Kenya Energy Situation

• Countries Portal
• Countries Group
• All Kenya Articles

Kenya

Capital:

Nairobi

Region:

Sub-Saharan Africa

Coordinates:

1.2667° S, 36.8000° E

Total Area (km²): It includes a country's total area, including areas under inland bodies of water and some coastal waterways.

580,370

Population: It is based on the de facto definition of population, which counts all residents regardless of legal status or citizenship--except for refugees not permanently settled in the country of asylum, who are generally considered part of the population of their country of origin.

55,100,586 (2023)

Rural Population (% of total population): It refers to people living in rural areas as defined by national statistical offices. It is calculated as the difference between total population and urban population.

70 (2023)

GDP (current US$): It is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources.

107,440,575,838 (2023)

GDP Per Capita (current US$): It is gross domestic product divided by midyear population

1,949.90 (2023)

Access to Electricity (% of population): It is the percentage of population with access to electricity.

76.00 (2022)

Energy Imports Net (% of energy use): It is estimated as energy use less production, both measured in oil equivalents. A negative value indicates that the country is a net exporter. Energy use refers to use of primary energy before transformation to other end-use fuels, which is equal to indigenous production plus imports and stock changes, minus exports and fuels supplied to ships and aircraft engaged in international transport.

17.17 (2014)

Fossil Fuel Energy Consumption (% of total): It comprises coal, oil, petroleum, and natural gas products.

17.38 (2014)

Source: World Bank

---

Introduction

The energy sector in Kenya is largely dominated by petroleum and electricity, with wood fuel providing the basic energy needs of the rural communities, urban poor, and the informal sector. An analysis of the national energy shows heavy dependency on wood fuel and other biomass that account for 68% of the total energy consumption (petroleum 22%, electricity 9%, others account for 1%). Electricity access in Kenya is low despite the government’s ambitious target to increase electricity connectivity from the current 15% to at least 65% by the year 2022.

►Go to Top

Energy Situation

Kenya has an installed capacity of 2,3 MG. Whilst about 57% is hydro power, about 32% is thermal and the rest comprises geothermal and emergency thermal power. Solar PV and Wind power play a minor role contributing 2%. However, hydropower has ranged from 38-76% of the generation mix due to poor rainfall. Thermal energy sources have been used to make up for these shortfalls, varying between 16-33% of the mix

Kenya’s current effective installed (grid connected) electricity capacity is 2,990 MW. Electricity supply is predominantly sourced from hydro and fossil fuel (thermal) sources. This generation energy mix comprises hydro at 838 MW, geothermal at 863 MW, 2% from biogas cogeneration, wind at 437 MW and solar at 173 MW. 8.6 million households in Kenya have been connected to the grid at the end of 2021, i.e, to over 75 percent of its population.

Households in Kenya use the following source for lighting:

• Electricity - about 15% of the national population.
• Use of electricity in urban areas as the source of lighting - 42%; although kerosene lamps still remain the main source of lighting for 55% of households.
• Kerosene for lighting in rural households - 87%

As of 2007, the contribution of the energy sector to the overall tax revenue was about 20%, equivalent to 4% of GDP. The sector provides direct and indirect employment to an estimated 16,000 persons. According to the 2019 Kenya Population and Housing Census, 50.4% total household depend on grid electricity followed by 19.3% on solar for lighting

It costs approximately Ksh 35,000 (EUR 318.18) to connect to the national grid and about 0.1145 EUR equivalent per kWh of electricity service. These are relatively high costs that pose a major obstacle to the expansion of electricity connections to low-income households and small businesses, which can therefore benefit from decentralized alternative sources of energy, such as solar. Also according ot the Kenya National Electrificaiton Strategy 2018, out of the 10.8 million households to be electrified, 9.7 are within the 15km of existing grid network while 1.1 milion are 15km or further from the main grid and are best served by off-grid energy.

►Go to Top

Renewable Energy

The record of the national utility Kenya Power and Light Company (KPLC) in rural electrification is very poor, with only 0.94% of rural households connected in 2002 [Karekezi et al, 2004]. Between 1993 and 2001 the number of rural households increased by 1.4 Million, whilst the number of rural households connected to the grid increased by only 24,000. Hence, the rate of grid-based rural electrification is far below the rate of increase in potential customers, despite a levy on electricity bills to fund it. Innovative approaches to off-grid electrification are helping to make up for the lack of grid-based rural electrification. One of the attempts to address this is the establishment of the Rural Electrification Authority (REA) in 2006 which now manages the rural electrification programme.

►Go to Top

Biomass

Due to increased poverty, there is a significant shift to non-traded traditional biomass fuels. The proportion of households consuming biomass has risen to 83% from 73% in 1980. As of 2007,Biomass Energy Resources in Kenya, i.e. firewood, charcoal and agricultural wastes contributed approx. up to 70% of Kenya’s final energy demand and provided for almost 90% of rural household energy needs, about one third in the form of charcoal and the rest from firewood. According to the 2019 Kenya Population and Housing Census, 55.1%  of Kenyan Houshold use firewood for cooking followed by 23.9% using LPG.

