Current trends in Kenya’s Renewable Energy Industry
By Rolex Owino
Kenya represents the fourth largest economy within the Sub-Sahara African (SSA) region. In relation to one of its key economic indicator, the country’s 2018 nominal GDP rate amounted to – 21 billion USD. Overall, Kenya’s power sector continues with its impressive outlook, as evidenced by the ratio of power generation to population density, and per-capita GDP.
Of essence, the sector, as a whole, is well-governed and has a stellar history of enabling and supporting private-sector stakeholder inputs. Furthermore, the country is endowed with exceptional renewable energy resources. In terms of overall access to electricity, Kenya has hitherto nearly doubled electricity access from 24% to 46% of households – within a 4-year timeframe.
Whilst taking note of these pertinent notable improvements, however, Kenya could further enhance its power sector’s effectiveness – through the adaptation of the following key interventions:
- Attaining 2,700 MW of new generation capacity by 2020 via new financing and partnership models.
- Adopting robust off-grid solutions to buttress the country’s predominant on-grid solutions and resultantly attain universal electricity by 2020.
- Adopt innovative off-grid solutions to counterbalance the 14-18 billion USD financial injection required for meeting the sectors overriding goals.
Snapshot: Contemporary Trends
In line with the aforementioned required key interventions, Kenya’s energy sector is in need of the following requisite innovative solutions and expertise:
- Provision of vital transaction advisory, technical assistance, market information and the Power Purchase Agreement (PPA) process support for 800+ MW renewable energy projects.
- Development and support of overriding off-grid accelerator initiatives that target 2.5+ million connections.
- Robust grid management support and capacity building initiatives to enable and enhance grid compatibility with intermittent renewable energy projects.
- Development and support of innovative initiatives that would support the current 14-18 billion USD financial gap – in a bid to attain seamless generation, transmission and distribution of off-grid electrification targets that would buttress the country’s predominant on-grid solutions.
- Provision of policy and regulatory design & reform assistance that resonate with global best practices.
Note: Figure 1 represents Kenya’s current energy mix: 2018 – 2019.
Figure 1. Source: African Strategic-Ventures (ASV), Power Africa & World Bank.
Current Business and Investment Opportunities
Noting Kenya’s endowment with exceptional renewable energy resources, standing at approximately 70% of installed capacity, further diverse opportunities exist for viable exploitation. As such, a number of viable business and investment opportunities exist within the sector. Of pertinence, the following renewable energy off-grid focus areas present invaluable business and investment opportunities, therein:
- Biogas/Biodiesel to power.
- Wind Energy.
- Solar Energy.
Bringing it all together
Overall, and in line with the pertinent aforementioned evidence and justifications presented herein, varied lucrative business and investment opportunities are up for grabs within Kenya’s Off-grid renewable energy sector.
Source: ASV, Power Africa & World Bank.