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Energy Sector Profile of Kenya

Energy Sector Profile of Kenya

Energy Sector Profile of Kenya

The energy sector in Kenya is largely dominated by petroleum and electricity, with wood fuel providing the basic energy needs of the rural communities, urban poor, and the informal sector. The Government’s commitment to provide affordable and competitive electrical energy remains on course. The country aims at providing adequate, reliable and competitively priced electricity to spur economic growth as well as address the hitherto perennial shortfalls occasioned by over-reliance on hydropower which is often affected by changing weather patterns. The country’s electricity generation capacity stands at 2,341 MW as at end of June, 2016. This is against the peak demand of 1,600 MW.

Achievements

The Government has constructed and upgraded more than 81 power substations between 2013 and June 2016. The additional power supply has significantly widened access to power, reduced the cost of doing business, and spurred growth of enterprises, and expanded the consumer base from 2.2 million households in March 2013 to 4.9 million households in June 2016. In addition, more than 22,245 primary schools have been connected to the power grid to facilitate the digital literacy programme and 810 public institutions have been connected to alternative (solar) power.

Future plans

Government plans to continue with investment in the construction of more electricity substations, transmission lines, and distribution transformers to boost the availability of electricity and to sustain demand.

To conserve the environment and encourage value addition, the Government will continue to improve access to clean alternative energy through connection of more public institutions with solar energy, installation and maintenance of wind masts and data loggers. The Government will also connect an additional 52 towns under the street lighting program which aims at lighting towns and cities into 24-hour economy.

Sources of energy

There are three main sources of energy in Kenya namely biomass, petroleum and electricity providing energy at 69%, 22% and 9% respectively of total energy consumption. Biomass in the form of wood fuel and charcoal is used by about 80% of the population living in rural areas for cooking and heating.  Electricity in Kenya is generated from geothermal (47% of consumption), hydropower (39%), thermal (13%) and wind (0.4%).

Geothermal energy

More than 57 per cent of the new generation of electricity is from relatively cheaper geothermal energy which has had a positive impact by reducing average retail tariff from a high of Sh23 per electricity unit in March, 2013 to Sh13 per unit as at end of June, 2016.

Customer base and demand

Kenya has the fastest connection rate in the region with a customer base standing at 4,890,373 in June, 2016. , The electricity access rate currently stands at 60% in 2016   from 27% about three years ago. The country expects to achieve universal access by 2020.

In Kenya, electricity is mainly generated from hydro, thermal and geothermal sources. Demand for power is 1,191 MW while the effective installed capacity under normal hydrology is 1,429 MW. Hydro sources contribute 52.1% of total electricity, thermal 32.5%, geothermal 13.2%, bio- gas 1.8% and wind 0.4%.

Characteristics of the energy sector

  • Charcoal, firewood, paraffin, and LPG continue to be the main sources of cooking fuel
  • Over 80% of the rural population is dependent on firewood for cooking and heating, whilst in urban areas approximately 10% of the population use firewood.
  • Electricity access in Kenya is still low but increasing.
  • The energy sector in Kenya is largely dominated by petroleum and electricity.

Sector Challenges

  • Upgrading and expanding the current energy infrastructure;
  • Promoting energy efficiency and conservation;
  • Protection of environment;
  • Mobilizing requisite financial resources;
  • Ensuring security of supply through diversification of sources and mixes in a cost effective manner;
  • Increasing accessibility of energy services – not only electricity – to all segments of the population;
  • Institutional corporate governance and accountability;
  • Enhancing legal regulatory and institutional frameworks to create consumer and investor confidence;
  • Enhancing and achieving economic competitiveness;
  • Effectively mainstreaming the rural energy issues
  • Disproportionate promotion of fossil fuels and grid electricity

Regulatory Framework

Ministry of Energy and Petroleum

The mandate of the ministry is to facilitate the provision of clean, secure, sustainable and affordable energy services for social-economic development while protecting the environment. Kenya Vision 2030 and the Second Medium Plan 2013-2017 identify energy as one of the infrastructure enablers for transformation into “a newly-industrialising, middle-income country providing a high quality of life to all its citizens in a clean and secure environment”. The Ministry of Energy and Petroleum’s functions are as follows:-

  • Energy Policy and Development.
  • Hydropower Development.
  • Geothermal Exploration and Development.
  • Thermal Power Development.
  • Oil and Gas Exploration.
  • Oil/Gas and Minerals sector capacity development.
  • Rural Electrification Programme.
  • Petroleum products, import/export/marketing policy Management.
  • Renewable Energy Promotion and Development
  • Energy Regulation, Security and Conservation.
  • Fossil Fuels Exploration and Development.

Other players

  • Energy Regulatory Commission (ERC)
  • Energy Tribunal
  • Kenya Power & Lighting Company Limited (KPLC)
  • Kenya Electricity Generating Company Limited (KenGen)
  • Rural Electrification Authority (REA)
  • Geothermal Development Company Limited (GDC)
  • Kenya Electricity Transmission Company Limited (KETRACO)
  • National Oil Corporation (NOC)
  • Kenya Nuclear Electricity Board (KNEB)

The information under the energy sector of Kenya is organized as below;