Steve Mbogo
19 August 2009
Johannesburg — WHEN Kenya's cellphone company Safaricom launched its solar- powered cellphone last week, it brought smiles to millions of consumers facing electricity rationing two days a week.
Kenya is facing a severe electricity shortage partly tied to inadequate rainfall. Water levels in dams producing hydroelectric power are at record lows.
East Africa's biggest economy derives about 60% of its electricity from hydroelectric power, with the rest from geothermal and solar- thermal and diesel generators.
But that is only when water levels are optimal.
Now that dam levels are low, independent power producers who use diesel generators to supplement the national grid are doing well. And the price of electricity keeps rising.
Starting this month, electricity consumer bills show that the cost of the kilowatt hours of electricity used is almost equal to the cost component of fuel, which had not been the case before.
Kenya has an installed capacity to generate 1296MW, but this has dropped by more than 30MW, erasing the 3% reserve margin.
With rainfall expected to dwindle further -- partly because of climate change and partly due to the depletion of water catchment areas because of illegal logging -- the government is looking more closely at renewable energy sources.
"We are making a big bet on renewable energy so that we are always prepared, even when the rains fail," said Prime Minister Raila Odinga when he launched the National Task Force on Accelerated Development of Green Energy last month .
The task force's core mandate is to identify green energy projects that would generate 2000MW of electricity by 2012.
The "road map" for the projects, whose development will be through private-public partnerships, is to be announced next month, task force officials say.
P reliminary details show the target is to develop six geothermal projects with capacity of 490MW, seven wind power projects with capacity of 810MW, several co-generation projects with capacity of 300MW and one clean coal power project with capacity of 600MW. The government is unlikely to meet the cost of developing these projects.
It is already facing a budget deficit of almost R14bn, and plans to issue a sovereign bond to finance infrastructure development have been suspended. The task force says it is now counting on foreign capital inflows to finance some projects.
There is urgency. Electricity rationing is slowing the pace of Kenya's economic recovery.
Analysts' growth forecasts now vary between 3% to as low as 1,7% for this year.
Meanwhile, Kenya's private sector has its own programmes under way. One of the most ambitious is that of the Kenya Tea Development Agency, which manages 58 projects on behalf of 450000 farmers.
The agency is developing 16 mini- hydroelectric power projects utilising streams in Kenya's tea-growing areas to power factories. They pay R1,6/Kwh while the projected cost from the mini -hydro projects will be 48c.
Because of the high cost of electricity which eats into farmers' earnings, tea factories sometimes use heavy diesel and wood fuel, which are harmful to the environment.
The mini-hydro projects will produce between 0,9MW to 2,8MW depending on their size, which is sufficient to meet factories' needs. Any excess power will be sold to the national power distributor Kenya Power and Lighting Company. Other initiatives are looking at the vast wind and solar power potential in Kenya's northern region.
The Lake Turkana Wind Power Company plans to generate about 300MW of electricity for sale to Kenyan consumers by June 2011. Its wind farm will consist of 353 turbines able to generate 850 KW each. The African Development Bank has set aside R3,2bn for the project.
Gitson Energy, a local company run by Kenyans living in the US, plans to set up a 300MW wind and solar project in the same region. The projects, set to cost R5,5bn, will start in 2012, says Cyrus Thairu, the company's communications director. The project includes a 50MW solar energy project.
GE Energy has entered the east African market with a gas-fuelled reciprocating engine, called a Jenbacher, which can produce electricity using rubbish such as municipal waste. Officials said several companies in Nairobi including the Nairobi City Council have expressed interest in the generators.
Several biofuel projects are also under way. Issac Kalua, the CEO of the Green Africa Foundation, is working with 5000 farmers to grow Jatropha crops, of which the seeds are processed into biodiesel.
Several such projects have sprung up across the country. Production is still low because marketing systems and quality standards are yet to be set.
The Economic Survey 2008 indicates that the petroleum import bill increased from R1,1bn in 2006 to R1,2bn in 2007.
David Newman of Edelevu Energy, which promotes the use of biofuel, is importing diesel generators which will run exclusively on fuel from the processed seeds of croton trees, which grow naturally in most parts of the country. Using the seed fuel is 30% cheaper than using fossil fuels.
However, industry analysts say Kenya's government needs to do more to encourage the private sector to lead the drive for generation of renewable energy.
John Akoten, a research fellow and the co-ordinator of the Real Sector Programme at the Institute of Policy Analysis and Research, advocates tax concessions on renewable energy equipment.
"We should explore which of the renewable energy equipment can be made locally and encourage their development, while eliminating duty for those which can be imported," he says.
While about 80% of the country's estimated 35-million people live in rural areas, only 10% of rural households have access to electricity.
Nearly 90% use environmentally damaging biomass fuels, including wood, animal waste and alcohol, for essential domestic functions such as cooking and lighting, national statistics show.
For this to change and for Kenya to grow, investment in the power sector is now more urgent than ever.
Be the first to Write a Comment!
Copyright © 2009 Business Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
