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Occasional  Paper 26: Potential Renewable Energy Technologies in Kenya’s Electricity Supply – A Review of Geothermal and Cogeneration Technologies

By

Paul Mbuthi and David Yuko

Contributors: Stephen Karekezi, John Kimani, Waeni Kithyoma and Ayago Wambille

AFREPREN/FWD - African Energy Policy Research Network

Heinrich Böll Foundation Regional Office for Eastern and Horn of Africa


Executive Summary

The World Summit on Sustainable Development (WSSD) held in Johannesburg in 2002 proposed that countries consider adopting a 10% target for energy supply from renewable energy sources. While this proposed target was not adopted by countries, a number of African energy policy makers and professionals felt it would be worthwhile to evaluate the viability of this target, and the benefits that could arise from its realization. 

This study was therefore initiated to investigate the viability of the target for Kenya.  Two technologies were considered – Geothermal and Biomass-based cogeneration, for their potential contribution to electricity supply in Kenya.  The study was based on the review of existing literature as well as survey data collection, and interviews with stakeholders.

The findings of the study reveal that the proposed 10% renewables target is not only achievable, but also desirable. In the case of Kenya, this target has been achieved in the electricity sector by geothermal energy alone, currently contributing over 10% of installed power generation capacity. The additional potential from biomass-based cogeneration will not only surpass this target, but also confer other benefits including job creation and additional income generation in the agricultural and industrial sectors, savings in foreign exchange, strengthening and diversification of the electricity generation mix, in addition to reduction in greenhouse gasses emitted to the atmosphere.

The study concludes that it is technically and economically viable to achieve a geothermal target above 10 % of total power supply. Kenya has already achieved the 10% target and plans to increase the contribution of geothermal in its power supply to 22% by the year 2019. It is estimated that the country’s total theoretical potential is 2,000 MW close to twice current installed capacity.

Geothermal energy's technical development can be modular, with flexibility of scaling up as financial resources and other factors become favourable. There are tangible employment and enterprise creation benefits from the exploitation of the geothermal energy resource.  The study estimates that over 2000 jobs can be created from the development of planned geothermal investment in Kenya. 

To expand geothermal power use, a number of steps should be taken by interested parties such as the government, manufacturers, financial institutions and lobbyists. First, a significant proportion of the planned fossil fuel power plants should be assigned to geothermal. Second, research and development on geothermal energy needs to be supported by formulating progressive and supportive policies, suitable legal and regulatory instruments that promote cooperation between industry, universities and other stakeholders. Finally, because of its environmental and developmental benefits, civil society and other stakeholders need to lobby the government and donors to prioritise geothermal resource development 

This study demonstrates that it is technically feasible to increase the amount of power co-generated in Kenya’s sugar industry. Kenya’s sugar industry has not fully exploited its cogeneration potential due to various reasons, including poor managerial skills, political interference in the running of the sugar industry, policy and technical challenges in connection and sale of power to the grid.

It is estimated that 4 – 6 direct jobs will be created for each GWh of electricity produced in the cogeneration sector. The investment costs required for development of new capacity ranges from US$ 1.4 to US$ 3.1 million per MW for cogeneration plants of varying boiler capacities and pressures.

In addition, using cogeneration will reduce the need to import fossil fuels and lead to an estimated annual savings of US$ 90 million. Cogeneration will also provide an avenue through which funds and resources for sustainable development can be accessed, for example, the Global Environmental Facility (GEF), the Clean Development Mechanism (CDM) and other Kyoto protocol mechanisms. This will have a significant positive impact on poverty alleviation and mitigation of green house gases caused by burning of fossil fuels.

This study proposes policy recommendations to promote cogeneration development in Kenya. The recommendations are directed to policy makers and pertains the removal of policy barriers and creation of incentives for the growth of the sugar and cogeneration sectors. The recommendations also target lobbyists and potential implementers of new cogeneration plants such as sugar industries, Independent Power Producers, financiers/investors, and the Kenya Sugar board. Development of enabling policies to provide a framework for co-generation development is required. The policy should provide realistic but challenging targets for increasing the contribution of cogeneration in the national electrical energy supply mix. The national sugar authority needs to be restructured and empowered to facilitate promotion of co-generation. The government will need to provide incentives such as tax holidays, duty waivers on importation of specified equipment ; encourage  the national power utility (KPLC) to purchase both intermittent and firm power from sugar companies as well as set attractive prices for power from cogeneration. The sugar industry should also be encouraged to diversify their products into energy-related activities such as production of ethanol and electricity.

The study recognises the need to develop human resources and skills required to steer the development of the substantial co-generation potential in the country. While attracting the right investment in cogeneration requires involvement of local private sector, it also needs investment in research to understand the risks and build effective financing partnerships with the private sector.

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