydel electricity was Rs.1.5 as compared to Rs. 16.5 per unit from thermal sources. We are losing Rs. 180 billion per year due to ten time costlier production (12billion xRs.15 billion). Add to it loss of US$ 6.12 billion per annum from due to the superfluous flow of 30 million Acre Feet at of water from Kotri Barrage into the Arabian Sea (one MAF valued at US$1-1.5 billion).

Our water resources reserves have not risen pari passu with growth in population, 32.4 million in 1948 to 154.6 million in 2005, and 207.8 million in 2017. In  kharif season, rivers flow at 84 percent while only 40 percent during the rabi season. The present water storage capacity in Pakistan is hardly 11.77million acres per feet (MAF) that is about only eight percent of the annual flow.

Factors of water crisis

Three provincial assemblies resolved against building the KBD. A politician alleged the dam would convert Sind into a desert. Apprehensions against the dam could be allayed by reviewing Water Apportionment Accord (as directed by Lahore High Court also vide its Order dated November 29, 2012, case no. WP 8777). No justification to kill the goose that lays the golden eggs.

Losses due to delay

The losses due to the delays in the project have soared up to Rs180 billion a year due to its 10-time costlier construction (1990 estimate).  Added to it is the loss of $6.12 billion per annum due to superfluous flow of 30 million acre feet of water from Kotri Barrage into the Arabian Sea. In mangrove season, rivers flow at 84 per cent while only at 40 per cent during Rabi season. The present water storage capacity in Pakistan is hardly 11.77MAF that is only about eight per cent of the annual flow.

Legislative assemblies of three of our provinces, barring the Punjab province, have been bitterly opposing construction of the Kala Bagh Dam. Are they justified? To answer the question we have to look into various aspects of the construction of the dam, particularly feasibility and repercussions of constructing the dam. After enactment of the Eighteenth amendment, building of dams is now a provincial subject. The fact however remains that water security is more a national subject than a provincial one.

Debate about pros and cons

 The construction of Kalabagh dam is predicted to supply over 4 million acre-feet additional water to Sindh. While explaining benefits of Kalabagh Dam, WAPDA engineer Shamsul Mulk stated that China would be generating around 30,000 megawatts of electricity from dams. “Even India has more than 4,000 dams,” he said. “We lose billions due to the non-construction of dams.”

Concluding remarks

The opposition to the Kalabagh Dam is whimsical rooted in political rhetoric. According to the United Nations’ forecast, water scarcity would be Pakistan’s greatest problem in current century.

The country has been in the grip of a severe energy crisis for several years. No one even talks about Kalabagh Dam. Towards the end of the 1980s, Pakistan met 70 percent of its energy needs from hydel (hydroelectric) power and 30 percent from thermal energy. By 2012-13, Pakistan became dependent on thermal energy generated from costly furnace oil and diesel by up to 44 percent, with the remaining 56 percent being generated from other, mainly thermal, sources. This change had a cascading effect on prices and the consumers’ bills skyrocketed.

Hydel energy remains largely neglected, despite its low production cost. Many public sector electricity generation plants have outlived their utility. Without cheaper electricity, circular debt will continue to mount. Circular debt, accumulated in the power sector, is a handy excuse for the energy crisis. This debt piles up when downstream customers fail to pay their bills to upstream suppliers (or producers) in time. Who are the defaulters? They include not only ordinary citizens, but also the provinces, the public sector, influential corporations and powerful individuals (including political tycoons). To continue supplying power, the thermal producer has to borrow (and later pay interest charges and repay the contracted loan) and find alternative financial sources, unless the government makes the bounteous payment. The solution is simple: power distribution companies should promptly pay their dues to the generation companies.

However, circular debt is only the tip of the iceberg. There are many other factors blighting the energy scenario. The government needs to evolve a policy in which the power sector is prioritized.

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Rosatom Empowering Africa

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After the first Russia-Africa summit held in Sochi, authorities have been moving to build on this new chapter of Russia‘s relations with African countries. As set in the joint declaration, the two sides have outlined comprehensive goals and tasks for the further development of Russia-Africa cooperation in significant areas including science and technology.

Business interest in Africa is steadily increasing and Russian companies, among them Rosatom, are ready to work with African partners. It is largely acknowledged that energy (construction and repair of power generation facilities as well as in peaceful nuclear energy and the use of renewable energy sources) is an important area of the economic cooperation between Russia and Africa.

Ryan Collyer is the Regional Vice-President of Rosatom for Sub-Saharan Africa, and his key responsibilities include overseeing, implementing and managing all Russian nuclear projects in Sub-Sahara African region. In this insightful and wide-ranging interview with Kester Kenn Klomegah early April 2021, Ryan Collyer discusses efforts toward providing nuclear power, training of nuclear specialists, the main challenges and the future plans for Africa.

