SREP Investment Plan for KenyaScaling up Renewable Energy Plan
This is Kenya's Investment Plan (IP) for the Scaling-Up Renewable Energy Program (SREP) funding. The IP is in line with the national renewable energy development strategy as set in the Least Cost Power Development Plan (LCPDP), Rural Electrification Master Plan, Sessional Paper No. 4 of 2004 (The energy policy document), the Energy Act of 2006, the Feed-in Tariff (FiT) Policy, the Kenya National Climate Change Response Strategy and Kenya Vision 2030 (the National economic development blueprint).
Kenya is one of the six pilot countries selected to benefit from SREP. The SREP program will support Kenya's initiatives towards achieving a transformational change that will lead the country towards low greenhouse gas (GHG) emission development pathway by harnessing the abundant renewable energy resources in country.
Country and Sector Context
Kenya has a long-term development strategy, The Vision 2030, whose aim is to drive the country into a globally competitive and prosperous economy with high quality of life. Covering the period 2008 to 2030, the country's new development blueprint aims to transform Kenya into a newly industrializing, “middle-income country providing a high quality life to all its citizens by the year 2030.” The Medium-Term Plan (MTP - 2008 to 2012) was prepared to implement the first phase of the strategy. It calls for rehabilitating the road network, upgrading the railways, improving urban public transport, and expanding access to electricity and safe water.
The private sector is a key contributor to economic growth, particularly in tourism, building and construction, transport and communication, agriculture, manufacturing, and financial services, although internal infrastructural challenges impede the sector from reaching its full potential.
The energy sector has been restructured as per the Sessional Paper No.4 of 2004 and the Energy Act No.12 of 2006. The institutional arrangement in the electricity sub sector in Kenya comprises the Ministry of Energy (MOE), Energy Regulatory Commission (ERC), Kenya Generating Company (KenGen), Kenyan Power and Lighting Company (KPLC), the Rural Electrification Authority (REA), Kenya Electricity Transmission Company (KETRACO), Geothermal Development Company (GDC) and a number of Independent Power Producers (IPPs).
The current electricity demand is 1,191 MW while the effective installed capacity under normal hydrology is 1,429 MW. Generation shares from hydro, geothermal, baggase (cogeneration) and wind are 52.1%, 13.2%, 1.8% and 0.4% respectively while fossil based thermal contributes at 32.5%. The peak load is projected to grow to about 2,500MW by 2015 and 15,000 MW by 2030. To meet this demand, the projected installed capacity should increase gradually to 19,200 MW by 2030.
It costs approximately KES 35,000 (US$422 at an exchange rate of 83) to connect to the grid and about 15 US cents equivalent per kWh of electricity service. The costs are high because of the substantial investments needed to build new generation, transmission and distribution facilities, combined with the high operating cost of supplying electricity. This high cost is a major obstacle to the expansion of electricity connections to low-income households.
Weak transmission and distribution networks, low countrywide electricity access and overreliance on hydropower which is vulnerable to vagaries of weather, are some of the challenges facing the electricity sub-sector. To address the challenges, the Government has formulated strategies whose objectives are to rapidly expand installed electricity capacity, expand and upgrade the transmission and distribution networks, and develop renewable sources of energy: geothermal, solar, wind, biomass and small hydropower.
In keeping with the Millennium Development Goals, Kenya is committed to reducing by half the number of people who lack access to modern energy services by 2015 and reducing by half the number of people living in poverty. Access to affordable energy is an essential prerequisite to achieving economic growth and poverty reduction in Kenya. The majority of people who rely on biomass for thermal energy and who lack access to electricity are in rural areas and the individuals who cook with biomass or coal are almost universally women. The lack of access to affordable energy services -- “energy poverty” -- disproportionately affects women and girls due to their traditional roles, household responsibilities, and low socio-political status. The Government is expanding access of electricity to the rural areas through the rural electrification programme covering both grid extension and off-grid systems. Further, in collaboration with development partners, Non Governmental Organizations and the private sector the Government is promoting the growth of wood fuel as well as the efficient and sustainable use of biomass resources. The Government is also formulating a strategy to make the country “kerosene free” by substituting renewable energy for kerosene in lighting applications.