Charcoal, firewood, paraffin, and LPG continue to be the main sources of cooking fuel. In 2007, at the national level 68.8% of the households use firewood as the main cooking fuel. Almost 90% of the rural population is dependent on firewood for cooking and heating, whilst in urban areas approximately 10% of the population use firewood. Firewood is increasingly supplied from private smallholder lands and farm woodlots. Charcoal, on the other hand, is mainly an urban fuel, 82% of urban households depend on it as part of their energy mix, compared to 34% of households using charcoal in rural areas. It is estimated that Kenyans now consume 2.4 million tons of charcoal each year. A national charcoal survey showed that in 2004/2005 about 200,000 producers produced 1.6 million tons of charcoal, but only 45% of them claimed to be actively involved in resource generation. One set of biomass users includes educational institutions (primary and secondary schools, as well as colleges). Of Kenya’s 20,000 educational institutions, about 90% use wood fuel to prepare meals. Due to rising petroleum prices, recently also the industry gained more interest in wood based fuels

Charcoal is produced inefficiently using tradition earth kilns whose efficiency range between 10–13% yet higher recoveries of between 30-40% have been achieved using brick kilns. Biomass comes from various forest formations such as closed forest, woodlands,bushlands, wooded grasslands,farms with natural vegetation and mixtures of native and exotic trees, industrial and fuel wood plantations, and residues from agricultural crops and wood-based industries. However, although there are apparently large wood volumes available from the various vegetation types, not all of it is accessible for energy.Accessible wood depends on a number of factors such as legal issues, environmental issues, ownership, objectives of management, distance, and infrastructure . Additionally, most of the population are engaged in production, transformation, transportation and sale of wood and charcoal, making it one of the most important sources of paid livelihood. As a result woody biomass is diminishing due to poor management and utilization in unsustainable ways. Government ministries are supporting in one way or the other the sustainable production of energy crops, trade of charcoal and the dissemination of improved cooking stoves.

Kenya has the potential for generation of electricity from biomass sources generated from agricultural wastes from the sugar cane (biogas), sisal, timber (sawdust) and meat industries. The development of a bioenergy industry can improve energy security, reduce energy imports, and promote the agricultural and forestry sector by adding value to traditional crops. It further plays an important role in off-grid electrification of rural regions, can bring health benefits and reduce pressure on the environment. However, biomass feedstock can also endanger ecosystems and biodiversity, especially when being cultivated in monocultures. In plantations, large amounts of water are needed for irrigation and agrochemicals must often be added which can lead to water pollution. Therefore, it is essential to find a balance between opportunity maximization and risk minimization for which a well-defined regulatory framework is essential.

Despite the fact that traditional biomass dominates the energy landscape, little or no budget is provided for research, development and dissemination for heat and drought resistant crops, biofuels and modern biomass energy use. While some progress has been made in disseminating efficient wood and charcoal stoves, more needs to be done to building more diversity and strengthening the resilience of the energy system.

• For more information on challenges and issues affecting the exploitation of biomass in Kenya, click here.
• For information on biogas promotion experiences in Kenya, click here.

Biogas

Although there are several thousand biodigesters installed in Kenya, most of them operate below capacity or are currently in disuse due to management, technical, socio-cultural or economic problems.

Biogas is widely used in institutions due to their high potential of waste utilization for biogas generation. Several pilot programms have been established.

For further information, please refer to the following articles.

• Biogas Technology in Kenya
  
• Biogas Plant - Sisal cum Cattle Farm in Kilifi, Kenya
  
• Biogas Plant Projects in the Agricultural Sector of Kenya
  
• Agro Industrial Biogas in Kenya
  
• Electricity Generation from Biogas
  

►Go to Top

Biomass Stoves: Case Study

The energy-saving institutional stove project in the Mt. Kenya Region involved replacing open fire cooking systems in schools with heavy-duty, brick-insulated stainless steel stoves that require 60 - 70% less firewood. In doing so, schools save money on fuel costs and reduce smoke and emissions. In schools where children must collect firewood, the use of more efficient stoves allows children to spend more time studying.

• For more information on impacts and benefits of the projects, click here.

►Go to Top

Policy and Framework

National bioenergy targets:

The Energy Act, 2006: Municipal solid waste, renewable energy sources, co-generation for energy production, production and use of gasohol and biodiesel shall be promoted by the Minister of Energy and the Rural Electrification Authority.

The Energy Regulations, 2012: facility owners need to undertake energy audits, investment plans and measures for energy savings.

►Go to Top

Hydropower

Hydropower is the single largest generation source for grid electricity in Kenya providing some 677 MW of the total installed grid capacity. As of 2007, a 60 MW hydro generation plant was being developed on the Sondu Miriu with a further 20 MW planned for 2008. With the exception of Turkwell Gorge (Rift Valley) and Sondu Miriu (Lake Victoria) some 470 MW or 70% of the total developed hydro capacity lies on the Tana River alone, a conspicuous over reliance.

