Republic of Kenya

EAPIC

1

POWER SECTOR

DEVELOPMENT IN KENYA

Eng. Joseph K. Njoroge, Principal

Secretary

27th August, 2015, KICC, Nairobi, KENYA

MISSION & VISION

… to facilitate provision of :

• clean,

• sustainable,

• affordable,

• competitive and

• secure energy

for national development while protecting the environment …

Mission

… affordable, competitive

quality energy for all

Kenyans …

Vision

Summary of Key Programs

1. 5000+ MW Power Generation Program

2. Transmission & Distribution infrastructure to support the

5000+MW

3. Electrification of all primary schools in Kenya to support

equal opportunities for all our Children

4. Last mile electrification strategy to reach 70% of

households by 2017 and to reach all by 2020

5. Regional power inter-connectors that include Lesso-

Tororo 400 kV line, Isinya - Arusha 400 kV line and

Kenya - Ethiopia 500 kV DC link which are all funded

6. The development of the crude oil pipeline from Lokichar

to Lamu

3

KENYA ENERGY SECTOR

Petroleum

Electricity

Ministry of

Energy &

Petroleum

(responsible for

policy matters)

KenGen (74%

GoK) - (1639MW)

IPPs (572MW)

Upcoming IPPs

Generation

Transmission

(KETRACO)

Energy

Regulatory

Commission

(ERC)

(responsible

for regulating

the energy

sector)

Marketing

(NOCK)

Private)

Transportation

(KPC)

Refinery

(KPRL)

Rural

Electrification

(REA)

New Energy Bills

being enacted to

align the sector to

the New

Constitution…

Distribution

(KENYA

POWER)

Geothermal Development Company(GDC) established

in 2009 to accelerate Geothermal Resource

Assessment

Energy Tribunal

Source: Ministry of Energy, Sector LCPDP Plan 2011-2030

KENYA VISION 2030 POWER DEMAND PROJECTIONS

2 300

4 700

7 900

15 400

19 900

33 300

1 800

3 100

5 400

11 900

17 600

26 500

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Projected Capacity (MW) Peak Demand (MW)

2013 2015 2018 2023 2027 2030 2016

4,800

6,400

Focus of

GoK 40-

Month

Strategy

CURRENT GENERATION CAPACITY

Installed MW Effective MW

Hydro 820.7 797.6

Geothermal 588.0 579.9

Thermal

(MSD) 633.0 614.5

Temporary

Thermal

(HSD) 30.0 30.0

Thermal ( GT) 60.0 54.0

Wind 25.5 25.5

Cogeneration 26 21.5

Interconnect

ed System 2,183 2,123

Off grid

thermal 26.4 23.1

Off grid wind 0.55 0.55

Off grid solar 0.55 0.55

Imports 0.000 0.0

Total

Capacity MW 2,211 2,147

Hydro 37.2%

Geothermal 27.0%

Thermal (MSD) 29.7%

Temporary Thermal

1.4%

Thermal ( GT)

2.5% Wind 1.2%

Cogen. 1.0% Solar

0.0% Imports

0.0%

% (effective)

ENERGY GENERATION DISPATCH

BY SOURCE

Hydro 37.8%

Geothermal 47.8%

Diesel 13.0%

TPP's 0.5%

Cogen 0.0%

GTs 0.0%

Wind 0.4%

Solar 0.0%

Imports 0.6%

40-MONTH GOVERNMENT 5000+MW STRATEGY

NEW CAPACITY ADDITIONS (MW)

TIME IN MONTHS 6 12 18 24 30 36 40 TOTAL

Hydro 24 - - - - - - 24

Thermal 87 163 - - - - - 250

Geothermal 90 176 190 50 205 150 785 1,646

Wind - - 20 60 300 250 - 630

Coal - - - - 960 - 960 1,920

LNG - - - 700 350 - - 1,050

Co-Generation - - 18 - - - - 18

Total 201 339 228 810 1,815 400 1,745

Cumulative

Additions 201

540

768 1,578

3,393 3,793 5,538

8

TARGET TARIFF PROGRESSION

1664

2342

5017

6762

14.14

12.49

11.03

9.03

9.00

19.78

17.73

13.46

11.19 10.43

-

5

10

15

20

25

0

1000

2000

3000

4000

5000

6000

7000

8000

0 6 12 18 24 30 36 40

Tarif

f P

ro

gressio

n

(U

SCts

/kW

h)

Cu

mu

lati

ve I

nsta

lled

Cap

acit

y (

MW

)

