Business Daily (Nairobi)
Jim Onyango
12 November 2009
As Kenya grapples with electricity shortage that threatens production and jobs in the manufacturing sector, a donor agency is urging a shift in focus from hydro-generation to geothermal.
Agence Francaise de Developpement (AFD), the development arm of the French Government, says Kenya's over-reliance on water based electricity generation cannot be sustained over the next 30 years due to effects of climate change.
"Kenya's hydro-generation potential is reaching its limit because of the growing demands for electricity. The message we are sending to the Kenya government is that it can now focus on geothermal generation which has the potential to contribute between 4,000 and 7,000 MW of power by 2030," said Jean-Pierre Marchelli, the director of AFD in Nairobi.
About 56 per cent of Kenya's total electricity capacity of 1,200 megawatts comes from hydrogenation, while 36 per cent is diesel based. Geothermal generation takes eight per cent of the country's total installed capacity, but donors say focus on geothermal would ensure adequate electricity supply for consumers, especially the manufacturing sector.
According to the Kenya Electricity Generating Company (KenGen), the country has a 3,000 MW potential for geothermal power but it currently exploits about 200 MW.
The Energy ministry recently established the Geothermal Development Company to fast-track the exploration and exploitation of the energy to increase Kenya's power output.
Kenya's hydro-electricity production, whose installed capacity stands at 700MW, is down by 12 per cent due to drought that hit most parts of the country.
The drought reduced water levels at various generation plants forcing KenGen to shut down its Masinga project in July.
Masinga is Kenya's fourth largest hydro power station with an installed capacity of 40MW.
According to the Economic Survey 2009, Kenya faced a decline in hydro electricity generation last year due to inadequate rainfall.
This meant that there was shortage of power for the consumers especially the manufacturing sector in the second quarter of 2009.
Electricity distributor Kenya Power and Lighting Company (KPLC) returned to normal electricity supply at the beginning of September after a two month rationing programme that resulted from electricity shortage brought about by drought. But consumers will have to contend with inflated bills.
Reduction in growth
As a result the manufacturing sector has predicted reduction in growth.
According to the Economic Survey 2009, growth in the manufacturing sector--the largest in east Africa -- is slowing down because of several challenges including electricity shortage.
The sector registered a 3.8 per cent growth last year, the lowest in the last five years, compared to a 6.5 per cent growth registered in 2007.
Figures from the Kenya National Bureau of Statistics indicate that about 265,000 people earn their livelihood from the manufacturing sector.
"Kenya needs to retain jobs in the various sectors, the only way to do it is to find a lasting solution to the electricity shortage" says Mr Marcelli.
"Other countries are also strengthening their manufacturing sectors and this exposes Kenya to global competition. The only way for Kenya to fit in the competitive world is to have reliable electricity sources to feed the manufacturing sector."
The French government has agreed to give Kenya Sh12.7 billion for its energy sector and also pledged to help the country shift from reliance on fossil fuels to green energy.
Sh7.2 billion of these funds will be used to build capacity in the recently formed Geothermal Development Company.
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