See: Hydropower Potential in Kenya

Solar Energy

Kenya has high insolation rates with an average of 5-7 peak sunshine hours (The equivalent number of hours per day when solar irradiance averages 1,000 W/m²), and receives an average daily insolation of 4-6kWh/m². Only 10-14% of this energy can be converted into electricity due to the conversion efficiency of PV modules.

On 12th June 2014 the magazine "Alternative Energy Africa" published: Kenya to Stop Taxing Solar. Kenya introduced a VAT on solar products totaling 16% in Q3 2013, but the government has now decided that it will dismiss this tax in a move to cut cost of renewable energy products. MP John Mbadi introduced the motion to nix the VAT in April, with it taking effect on May 30. Solar products in Kenya were already on the rise, and now expect to see even more products – particularly in the off-grid arena – grow even more.

Stand-alone PV systems represent the least-cost option for electrifying homes in many rural areas, especially the sparsely populated arid and semi-arid lands. “Solar home systems” (SHSs) are practical for providing small amounts of electricity to households beyond distribution networks.The systems typically consist of a 10 – 50 Watt peak (Wp) PV module and a battery sometimes coupled with a charge controller, wiring, lights, and connections to small appliances (such as a radio, television, or mobile phones). Other PV applications include water pumping, telecommunications and cathodic protection for pipelines, power supply to off-grid non-commercial establishments and off-grid small commercial establishments.

Kenya has one of the most active commercial PV system market in the developing world, with an installed PV capacity in the range of 4 MW. An estimated 200,000 rural households in Kenya have solar home systems and annual PV sales in Kenya are between 25,000-30,000 PV modules. In 2002, total PV sales were estimated to have been 750 kWp and have grown by 170% in 8 yrs, even without government intervention or policies to promote the uptake of PV technology.

In comparison, the Kenya’s Rural Electrification Fund, which costs all electricity consumers 5% of the value of their monthly electricity consumption (currently an estimated 16 million US$ annually), is responsible for 70,000 connections. With access to loans and fee-for-service arrangements, estimates suggest that the SHS market could reach up to 50% or more of un-electrified rural homes.

Since 2006-2007, the Ministry of Energy has been actively promoting use of solar energy for off grid electrification. In particular, it has funded the solar for schools programme and is targeting to extend this to off grid clinics and dispensaries. Grid connected PV systems covering an area of 15-20 km²(3% of the Nairobi area) could provide 3801 GWh of electrical energy a year, equivalent to the total grid electricity sales for Kenya in 2002-2003. The costs, however, are prohibitive.There are about 4 million households in rural Kenya alone which present a vast potential for this virtually untapped technology. The off grid market is estimated to be over 40MW.

►Go to Top

Solar Home Systems (SHS)

An estimated 200,000 rural households in Kenya have solar home systems. This success has been largely due to private sector activity. The high level of uptake has been through the sale of products that best fit the purchasing power of rural households, and by making these products available within the mobility range of potential customers, typically less than 40km from the customers home .

In mature market areas, such as central and western Kenya, between 20 and 40% of households have systems. Most units are in the power range of 10 to 20 Wp. With prices being as low as US$50, the products have been affordable by medium class families without a need for subsidies and credit. However, financial assistance will be necessary for poorer families to be able to afford an SHS. Most of the SHS traders started selling these products in the 1990s.

As the Kenyan business culture is mainly based upon imitation, once a few shops had been convinced by the Nairobi based distributors, businessmen all over the country replicated their success by selling systems. The level of competition is high with over 800 rural outlets, and by shopping around even the least informed end-user will buy at a reasonable price. Information from friends and relatives is currently the main source that new customers turn to for advice on the best system to use, as the shopkeepers are rarely trusted. More needs to be done to both help customers understand the importance of purchasing quality systems and to help purchasers to identify them. The high level of sales demonstrates the effectiveness and efficiency that the private sector can bring to disseminating SHS – success that has yet to be matched by any utility or donor programme.

• For information on challenges and issues affecting the exploitation of solar energy in Kenya, click here.

►Go to Top

Solar Hybrid mini-grids

Currently (as of 2016), only about 50 percent of the Kenyan people have access to electricity. In remote areas electrification rates can be as low as 5 percent. Improving the access to modern energy services in rural areas remains a major development priority. In order to achieve this goal complementary solutions to grid extension, such as solar-hybrid mini-grids are necessary.

The GIZ project Promotion of Solar-Hybrid Mini-Grids (GIZ ProSolar) aims at promoting mini-grid electrification of remote areas in Kenya with the participation of private sector. The vision is to increase levels of cost-effective, affordable and sustainable rural electrification through private sector leadership.

Achievements

- The Talek Power mini-grid is a pilot project set up in Talek in close cooperation with the Narok County Government and the German Agro Action. The mini-grid consists of a 50 kW solar-hybrid generation power plant, combining PV modules, battery packs and a diesel generator. The pilot tests the social and economic viability of mini-grids and serves as a learning scheme for stakeholders.

- An advanced training course has been developed for solar technicians, qualifying them to install hybrid solar systems in villages. The technicians receive their hands-on training at a 10kW solar-hybrid demonstration system, which was installed at Strathmore University.