Month

Cumulative Capacity (MW) Industrial/Commercial tariff (US¢/kWh) Domestic Tariff (US¢/kWh)

37% reduction Industrial tariff

47% reduction Domestic tariff

Means of Developing Projects

Under Least Cost Power Development Plan(LCPDP)

Under PPP framework- competitive or privately initiated investment proposals

Under Feed-in Tariffs Policy (FiT)

10

Geothermal Resources in Kenya

• Suswa, • Longonot, • Olkaria, • Eburru, • Menengai, • Arus-Bogoria, • Lake Baringo, • Korosi, • Paka, • Lake Magadi, • Badlands, • Silali, • Emuruangogolak, • Namarunu • Barrier • Mwananyamala • Homa Hills • Nyambene Ridges • Chyulu Hills

Suswa, Longonot, Olkaria, Eburru, Menengai, Arus-Bogoria, Lake Baringo, Korosi, Paka, Lake Magadi, Badlands, Silali, Emuruangogolak, Namarunu Barrier Mwananyamala Homa Hills Nyambene Ridges Chyulu Hills

5000+MW GEOTHERMAL OPPORTUNITIES

Block Project Capacity

(MW) Status

Olkaria

Field

Olkaria I Unit 6 70 Financing ongoing, then EPC

Tendering

Olkaria V 140 Financing ongoing, then EPC

Tendering

Olkaria VI 140 JV Partnership procurement

ongoing

Menengai

Field

Menengai II 60 Steam Gathering System

Menengai III 100 Steam Gathering System

Menengai IV 100 Steam Gathering System

Menengai V 100 Steam Gathering System

Suswa and

Baringo-

Silali Field

Suswa 150 Steam Gathering System

Baringo-Silali 200 Steam Gathering System

1060

Renewable Energy Projects

• Generation of projects under Feed-in Tariffs

• Standard PPAs and Connection Guidelines prepared

• GoK facilitating investors with resource assessment

• Wind data logging on-going, to install 100 metre mast in high potential areas for pre-investment data

• National atlas on small hydro almost ready 13

Jan 2013 14

Feed-in-Tariff (FiT) Policy • Instrument to promote generation of electricity

from Renewable Energy sources

• FiT Policy established in April 2008 and reviewed in Jan 2010, and Dec 2012

• Reviews to accommodate new technologies, as well as changes in cost of equipments and money

• Model PPA and Connection guidelines also done

• Exploring the implementation of Energy Auctions

14

TRANSMISSION LINES • Various Transmission lines: Regional

Interconnectors; to Evacuate the 5000+ MW; Extend the Grid; or Strengthen the Grid Network

• Participation in several ways:

• Engineering, Procurement & Construction (EPC) contractors

• Engineering, Procurement & Construction + Financing (EPC+F) contracts

• Consultancy Services

15

RAPID CUSTOMER CONNECTIVITY

2020:

Universal Access

2017: 70% Access

2015: 3.6 million customers

2014: 2.77 million customers

2013

2.33 million customers

41%

Access

37%

Access

29%

Access

Last Mile Connectivity Project

• Programme entails extending low voltage power lines to areas close to customers for ease of connection.

• This is expected to lead to accelerated enhancement of connectivity in a very short period.

• Successful implementation will result in connectivity increasing from the current 41% to between 70% in the next five years

27/08/2015 17

Last Mile Connectivity Project......(2)

• It is estimated to cost US$ 1 billion

• Development partners have so far committed:

– AfDB USD 150 million

– World Bank USD 150 million

– AFD Euro 70 million

• Reaching out to other Development Partners-DANIDA, JICA, EIB, KfW

• Implementation by KPLC and REA

27/08/2015 18

19

Hybrid System

• Commenced installing solar/wind hybrid systems at off-grid power stations to reduce fuel costs

• Solar hybrids at Lodwar(60kW), Hola (60kW), Merti (10kW), Elwak (50kW) and Mandera (300KW)

• Wind hybrids at Marsabit(500kW) • Solar/Wind hybrid at Habaswein (50kW wind, 30kW

solar) • Solar hybrids in Takaba and Rhamu for 50kW plants • To do more, with funds from GoK, AFD, World Bank,

Nordic Development Fund, KfW, other partners

Conclusion

• Favourable policy and regulatory frameworks for energy provision

• GoK is committed to increasing access to modern energy, and will use Renewable Energy solutions as much as possible

• Development partners and the Private Sector are key partners in energy provision, and as such are Encouraged and Facilitated to participate in energy sector in Kenya

THANK YOU …