Energy
Tuesday, September 13th, 2022 10:00 am EDT
President William Ruto was sworn in as the 5th president of the Republic of Kenya. In his address soon after being sworn in as president, he reaffirmed Kenya’s commitment to transition to 100% clean energy by 2030.
Kenya has already done really well when it comes to increasing the share of renewable energy in its electricity generation mix. According to the latest Economic Survey from the Kenya National Bureau of Statistics (KNBS), in 2021, Kenya’s total installed electricity generation capacity increased by 5.4% to 2,990 MW. The total effective capacity rose by 5.6% to 2,858 MW in the same period. The KNBS report defines the effective capacity as the maximum electric output a power station is expected to achieve given current operating constraints. The total electricity generation rose by 7.0% to 12,414.7 GWh in 2021, and the good news is that 89.6% of this electricity was generated from renewable sources!
Here are some highlights from President Ruto’s address today:
“Among the central concerns of my government will be climate change. In our country, women and men, young people, farmers, workers and local communities suffer the consequences of climate emergency. It is not too late to respond. To tackle this threat, we must act urgently to keep global heating levels below 1.5C, help those in need and end addiction to fossil fuels.
“Africa has the opportunity to lead the world. We have immense potential for renewable energy. Reducing costs of renewal energy technologies make this the most viable energy source. Kenya is on a transition to clean energy that will support jobs, local economies and the sustainable industrialisation. In Kenya, we will lead this endeavour by reaffirming our commitment to transition to 100% clean energy by 2030. We call on all African states to join us in this journey.
“As members of the international community, we shall support a successful Climate Summit in Africa in November, by championing delivery of the finance and technology needed for Africa to adapt to climate impacts, support those in need and manage the transition.”
Kenya’s renewable energy sector is driven by a good mix of geothermal, wind, hydro, and some utility-scale solar. Kenya is already in the top 10 globally in terms of electricity generation from geothermal, with close to 1,000 MW in installed capacity. Kenya’s Great Rift Valley has an estimated geothermal potential of 10,000 MW. This dependable clean energy potential puts Kenya in a great position to get to 100% from renewables very quickly. As the economy grows, electricity from geothermal can be a key anchor. We hope to see some growth in the utility-scale solar space as well. The solar sector still only contributes 1% to the total generation.
Kenya’s progress has attracted interest from local and international players that are looking to leverage this renewable energy dominated grid to catalyze the adoption of electric vehicles. Other stakeholders are keenly exploring the prospects of a green hydrogen economy in Kenya. Some of the areas identified are a strong focus on using the geothermal resources to power electrolyzers to produce green ammonia for local fertilizer production. Local production of fertilizers will be a key boost for the Kenyan economy, with widespread impacts in job creation and reducing the import bill via import substation.
All this locally generated clean, renewable electricity can also help enhance Kenya’s energy security as well as reduce costs in the transport sector as well. Kenya stands to benefit quite a lot from substituting a significant portion of imported petroleum products with this locally generated clean electricity by accelerating the adoption of electric vehicles. Imports of petroleum products contribute a huge chunk of Kenya’s import bill. With Kenya’s trade deficit continuously widening, this import substitution will need to be looked at ASAP. According to the latest Economic Survey from the Kenya National Bureau of Statistics (KNBS), there was a 30.9% growth in imports in 2021. The increase in imports widened the trade deficit from KSh 999.9 billion in 2020 to KSh 1.4 trillion in 2021. That’s a trade deficit of about US$11.8 billion! Imports rose from KSh 1.6 trillion in 2020 to KSh 2.1 trillion, mainly driven by an increase in imports of petroleum products, the report says.
Kenya’s Trade Deficit Over The Past 5 Years
Source: KNBS 2022 Economic Survey
During the campaign period of the just ended Kenya elections, President Ruto’s Kenya Kwanza Coalition put together quite an impressive manifesto that included support for electric mobility and renewables. Under the electricity section of the document, Kenya Kwanza stated that:
“Electricity is a vital economic and social service critical to production, essential services such as health and security and quality of life of citizens. While generation capacity has increased considerably in recent years, our electricity is expensive and unreliable. This ought not to be the case, given that we are blessed with considerable geothermal, solar, wind and water resources that can provide cheap environmentally friendly power. One of the key contributors to both the cost and quality of power is the aging transmission and distribution network. The investment required to upgrade the network is considerable, more so in the difficult financial situation the country is in, but it is imperative. Cheap clean power can be a strong value proposition for attracting energy-intensive production for the global market in Kenya.”
Kwanza Kenya also stated that Kenya should leverage, “A disruptive technology landscape that portends transformation of the electricity industry perhaps on the same scale as the mobile phone revolution disrupted fixed line telephony”. This includes “rapidly declining costs of renewable power which, as noted, Kenya has in plenty. The cost of utility scale power storage is also declining sharply, which is helping to overcome the limitations of intermittence of solar and wind power. On the consumer side, stand-alone solar power and micro-grids are increasingly cost-effective alternatives to grid power for domestic and even commercial consumers. Transportation is going to be a big consumer of electricity as electric vehicles replace fossil fuel ones.”
Kenya Kwanza committed to:
Turn around Kenya Power. “We will delink Government development initiatives, leaving Kenya Power to operate on commercial principles. A policy, regulatory and financing framework for off-grid community-owned development projects (mini and micro-grids) will be instituted. Improve reliability, bring down the cost of electricity.”
Kwanza Kenya proposed a 3-point plan to bring down the cost of power, namely:
- Mobilize the resources needed to revamp the transmission and distribution network
- Accelerate geothermal resources development
- Develop Liquified Natural Gas (LNG) storage facility in Mombasa, with a view to phasing out heavy fuel oil (HFO) from the power generation portfolio. This will also contribute to meeting Kenya’s emission reduction commitments
On e-mobility, Kenya Kwanza government promised to:
- Roll out electric vehicle (EV) charging infrastructure in all urban areas and along the highways
- Provide financial and tax incentives for public service vehicles and commercial transporters to convert to electric vehicles
- Leverage the financial support that will be provided to the boda boda sector, through the Hustler Fund, to develop the nascent electrical vehicle (EV) and motorcycle assembly industry
Kenya Kwanza also stated that “Kenya is well-endowed with cheap renewable power resources. Accelerating transition to electric vehicles is a win-win proposition in terms of contributing to Kenyans emission reduction commitment, cheaper transport, and leveraging on the large local and regional motorcycle market (~500,000 units a year) to build an electric vehicle industry.”
- Create incentives for adoption of electric mass transit systems in all cities and towns
It was really good to see that expanding the utilization of Kenya’s vast renewable energy resources such as geothermal, along with increasing the penetration of variable renewables like wind and solar, coupled with utility-scale battery storage to address intermittency issues, are now being included in election agendas by political parties. Kenya has potential to lead in the electric mobility industry on the continent and it is encouraging to note that political parties are also recognizing this. The potential of the green hydrogen economy is also now part of the conversation. With such strong interest from the private sector, it’s always good to see government buy-in to back these developments. Now that President Ruto has been given the mandate, we hope to see the accelerated implementation of some of the projects in his manifesto that focus on electric mobility and renewable energy.
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