- Practical handbooks for site section, licensing, system sizing and financing of mini-grids, which share lessons learned from practical testing, have been developed in collaboration with government institutions.

- ProSolar assisted Marsabit and Turkana Counties in the development of energy sector plans, which serve as a benchmark in strategizing, mapping and monitoring the distribution and use of energy within the county. Furthermore, the MoEP has been supported in developing a coherent framework for county energy sector plans.

- In a competitive tendering process private developers have been selected to receive financing through the Result-based-funding (RBF) component for developing three mini-grids in Turkana County. 

• For more information on the ProSolar project, you can click here for the 2016 factsheet, here for the official page of the project in the GIZ portal and here to find the publications of ProSolar within the Energy Regulatory Commission (ERC) Renewable Energy Portal.
  

►Go to Top

Solar Energy: Case Study

In 1995, the US-based group 'Solar Cookers International' (SCI) started a pilot project in Kakuma that addressed this problem by providing refugees with portable, lightweight solar cookers called 'CooKits'. The project Solar Cookers: Expansion of Solar Cooking Program at Kakuma Refugee Camp, Kenya distributed the CooKits and taught people how to use them effectively. The aim was to demonstrate that solar cooking was a practical alternative that would save both money and wood.

• For more information on the impacts and benefits of the project, click here.

►Go to Top

Wind Energy

The Equatorial areas are assumed to have poor to medium wind resource. This could be a general pattern for Kenya. However, some topography specifics (channeling and hill effects due to the presence of the Rift Valley and various mountain and highland areas) have endowed Kenya with some excellent wind regime areas. The North West of the country (Marsabit and Turkana districts) and the edges of the Rift Valley are the two large windiest areas (average wind speeds above 9 m/s at 50 m high). The coast is also a place of interest though the wind resource is expected to be lower (about 5-7 m/s at 50 m high). Many other local mountain spots offer good wind conditions. Due to monsoon influence, some seasonal variations on wind resource are expected (low winds between May and August in Southern Kenya).

It is expected that about 25% of the country is compatible with current wind technology. The main issue is the limited knowledge of the Kenyan wind resource. The meteorological station’s data are quite unreliable while modern measurement campaigns have started recently for investigating wind park locations. Kenya has 35 metrological stations that are spread all over the country. Information gathered is not adequate to give detailed resolutions due to sparse station network.

There is significant potential to use wind energy for grid connected wind farms, isolated grids (through wind-diesel hybrid systems) and off-grid community electricity and water pumping. Kenya has recently experienced a surge in wind energy installations for electricity generation. The largest windfarm (300MW) in Africa is being constructed in Turkana area of North Western Kenya. The Ngong hills area of close to Nairobi also has 5.1 MW installed and several MW planned by private investors. An average of 80-100 small wind turbines (400 W) have been installed to date, often as part of a Photovoltaic (PV)-Wind hybrid system with battery storage.

Wind pumps are more common than wind turbines, 2 local companies manufacture and install wind pumps. As of 2007, the number of installations was in the range of 300-350.

• For information on challenges and issues affecting the exploitation of wind energy in Kenya, click here.

►Go to Top

Wind Energy: Case Study

Two manufacturers in Kenya have pioneered the local manufacture of wind pumps and wind generators in Kenya, Bobs Harries Engineering Limited (BHEL) and Craftskills Entreprises, and are providing local energy solutions for off grid households and institutions.

• For more information about the project,click here.
• For more information about the impacts and benefits of the project, click here.

►Go to Top

Geothermal Energy

Kenya is endowed with geothermal resources mainly located in the Rift Valley. It is estimated conservatively that the Kenya Rift has a potential of greater than 2000 MW of geothermal Power. Geothermal utilization first started by drilling two wells in 1956 in Olkaria I and was followed by increased interest in the 1970s. Initial production started in 1981 when the first plant of 15MW was commissioned in Olkaria I .Currently 45MW is generated by Olkaria I geothermal power station, 70 MW by Olkaria II (both operated by KenGen) and an IPP is producing 12Mwe at Olkaria III. KenGen and the IPP produce a total of 129 MW of geothermal energy and this is expected to increase to 576MWe within the next 20 years. The national geothermal potential is estimated at between 7,000 and 10,000 MW.

In Kenya's Least Cost Power Development Plan, geothermal power has been identified as a cost effective power option and the Geothermal Development Company (GDC) was set up to fast track harnessing Kenya's vast resources. Explorations for geothermal energy in the high potential areas of the Kenyan Rift are now ongoing. KenGen, together with the Ministry of Energy conducted surface scientific studies in Suswa, Longonot, Eburru, Menengai, Arus and Bogoria, Lake Baringo area, Korosi and Chepchuk, and Paka. Preliminary results indicate significant potential of geothermal power in these prospects. Six exploratory wells were drilled at Eburru. Recent studies show that the Eburru area can sustain 25 MW of electric power. More exploration work is expected to begin in Silali in September 2007. Other high potential areas earmarked for further exploration work in the north rift include Emurauangogolak, Barrier volcanoes, Namarunu volcanic field, and Badlands Volcanic field and Lake Magadi geothermal area in the South, among others. The GDC is now responsible for their development.