Here are the interview excerpts:

Even before the first Russia-Africa summit held in October 2019, several African countries have shown a keen interest in building nuclear power plants. What is the current situation (overview) moving from mere interest to realizing concrete results in Africa?

It is important to note that nuclear is not new to Africa and Africa is not new to nuclear. South Africa has successfully operated Safari 1 research reactor for over 55 years and Koeberg nuclear power plant for over three decades. At one point, South Africa was the second-largest exporter of the life-saving medical isotope, Molybdenum 99, in the world. There are also currently research reactors in the Democratic Republic of Congo, Nigeria, and Ghana.

Another source is the cooperation with the International Atomic Energy Agency. Thanks to that, many countries like Benin, Ethiopia, South Africa, Tanzania, Zambia, and others benefit from modern nuclear technologies applications in healthcare and agriculture. In Zambia, a cancer disease hospital received much-needed support, and now over 20,000 patients have been diagnosed and treated at the hospital. Benin’s soybean farmers could triple their income using the benefits of nuclear irradiation. In Tanzania, its island of Zanzibar became tsetse-free thanks to the Sterile Insect Technique (SIT).

Many other African countries are already working on joining the atomic club in one form or another, whether it be the construction of a Nuclear Power Plant or a research reactor or the development of nuclear infrastructure or the training of professional personnel. In this undertaking, Russia is a trusted partner for many. We have signed intergovernmental agreements in the peaceful use of atomic energy with Algeria (2014), Ghana (2015), Egypt (2015), Ethiopia (2019), Republic of Congo (2019), Nigeria (2012, 2016), Rwanda (2018), South Africa (2004), Sudan (2017), Tunisia (2016), Uganda (2019) and Zambia (2016). Memoranda of Understanding (MOUs) were signed with Kenya in 2016 and Morocco in 2017. 

How would you estimate the potential nuclear energy requirements in Africa? How is that compared to other alternative power sources such as solar and hydro-power?

Today, 600 million people in sub-Saharan Africa (one-out-of-two people) do not have access to electricity. Any significant change is not forthcoming, according to the International Energy Agency (IEA). Estimations show that 530 million people (one-out-of-three people) will remain without electricity in 2030. As GDP growth and urbanization in Africa escalate, the power demand will increase exponentially. Today the electricity demand in Africa is 700 terawatt-hours (TWh), with the North African economies and South Africa accounting for over 70% of the total.

According to the IEA estimate scenarios, by 2040, the electricity demand will more than double in the Stated Policies Scenario to over 1600 TWh. It may reach 2300 TWh in the Africa Case Scenario. It is undeniable that Africa needs vast amounts of sustainable energy to transform societies, grow economies, and reduce the global carbon footprint.

No single source of electricity can provide these amounts and considerably lower greenhouse emissions. A healthy mix of several intermittent and base load options can satisfy these criteria and allow for the economy and society’s prosperity. The top-5 performers in the Energy Trilemma Index by World Energy Council have a combination of both nuclear and renewable resources to balance all three dimensions: equity, security, and environmental sustainability, thus enabling their prosperity and competitiveness. For example, Switzerland has over 30% nuclear, Sweden roughly 40% nuclear, Finland – 18%, and France – over 70% nuclear.

Apart from energy poverty, nuclear can solve other continent problems, from low industrialization to advances in science, healthcare, and agriculture, thus propelling the continent towards the African Union’s Agenda 2063 Master plan, which envisions Africa’s transformation into the global powerhouse of the future. So, we are advocating a diverse energy mix that utilizes all available resources, including renewables and nuclear, to ensure climate resilience and environmental safety, social equity, and supply security.

Can you discuss concretely about the planned nuclear projects in South Africa, Zambia and Egypt? Say why these have still not taken off as planned, the necessary agreements have been signed though?

Our plans for projects in Egypt and Zambia are proceeding at the pace acceptable for both parties. In Egypt, we plan to commission four power units with VVER-1200 type reactors with a capacity of 1200 MW each by 2028. We will also supply nuclear fuel throughout the entire NPP life cycle (60 years), provide training services, and carry out maintenance and repairs within ten years after each unit’s start. With our initial agreement signed in 2015, and necessary infrastructure still being put in place, the El Dabaa project is firmly underway. 

Our project in Zambia, Center for Nuclear Science and Technology, is implemented in several stages, starting with a Multipurpose Irradiation Center. Once the Center is built, a training complex within it will contribute to building capacity in nuclear technology by providing opportunities for training students of different degrees from Bachelor to PhD and carrying out advanced experiments and research that provides a new level of practical competencies. With Zambia being new to nuclear, the installation of infrastructure is the key priority at the moment. 

As for South Africa, we maintain a cordial working relationship with crucial nuclear industry bodies and are monitoring their ambitions to add 2500MW of new nuclear to the grid very closely, but we are not currently engaged in any active nuclear projects. The initial 9600MW nuclear new build program in South Africa was halted in 2017 as a result of internal procedural issues of the country. It is important to note that the 9600MW program did not make it past the Request for Information (RFI) stage, and Rosatom was only one of many vendors interested to bid for the project.  The program was then downsized to 2500MW and restarted in 2020 as the country grapples with power shortages due to an aging coal-fired fleet. 

