Showing posts with label Kenya Power Market Growth. Show all posts
Showing posts with label Kenya Power Market Growth. Show all posts

Thursday, September 27, 2018

Large Investments to Drive Kenya Power Sector: Ken Research

Kenya is the fourth largest economy in sub-Saharan Africa and performing well in generation of power for population and per-capita GDP. The power sector in Kenya was privatized in 1998. Kenya power and lighting company (KPLC) is responsible for the transmission, distribution and sale of electricity throughout the country.

The interconnected system in Kenya has a total installed capacity of 1,533 megawatts (MW) made up of 761.0 MW of hydro, 525 MW of thermal, 198 MW of geothermal, 5.45 MW of wind , 26MW from cogeneration and 17MW of isolated grid. In addition, the total effective capacity is 1,515 MW during normal hydrology and registered interconnected national sustained peak demand is 1,183 MW.
According to study, “Kenya Power Market Outlook to 2030, Update 2018 - Market Trends, Regulations, and Competitive Landscape” some of the major companies that are currently working in the Kenya power market are Plexus energy Ltd, Power Gen renewable energy, KenolKobil, Kenya Electricity Generating Company, Umeme, Kenital solar, Mercury engineering services, Solagen power Ltd, Vivo energy Kenya.

In Kenya, the main source of power supply is hydro electricity and fossil fuels. Hydro-energy is used to generate electricity by making water fall on large turbines from a great height.Hydroelectric power in country currently accounts for about 49% of installed capacity, which is about 761MW.Hydro power comprises about 60 per cent of the installed capacity and is obtained from various Kenya electricity generation company (KenGen) stations. Apart from this wind power is the most mature in terms of commercial development. The most recent investments in wind energy are to be developed by independent power producers (610 MW), Lake Turkana wind (300MW), Aeolus kinangop wind (60MW), osiwongong (60MW), aperture green ngong (60MW). Recently, local production and marketing of small wind generators also has been started and few pilot projects are also under consideration.

The Kenyan power system has continued to expand thermal plants to mitigate shortfalls and to provide peaking capacity in the long term. The new plants are expected to be able to switch from diesel and kerosene to natural gas in future. Natural gas will be obtainable alongside the recently discovered oil reserves. The nuclear power is also considered a potential long-term option for electricity generation. Nuclear generating units are characterized by high capital investment and low operating costs and normally serve as base load units. It is generally projected that in 2022 Kenya will have a nuclear plant having a generation capacity of 1000MW.

Country faces a range of challenges to financing the power sector and attracting commercial capital, which are; financing ecosystem for commercial capital, High GoK financial exposure to the energy sector, opaque or inconsistent processes which make securing financing difficult, insufficient financing models for state-owned enterprises, lack of affordable financing for private off-grid developers, high infrastructure development costs, long lead-time required to implement energy projects, over reliance on hydropower, high cost of energy, inability to deliver adequate energy to meet national needs and low investments in the sector. KenGen is the main player in electricity generation, with a current installed capacity of 1,176MW of electricity. It is owned 70% by the Government of Kenya and 30% by private shareholders. The Company accounts for about 75% of the installed capacity from various power generation sources that include hydropower, thermal, geothermal and wind.

Country is expected to be energy independent very soon. In the upcoming years there will be an extreme investment, change in government’s policies in favor of these resources and auctions which are expected to promote electricity generation from renewable. There are several opportunities existing for the transmission system to connect the remote areas. The Transmission build-outs and solutions are expected to ensure supply/demand balance which have good potential in Kenya. Electricity delivery and demand side management solutions as smart grid deployments are expected to advance in the future period.

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Ankur Gupta, Head Marketing & Communications
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