• An up to date map of the various sites can be viewed here.

►Go to Top

Fossil Fuels

Petroleum is Kenya’s major source of commercial energy and has, over the years, accounted for about 80% of the country’s commercial energy requirements. In 2006, 4.4 million cubic meters in petroleum products were sold in Kenya. Of this 420,000 m³ was kerosene and 68,000 m³ was LPG. Total petroleum consumption in Kenya has grown from 2.6 million cubic meters in 2003 to 3.73 million cubic meters in 2006. The consumption maintains an upward trend. As of 2009, demand for petroleum products was 3,656 thousand tonnes. As of 2007, Kenya had one refinery, the Mombassa refinery, with a nameplate capacity of 90,000 barrels per day. Since its commission the refinery has not operated at full capacity.

As of 2007 there were 4 prospective petroleum basins in Kenya, about 30 exploration wells had been drilled and although none has encountered a commercial discovery, a number of drill stem tests have recovered or tested gas. In 2012 significant oil reserves were discovered in North Western Kenya. Studies are still being carried out to establish the economic feasibility.

• For more information, see Fossil Fuel Resources in Kenya.

►Go to Top

LPG

Consumption of LPG has increased by about 59% between 2003-2008 from 40,000 to 80,000 metric tons/year. The Kenya Petroleum Refinery makes about 30, 000 metric tons of LPG and to balance growing demand reliance on imported LPG has increased. However, there are plans underway to upgrade the refinery to make 115,000 metric tons of LPG.

►Go to Top

Coal

The Ministry of Energy has identified two areas with possible commercially exploitable quantities of coal. These are the Mui basin of Kitui and Mwingi Districts and Taru basin of Kwale and Kilifi Districts. As of 2007, 10 wells have been drilled in Mui basin with encouraging results indicating possible existence of commercial quantities of coal.

• For more information on fossil fuel resources in Kenya, click here.

A 1,050 MW coal-fired power plant has been proposed in Lamu, the north coast of Kenya along the Indian Ocean, as part of the Lamu Port-Southern Sudan-Ethiopia Transport Corridor (LAPSSET) project linking the three countries.  

►Go to Top

Key Problems of the Energy Sector

Only 6% of Kenya's land is forest. Large areas of these forest resources are not accessible due to legal or environmental restrictions, ownership, management issues, distances or infrastructure. Fuelwood demand in the country is 35 million tons per year while its supply is 15 million tons per year, representing a deficit of 20 million tons. The massive deficit in fuelwood supply has led to high rates of deforestation in both exotic and indigenous vegetation resulting to adverse environmental effects such as desertification, land degradation, droughts and famine among others. It is in an effort to reduce these problems that PSDA through collaboration with other Development Partners initiated “Promotion of Improved Energy Stoves” in January 2006. Nevertheless, a high population share still uses firewood for cooking – more than 80% of the population use traditional three stones technology for the same.

In the first phase of the EnDev programme, GTZ disseminated a significant amount of improved cook stoves (ICS). In addition GTZ promoted the uptake of ICSs by institutions. However, many people without improved stoves still do not know where to get them although they express desire to acquire them. Current improved stove production centres do not meet the demands of the new project areas, especially in the arid and semi-arid regions which need them more than any other regions in the country. This has largely contributed to unsustainable harvesting of biomass with negative impacts on the environment and poor health among users due to excessive inhalation of noxious gases. Up-scaling of improved cook stoves is therefore necessary.

Identified Key Challenges

The policy has identified a number of key challenges these include:

• Upgrading and expanding the current energy infrastructure
  
• Promoting energy efficiency and conservation
• Protection of environment
• Mobilizing requisite financial resources
  
• Ensuring security of supply through diversification of sources and mixes in a  cost effectivemanner (not substitution – which is unrealistic)
• Increasing accessibility of energy services - not only electricity - to all segments of the population
  
• Institutional corporate governance and accountability
• Enhancing legal regulatory and institutional frameworks to create consumer and investor confidence
• Enhancing and achieving economic competitiveness
• Effectively mainstreaming the rural energy issues – framework unclear on how rural energy will be addressed. Rural energy suffers low priority and status in both planning and development resource allocation.
• Disproportionate promotion of fossil fuels and grid electricity

Power Africa lists the following four as the biggest Issues and Bottlenecks in Kenya:

1. Inadequate access to project financing, especially early stage risk capital
2. Land risks, Right-of-way and community engagement (both Generation & Transmission)
3. Long procedures and inconsistency in approval of Power Purchase Agreements (PPAs)
4. Lack of clear off-grid regulatory framework

In 2020, Sustainable Energy for All (SEforALL), ODI, Catholic Agency for Overseas Development (CAFOD) identified the following issues with current social assistance mechanisms: (see also Publication - Energy Safety Nets: Kenya Case Study)

• Promoting energy access (connections) is in-herently different from promoting energy use(consumption). Programs supporting the formermainly involve a one-off investment, while thosesupporting the latter mainly provide recurringsupport.
• The work of the National Safety Net Programme(NSNP) to identify and target beneficiary house-holds can inform the design and implementationof future energy safety nets (ESNs) in Kenya.
• Gender considerations have not been integralto the planning and implementation of Kenya’sESNs, although energy access impacts men andwomen differently. Interventions to promote en-ergy access and use should target the householdmember most affected, recognizing that this maynot be the household’s energy decision maker.
• The lifeline electricity tariff as currently designedsupports consumption by poor and vulnerablehouseholds but is an inefficient mechanism fordoing so given its support for many non-poorhouseholds.

