As the Kenyan government plans to upscale its future energy mix, various policies and strategies need to be put in place to attain the desired target energy mix. There is need for the government to align its policies in line with the best practice provided in the global energy industry and more so with model countries especially in respect to different renewable energy sources.
Sustainable Development Goal no.7 clearly underscores the need for Energy security which can be explained in three thematic aspects; that is there is need to have access to affordable, reliable, clean and sustainable energy. In addition, Goal no12 further indicates the need to ensure sustained consumption and production patterns, hence the need to have an effective match on the demand and supply of energy as it is the catalyst of investments, economic growth and eventual attainment of Kenya’s economic blueprint ‘Vision 2030’.
Kenya’s current energy mix
The Kenya economic blue print Vision 2030 identifies energy as a critical component in economic growth, improvement in the standard of living and enhancement of national Security. Energy has also been recognized as the key enabler for the infrastructure development. The government of Kenya through Vision 2030 acknowledges that competitive, reliable, sustainable and affordable energy is critical in the accomplishment of the vision. However, The increased cost of energy in Kenya has negatively impacted on economic activities particularly those that are energy intensive such as cement, steel, pulp and paper production and generally the entire manufacturing sector. In a developing economy like Kenya, the affordability of energy is significant in determining the competitiveness of locally manufactured goods relative to imports. In this regard, the current high energy prices have a negative impact on economic growth, employment creation and balance of trade and payments. It is therefore imperative that Kenya needs to reduce its cost of energy to remain competitive.
Kenya’s projected energy mix in 2030
The energy mix in Kenya is expected to change significantly in the medium term as the government seeks to change the over reliance of the country on petroleum and hydropower. This change in energy mix has been informed by the cost of power generation using diesel, weather vagaries and the need to have clean and affordable energy.
The government of Kenya in its medium (2020) and long term (2030) plans, seeks to diversify its energy mix and make renewable sources of energy to contribute more. By 2020, Kenya projects an additional 5,000MW into the national grid both from traditional and non-traditional (renewable) energy source. Among the non-traditional energy source is the wind power project in Turkana which is projected to cost €658 million and envisaged to contribute 300MW.
So what are the various policy options that the Government of Kenya needs to take in to Account?
- With the projected extraction of oil, gas and coal, Kenya is expected to reduce it’s over reliance on imported petroleum for heavy energy uses and electricity generation.
This is expected to support the government’s policy of reaching middle income status by 2030. However, exploration and extraction of oil, gas and coal requires the right policy and legal framework to be effective .For instance, government needs to play a central role and hereby provide leadership in engaging all policy makers and stakeholders in a bid to come up with policies and international best practices that address issues mainly on local content, technical capacity as well as management of revenues from the extractive industry.
- A comprehensive strategy ought be developed and adopted in respect to bio-energy
as up –scaling of this sub-sector could potentially lead to deforestation or negatively
affect food production. Policies to promote bio-energy need to take these negative effects into consideration for their design.
- There is need to further enhance publication of a national solar and wind atlas. In
2008, the publication by the ministry of energy informed potential investors about suitable areas and thus reduced the costs for feasibility studies. This will pave the way for rolling out of solar panels and wind turbines as well as to enhance the financing for the sector as it is backed by a credible wind and solar atlas.
- Another policy approach that the government of Kenya can undertake is to offer
Long-term guarantees to renewable energy producers through power purchase agreements such as feed-in-tariffs. This would ensure that producers of renewable energy have a ready market which will motivate investments in renewable energy technologies.
- A comprehensive strategy and policy framework on Public Private Partnership
needs to further be developed in the path towards achieving the projected energy mix in the medium term. Hence enacting appropriate legislations by the National and county government from time to time to support the public private partnership model is a policy in the right direction.
Notwithstanding its presence, non-tradition energy source in Kenya is still at a nascent stage of development .The share of renewable energy that constitutes the entire energy structure in Kenya is still small, hence policies are a crucial component in establishment of an effective energy mix.
Investments in the energy sector are long term and thus appropriate policy mix, legal and regulatory framework is essential for its development.
What should be noted is that any investor in the energy sector requires the correct policy environment to ensure that the investment will have reasonable returns over its useful life. Policies enumerated here in will offer a fundamental step in attainment of social- economic status that are envisioned in Kenya’s blue print developmental agenda dubbed vision 2030