To what extent, the use of nuclear power safe and secured for Africa? What technical precautions (measures) can you suggest for ensuring nuclear security?

A nuclear power program is a complex undertaking that requires meticulous planning, preparation, and investment in time, institutions, and human resources. The development of such a program does not happen overnight and can take several years to implement. All countries, which embark on the path towards the peaceful use of nuclear technologies, do so by adopting the IAEA Milestone Approach framework. This approach provides newcomer countries with well-structured guidance and a clear to-do list, which gives them a clear understanding of how to safely and effectively implement and manage their civil nuclear program. This approach includes necessary policy and legal framework, human capital development, installation of management and regulatory bodies, implementation of safeguards, and educating the public. 

Since many of our partners are relatively new to the technology, we are able to provide full support to them on their path towards achieving their national nuclear energy programs, this at all of its stages of the project and in full accordance with IAEA regulations. 

Do you also envisage transferring technology by training local specialists and how does this currently look like, how many specialists per year undergoing training in Russia?

The ultimate goal in our projects is to help our partners gain independence in terms of human capital. Still, it will need at least a decade of education and training of many young people and professionals. 

As part of our commitment, we assist our partner countries with training local personnel via a government-sponsored bursary program by the Russian Ministry of Science and Higher Education. Since 2010, hundreds of students from Algeria, Ghana, Egypt, Zambia, Kenya, Nigeria, Tanzania, Uganda, Ethiopia, and South Africa have been receiving nuclear and related education at leading Russian educational institutions. Currently, over 1500 students from Sub-Saharan Africa study in Russia under bachelor, master and post-doc programs, 256 students are on nuclear and related programs. 

Another aspect is short-term training for professionals – managers and specialists in nuclear. The topics of training range from nuclear energy, technology management and technical regulations to safety features of Russian designs in nuclear. 

In your view, why many African countries opting for renewable energy? Is it nuclear power affordable for Africa? With this trend, what is Rosatom’s plan for future cooperation with African countries?

Currently, renewables show the fastest-growing curve in meeting this demand with the solar potential of 10 TW, the hydro of 350 GW, the wind of 110 GW, and the geothermal energy sources of 15 GW. Many are easy to install and demand little in terms of investment. 

However, the critical question regarding these sources is reliability. US Energy Department estimates show that nuclear power plants produce maximum power over 93% of the time during the year. That’s about 1.5 to 2 times more than natural gas and coal units and 2.5 to 3.5 times more reliable than wind and solar plants. To replace a nuclear power plant, one would need two coal or three to four renewable plants of the same size to generate the same amount of electricity onto the grid.

Another critical question is the cost. Most of the funds are needed to during the construction period. Building a large-scale nuclear reactor takes thousands of workers, massive amounts of steel and concrete, thousands of components, and several systems to provide electricity, cooling, ventilation, information, control and communication. However, apart from a reliable source of electricity throughout several decades (from 40 to 60 years minimum), the International Energy Agency (IEA) estimates that the construction of new NPPs is competitive compared to other green energy sources like wind and solar. It is also worth noting such an economic advantage of nuclear power as the electricity cost’s stability and predictability.

Our experience shows substantial dividends for any country that joins the international nuclear community. We are talking about thousands of new jobs, quantum leaps in R&D, and the creation of entirely new sectors of the economy. According to our estimates, US$1 invested in nuclear power plants under the Rosatom project brings in US$ 1.9 to local suppliers, US$4.3 for the country’s GDP, and US$1.4 to the Treasury as tax revenues. 

We have recently calculated even more specific data based on El Dabaa nuclear power station. During the construction period, the NPP project will increase the country’s GDP by over US$4 billion or 1%, bring around US$570 million as tax revenue, and employ over 70% of local personnel. Apart from the NPP itself, Egypt will have a new seaport, several roads, and schools constructed. After the start of operations, over 19% of the population or 20 million people will have access to electricity, and the NPP will prevent over 14 million tons of CO2 emissions annually.

In general, I would like to say that while the capital cost for nuclear energy may be higher, the reliable energy that it produces over its lifespan is very affordable. Beyond this, the inclusion of nuclear energy into the energy mix itself gives a powerful qualitative impetus for the economy, the establishment of high-technology-based industries and, as a result, the growth of export potential and quality of life.

Reference: Rosatom offers integrated clean energy solutions across the nuclear supply chain and beyond. With 70 years’ experience, the company is the world leader in high-performance solutions for all kinds of nuclear power plants. It also works in the segments of wind generation, nuclear medicine, energy storage and others. Products and services of the nuclear industry enterprises are supplied to over 50 countries around the world.

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