►Go to Top

Policy Framework, Laws and Regulations

The energy policy for Kenya was adopted in 2004, but recently high oil prices and need for energy security have become more urgent drivers for alternative energy. A new energy policy was drafted in 2015, but awaits adoption by Parliament. For Kenya, high oil prices and the need to increase overall energy per capita supply are strong motivators for development of alternative forms of energy. Transportation fuels remain the most emotive of all energy segments, especially when prices are going up, as this is where lifestyles and livelihoods are visibly impacted. Alternative energy is not only focusing on economics alone,  but also looks at security of supply and their social economic benefits to the country.

A number of options are being considered:

• The proposed grass-root Garsen sugar project ( bio-ethanol)
• The government and stakeholders are planning to introduce bio-diesel for both rural energy use and for blending into automotive diesel.
• Expansion of the geothermal power supply
• Exploration of the coal deposits in Mui basin of Kitui and Mwingi districts.

Up until the 7th of October 2004, when the Sessional Paper No. 4 was passed in Parliament, Kenya operated without a comprehensive energy policy.

Three key legislations that have been in application all addressing the commercial energy sub sector:

• Electrical Power Act of 1997 currently under review
• Petroleum Act Cap 116 – regulates importation, transportation and storage
• Petroleum Exploration and Production Act – prior to the deregulation of the petroleum sub-sector, this was the legislation that the government used to control pricing of petroleum products

In addition to these, there is other legislation relevant to operations within the energy sector:

• Licensing Act – for licensing of operators in for instance in the petroleum and electricity sectors
• Standards Act
• Environment management and coordination Act
• Local Government Act
• Physical Planning Act
• Weights and measures Act
• Monopolies Act

The relevant policy and legal framework for solar energy in Kenya includes:

• Session Paper No. 4 on Energy of Kenya
• Energy Act 2006
• Kenya rural electrification master plan
• Kenya Vision 2030
• The Kenya National Climate Change Response Strategy

The Energy Act 2006, sets out the National Policies and Strategies for short to long-term energy development. Whether or not it is adequate to fulfill Kenya’s vision of emerging as a newly industrialized country by 2020 remains to be seen. Strong regulatory and legislative frameworks are required to manage the activities required to achieve this vision. The Energy Regulatory Commission (ERC) was established as an Energy Sector Regulator under the Energy Act of 2006 in July 2007. ERC is a single sector regulatory agency, with responsibility for economic and technical regulation of electric power, renewable energy, and downstream petroleum sub-sectors, including tariff setting and review, licensing, enforcement, dispute settlement.

The broad objective of the new Energy Policy is to ensure the provision of adequate, quality, cost-effective, affordable supply of energy while ascertaining environmental conservation.

Kenya does not provide incentives or subsidies for household solar PV systems. Although some strides have been made to improve energy efficiency and renewable energy in Kenya by the government, some planned reforms in the Energy Act are yet to be effected. These include:

• Establishment of a Centre of Excellence for Energy Efficiency and Conservation
• Establishment of energy and equipment testing laboratories
• Development of standards and codes of practice on cost-effective energy use

Stockholm Environment Institute (SEI) conducted a study on the economic impacts of climate change in Kenya in 2009 and found that the country’s greenhouse gas emissions are rising quickly. The energy sector emissions are estimated to have increased by as much as 50% over the last decade. As such, Kenya’s Climate Change Response Strategy is keen to reduce these impacts through various avenues including promoting use of environmentally friendly energy.

►Go to Top

►Go to Top

Strategic Actions

In line with achieving the policy objectives strategic actions need to be taken:

• Training and technology transfer – to build up local/rural capacity for small scale development which could subsequently be built up and strengthened
• Campaigns for identifying exploitable schemes and establishing feasibility
• Technical support for and financing of demonstration schemes to familiarize local personnel with the various technologies
• Permit gaining operating experience as well as provide an initial basic electricity supply for the local population
• Develop skills Project planning, implementation and monitoring.

In addition, energy planning activities should integrate socio-economic, cultural and environmental aspects, which is only possible through strong links between policy makers, implementers and researchers - research findings are infrequently incorporated during the decision making process of policy development.

Although economic survey findings, and findings from donor funded projects or studies have been used as references in policy development, whether or not these are sufficient is questionable. Little attention is paid to University based research findings. These studies are often the source of economic surveydata, but receive little or no recognition. Policy makers need to actively engage researchers and there is great need to move towards evidence based policy and decision-making - policymaking is not an experimental process.

