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Renewable Energy Generation is Big Business in Kenya

Take an exponentially rising need for clean, reliable energy; add a new renewable energy feed-in tariff (REFITT); and then consider erratic weather conditions that have affected over-relied upon hydropower generation in Kenya and you get an influx of interest in renewable energy by Independent Power Producers (IPPs).

The Kenya Tea Development Agency (KTDA) is one IPP that has decided to venture into wind energy generation. General Manager of KTDA Power Company, Lucas Maina, said in an interview that the decision to venture into wind energy production was based on the fact that wind power is cheap to produce compared to hydropower.

“For example, one wind installed megawatt cost between KSh166 and KSh207 million [approximately US$2 to $2.4 million] while one hydropower installed megawatt requires between Ksh166 million and Ksh250 million,” he said.      

KDTA commissioned a study that showed it could install between 10 and 20 MW at a cost of over KSh2 billion [approximately US$22 million] in the Micii Mikuru village of Meru County in the Eastern Province (Counties are new administrative units in Kenya).

Other entities that are considering entering the IPP business include Mumias Sugar Company in Kenya’s Western Province and Imenti Tea Factory in the Eastern Province. Mumias Sugar Company already has a 26-MW bagass cogeneration project that supplies electricity to the national grid. Winafrique Technologies LTD is another private company investing in wind-solar cogeneration, wind pumps and energy storage.

KTDA plans to sell energy from the wind project to the national grid, therefore generating more income to sustain its operations. “The agency’s plans are to enhance the farmers’ income base over and above diversifying energy base, the farmers will contribute 35 percent while the agency will contribute 65 percent for the wind power project,” Maina told RenewableEnergyWorld. Wind energy potential in Kenya has yet to be fully explored, and Maina said the energy produced from wind would go a long way towards cutting down the cost of tea production.

Besides wind energy, the tea agency is also working with other factories to invest up to Sh5 billion [US $53 Million] for small hydropower production in 10 regions in the Eastern Province. It was the first private company to invest in small hydro. The tea agency intends to diversify and strengthen its power base so that it can be in a position to compete with other players in the tea business. The project enabled the factory to cut its power costs by 60 percent and it sells surplus energy to the national grid through a power purchase agreement with power distributor, Kenya Power and Lighting Company (KPLC).

300-MW Wind Project Coming Soon

Kenya Electricity Generating Company (Kengen) is a government owned power producer that controls more than three quarters of the total electric production in the nation.  It currently has 5.1 MW of wind power installed in Ngong hills forest but plans to boost this to 25.5 MW by the end of 2012. According to Scaling-up Renewable Energy Program (SREP) there are 300 MW of Kengen wind projects in the pipeline.

Kenya is set to commence construction on one of the largest single private wind power projects in sub-Saharan Africa. Lake Turkana Wind Power (LTWP), a subsidiary of KP and P firm from the Netherlands, is building the 300-MW project. Permanent Secretary in the Ministry of Energy Patrick Nyoike said the KSh75 billion [approximately US$1 billion] project will help meet Kenya’s growing energy demand and also help unlock investment potential of other IPPs.

According to the government, LTWP wind power will be the least cost power generation option available along with geothermal power.

Kenyan Government Has Ambitious Renewable Energy Goals

Besides wind energy, the Kenyan government would like to see the development of power from geothermal, solar, biogas, biomass and small hydro sources.

According to the government’s National Climate Change Response Strategy 2010, “Kenya stands a chance to benefit from carbon markets by putting in place mitigation measures including the promotion of energy efficiency and renewable energy technologies.”

The 2010 response strategy recommends that the government accelerate the development of green energy including wind, solar and renewable biomass.

Development of such green energy, the strategy notes, is imperative if the country is to meet the growing demand of energy and reap various benefits including reducing foreign expenditures on crude oil and other petroleum products. Kenya’s power capacity currently stands at about 1,500 MW compared to 40,000 MW in nearby South Africa. It is estimated that Kenya will need 10,000 MW of installed capacity by 2030 to meet peak demand. 

The analysts further recommend that the renewable energy resources map be updated to reflect more emerging technologies. Easily accessible online information will potentially attract more investor interest in the region. 

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