►Go to Top

The New Energy Policy

The New Energy Policy is as a result of the Government recognising that the energy sector plays a key role in the achievement of GoK’s socio-economic strategies. It lays the policy framework for the provision of cost-effective, affordable and adequate quality energy services on a sustainable basis.

Some of the key policy proposals are:

Legal and Regulatory Framework

• The enactment of an Energy Agency (EA) to facilitate prudential regulation, enhance stakeholder interests and boost investor confidence. It will consolidate EPA, 97 and the Petroleum Act Cap 116; and bring under its purview the other energy sources not currently covered by other legislations.
• Establishing a single independent energy regulator.

Institutional Arrangements

• Creation of a Rural Electrification Authority to accelerate rural electrification
• Promotion of privately or community owned energy service entities operating renewable energy power plants /hybrid systems
• Establishment of astate owned Geothermal Development Co. to undertake geothermal resource assessment and development and to sell steam to generating entities

Energy Trading Arrangements

• Creation of a domestic power pool with provision for wholesale and retail market to create competition and hence reduce cost of electricity7
• Streamlining biomass energy trading arrangements
• Increasing lifeline tariff to recover the cost of electricity generation
• Divestiture of GoK from oil refining, marketing and transportation in favour of private sector investments in the same

Energy Security

• Financing of 90-day-demand strategic petroleum stocks by GoK and the private sector
• Encouraging wider adoption and use of renewable energy technologies to enhance their role in the energy supply matrix
• Formulation of plans for biomass energy development
• Development of a national energy research agenda

The Energy Act 2006 is a consolidation of the Electric Power Act and the Petroleum Act 2000, and has a section on petroleum and a section on electricity. The energy policy already recognizes the biomass sector and how biomass regulation should be done in terms of pricing and sets a good basis for drafting the biomass plan. It also recognizes the importance of renewable energy and energy efficiency.

Other Policy

Tax policy

Kenya introduced a VAT on solar products totalling 16% in 2013, but the government in 2014 decided to remove this tax in an attempt to cut cost of renewable energy products.

On 23 July 2020, Kenya has passed a Finace bill that will introduce a 14% VAT on all off-grid solar products.

On 30 June 2021, the H.E. President Uhuru Kenyatta signed the Finance Act 2021 which excepmpts VAT on renewable energy products including solar and wind generation equipment, and clean cooking solutions.

Kenya National Electrification Strategy (KNES) 2019

KNES provides a roadmap for achieving universal access to electricity for all Kenyans by 2022. It includes least-cost options for bringing electricity to households and businesses throughout the country. KNES has been developed by the Kenyan Government in partnership with the World Bank and was launched in January 2019.

Gender Policy in Energy

• https://energy.go.ke/wp-content/uploads/2019/10/Gender-Policy-in-Energy.pdf

►Go to Top

Institutional Set up in the Energy Sector

Ministry of Energy and Petroleum (MoEP)

• Energy Policy and Development

Energy Regulatory Commission (ERC), Ministry of Energy and Petroleum, Local Authority and Kenya Revenue Authority

• Licensing

Kenyan Energy Generation Company (KENGEN)

• Generation (mainly geo-thermal and hydro power plants)

Kenya Power

• Distribution ofgrid connected power

Kenya Electricity Transmission Company Limited (KETRACO)

• Plans, designs, builds, operates and maintains electricity transmission lines and associated substations that form the backbone of the national grid
  

Kenya Bureau of Standards

• Standards

National Environmental Management Authority

• Environmental Management and Coordination

Ministry of Planning, Local Authority

• Physical Planning

Rural Electrification Authority and Ministry of Energy and Petroleum (REA)

• Rural Electrification

►Go to Top

Institutions Dealing with Rural Electrification and Solar

Kenya Renewable Energy Association (KEREA)

This is a membership association founded to lobby and advocate for issues relevant to the renewable energy sector in Kenya.

Kenya Solar Technician Association (KESTA)

Another membership association that was founded in 2006 to galvanise the activities of freelance solar technicians and advocate for effective solar business especially at grass root level (rural areas).

The Task Force on Accelerated Green Energy Development at the Prime Minister’s (PM) office

A committee that was founded to fast track development of green energy for achievement of national development goals, particularly realization of Kenya Vision 2030. This is mainly through assisting with mobilization of technical and financial resources for the implementation of green energy programs and projects, including public private partnerships and favorable carbon finance projects.

►Go to Top

Activities of Donors:

One of the leading agencies supporting developments in the energy sector in Kenya is the U.S. Government's Power Africa project. Launch in 2013, Power Africa brings together technical and legal experts, the private sector, and governments from around the world to work in partnership to increase the number of Africans with access to power.

Power Africa’s goal is to add more than 30,000 megawatts (MW) of cleaner, more efficient electricity generation capacity and 60 million new home and business connections in Sub-Saharan Africa.

POWER AFRICA’S ENGAGEMENT IN KENYA

MW GENERATION

Power Africa supports power sector development in Kenya through a combination of financing, transaction and technical assistance, advocacy, and investment promotion. Power Africa helps advance power projects in the pipeline by raising debt and equity financing, assisting in PPA and Government Letter of Support negotiations, and providing technical and financial advisory services. Its work to mobilize over $1 billion in private investment addresses a significant hurdle for many projects and will accelerate power projects across technologies. Through the U.S. Trade and Development Agency, Power Africa has provided grants and assistance worth $6.5 million to support the development of eight new energy projects totaling 281 MW in Kenya.

CONNECTIONS

The Grid Management Support Program will enable Kenya to address key challenges of integrating intermittent renewable energy into the national grid. Power Africa has used innovative financial solutions, such as the USAID Development Credit Authority, to Support grid connections and small on-grid power generation projects. In the off-grid sector, dedicated Power Africa advisors provide targeted technical assistance to over 40 small-scale renewable energy providers, assisting them with market Development and funding, among other priorities. Additionally, in partnership with General Electric, the African Development Bank, and others, Power Africa already awarded eleven grants of $100,000 each to innovative renewable energy projects in rural Kenyan communities as part of the Power Africa Off-Grid Energy Challenge.

SUCCESS STORY

In partnership with the Kenyan Ministry of Energy and Petroleum, Power Africa supported the formation of a high-level Financing Steering Committee with Kenya’s energy sector parastatal companies and leading private sector partners to explore ways to overcome the estimated $14-18 billion funding gap necessary to achieve the government’s generation, transmission, distribution, and off-grid electrification targets. The Committee provided a unique forum for public-private dialogue and strategic problem solving to overcome sector hurdles. Its policy recommendations have become a roadmap for Power Africa programming and the entire power sector in Kenya.

AFD

Another leading agency supporting the development of the energy sector in Kenya is the French Agency for Development - Agencefrançaise de développement (AFD). They support several initiatives including:

• Conversion of diesel generators into hybrid generators (wind, solar, biomass,) and construction of new generators and associated mini-grids in rural areas.
• Scaling up of a pilot revolving fund to enhance connectivity in Kenya, complemented by a CFL distribution component
• Support to the Geothermal development company and funding of a national master plan
• Credit line to commercial banks to promote renewable energy and energy efficiency projects in the agri-business and hostelry sectors

Kenya Green Mini-grids Facility

This DFID funded programme started in 2014 and ended in march 2020. It then continued in the second phase as part of the Africa Clean Energy (ACE) program. This facility is suporting three developers (Powerhive, RVE.Sol and PowerGen) and expects to deliver 13000 connections in 4 Kenyan Counties.

In 2019, the following new connections were added:

Powerhive	2000 connection in existing and 4 new sites Promotive PUE including testing new approaches for electric vehicles on mini-grid
RVE.Sol	1850 connections and 10 sites
PowerGen	2300 connections and mini-grids in 13 sites

All three developers have agreed on tariffs with the regulators wihc are viable and higher than the grid tariff.

►Go to Top

Kenya Off-Grid Solar Access Programme (KOSAP)

This World Bank's program is focused on customers that are dispersed and hard to reach in the dry areas in northern and eastern part of Kenya. It is aiming at 151 sites in 14 counties and the call fro proposals is expected to be out by mid 2020.

EnDev's Result-based Financing (RBF) Support

Endev's RBF intervention was targeted in the north of Kenya and concluded in March 2020. The programme delivered 1845 connections and 10 mini-grids. Click here to read EnDev's lessons learnt from the mini-grid programme in Kenya and Rwanda.

Further Information

• The Energy Act 2006
• Kenya Energy Policy Overview
• Kenya: Integrated assessment of the Energy Policy
• Kenya Country Report
• Mobile Phone Market in Kenya
• Disseminating Wind pumps in Rural Kenya - Meeting Rural Water Needs using Locally Manufactured Wind pumps.
• SWERA (Solar and Wind Energy Resource Assessment) Programme
• Least Cost Power Development Plan
• SREP Draft Investment Plan-May 2011.pdf Renewables Investment Plan for Kenya
• Geothermal Development Company of Kenya
• Feed-in tarriffs for renewables in Kenya
• External information sources for Kenya
• ProSolar handbooks: site selection, licensing, system sizing.
• ProSolar 2016 factsheets: ProSolar project, Mini-Grids Result Based Financing (RBF) project.
• USAID Power Africa Kenya Factsheet
• Kenya goes all out for renewable energy
• Publication - Energy Safety Nets: Kenya Case Study (2020) and the policy brief
• Kenya National Electrification Strategy 2018
  
• Policy Alert: Kenya Introduces VAT on Off-Grid Solar Products
• Case study: "Analysis of Quality Infrastructure offered in Kenya and Potential for Development" with insights into quality assurance for renewable energies in the context of climate change mitigation and adpation; as part of the publication "Quality Infrastructure for Climate Change Mitigation and Adaptation to Climate Change: Potentials, Opportunities and Chances in Sub-Saharan Africa." PTB, 2019

►Go to Top

References

• Kenya Sources page

►Go to Top