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PRESENTATION TO THE INTERNATIONAL CONFERENCE ON PLANNING & THE

BIG FOUR.

OVERVIEW OF THE ENERGY SECTOR IN KENYA AS AN ENABLER TO THE BIG

FOUR AGENDA

Mr. Dickson Murira

Central Planning and Project Monitoring Unit ,

Ministry of Energy

MISSION & VISION OF MOE

… 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

KENYA ENERGY SECTOR

Electricity

Ministry of

Energy

(responsible for

policy matters

on energy)

KenGen (74%

GoK) - (1639MW)

IPPs (572MW)

Upcoming IPPs

Generation

Transmission

(KETRACO)

Energy

Regulatory

Commission

(ERC)

(responsible

for regulating

the energy

sector)

REA

New Energy Bills

being enacted to

align the sector to

the New

Constitution, Vision

2030 and Global

Trends…

Distribution Energy Tribunal KPLC

GDC

KNEB

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CORE OBJECTIVES OF KENYA’S STRATEGIC ENERGY PLAN

Key

objectives:

Increase electricity generation

capacity from cheaper,

sustainable and reliable energy

sources –

lower cost of power

( To cost about 9 US cents for

industries and 10 US cents for

domestic tariff by 2020

Increase electricity access

country wide to increase the

uptake of power and grid / off-

grid network extension –

socio-economic growth,

increased and devolved

industries

To achieve universal access

by 2020

Expand and upgrade the

transmission and distribution

network infrastructure –

reduce power loss, lower

cost of power, increased

revenue generation, stable

power network

PILLARS OF THE 5,000+ MW PROJECT

• ADEQUACY roadmap to raise generation capacity from 2323 MW in 2015 to over 6,700 MW by 2020

•RELIABILITY enhanced through diversified energy mix

• REDUCE COST by increasing generation from cheaper energy sources and reduced power losses

GENERATION CAPACITY

• The installed generation capacity stands at 2,340 MW while the total effective capacity is 2,265 MW.

• The effective interconnected capacity is 2,243 MW.

Mar 2013 February 2018

Installed MW Effective MW Installed MW Effective MW2 % contribution

(effective)

Hydro 816.2 766.9 826.23 805.02 35.55%

Geothermal 251.4 244.9 652.00 644.00 28.44%

Thermal (MSD) 466 447.5 716.32 690.12 30.48%

Tempoary Thermal -grid 120.0 120.0 - - -

Thermal (GT) 60.0 27.0 60.00 55.00 2.43%

Wind 5.1 5.1 25.50 25.50 1.13%

Biomass 26 22 28.00 23.50 1.04%

Interconnected System 1,745 1,633 2,308 2,243 99.06%

Off grid thermal 22.1 18.7 30.61 20.69 0.91%

Off grid wind 0.55 0.20 0.55 0.01 0.00%

Off grid solar 0.22 0.50 0.69 0.62 0.03%

Imports 0.00 0.00 0 0 0.00%

Total Capacity MW 1,768 1,652 2,3401 2,264.52 100.00%

1. Includes 7.65MW of new capacity in off-grid stations commissioned since March 2013 and excludes off-grid capacities

decommissioned following grid extension to Mpeketoni, Lamu, Garissa and Hola.

2. When capacity from all existing plants is available.

5000+MW CAPACITY ADDITION PROGRAMME

• Since March 2013, a total of 685 MW of new generation capacity has been commissioned bringing the installed capacity to 2,340 MW.

• This includes 7.65MW of new off-grid capacity. Project Type MW Term(Years) Commissioning Date

1 Thika Power MSD 87 20 Mar-2014

2 OrPower4 plant III Geothermal 16 25 Feb-2014

3 Olkaria IV Geothermal 140 25 Aug-2014

4 Olkaria I additional units Geothermal 140 25 Jan-2015

5 Gikira Small Hydro Hydro 0.5 20 May-2014

6 Gulf Power MSD 80 20 Nov-2014

7 Ngong I Phase 2 and Ngong II Wind Wind 20.4 20 Jan-2015

8 KenGen Wellheads Geothermal 75.6 20 Jan-2014 – November 2016

9 Kindaruma optimization Hydro 4 20 Jun-2013

10 Triumph Power MSD 77 20 Jul-2015

Triumph Power (steam unit) MSD 6 20 Feb-2016

11 Orpower IV Geothermal 29 25 Jan-2016

12 Biojoule Kenya Limited Biogas 2 20 Jan-2016

13 Regen-Terem (GenPro) Hydro 5 20 March- 2017

14 Chania Power Company(KTDA) Hydro 0.50 20 Undergoing commissioning tests

15 Gura (KTDA) Hydro 2 20 Undergoing commissioning tests

Total MW added since March 2013 685

• Committed generation projects amounting to 6016.43 MW capacity are at various stages of development.

• These include KenGen’s 158 MW Olkaria V geothermal and 400 MW of new capacity anticipated from Ethiopia in the medium term after completion of the 500 kV HVDC Ethiopia-Kenya transmission line expected in 2018.

5000+MW CAPACITY ADDITION PROGRAMME......( CONT)

Project / PPA Status Before March 2013 Mar. 2013 – Feb. 2018

No. Capacity (MW)

No. Capacity (MW)

Commissioned & operational Plants 48 1,768 68 2,340

PPAs commissioned 48 1,768 15 685

PPAs negotiated and approved by ERC-Effective - - 20 2144.3

PPAs negotiated and approved by ERC-Not

effective - - 12 326.04

PPAs negotiated awaiting ERC approval - - 13 358.51

PPAs under negotiations - - 19 595.65

Approved projects awaiting PPA negotiations - - 13 145.3

Approved Projects-Sent to ERC for inclusion in the

LCPDP - - 9 300

EOI approved- feasibility study ongoing - - 138 2,147

Projects under procurement yet to start (Coal and

Gas) - - 4 1,830

Feed In Tariff Projects • Out of the above, a total of 220 projects are being developed under

the FiT , and are at various stages of implementation and working towards availing 3,764 MW of new generation capacity.

Projects Wind Biomass Biogas Co-gen Small

Hydro

Solar

PV Geothermal

TOTAL

(No.)

Plants in Operation 0 0 1 0 4 0 0 5

Projects with Signed PPA's 3 2 0 1 9 8 0 23

Projects with Initialled PPA's 3 0 2 0 3 3 0 11

Projects with Finalized PPA

Negotiations Awaiting Board

Approval

0 0 0 0 0 3 0 3

Projects with PPA's under

Negotiations 1 2 0 0 6 7 0 16

Approved Projects with PPA

Negotiations Yet to Start 2 0 1 1 7 4 0 15

Projects with Feasibility Studies

approved and sent to ERC-

LCPDP

1 0 0 0 0 8 0 9

Projects in Feasibility Study

Stage 8 13 2 2 52 60 1 138

Total no. of Approved

Projects 18 17 6 4 81 93 1 220

Capacity (MW) 737 208 28 60 493 2,222 15 3,764

LOAD PROFILE Trend of Peak Demand

Current Peak demand is 1,770MW recorded on 17th January, 2018,

against Installed capacity of 2,340MW

1,649.9 1,647.9 1,649.1

1,656.0 1,665.3 1,662.5

1,710.3 1,704.9

1,727.0

1,753.7

1,769.7 1,767.6

1,580.0

1,600.0

1,620.0

1,640.0

1,660.0

1,680.0

1,700.0

1,720.0

1,740.0

1,760.0

1,780.0

Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18

Peak Demand - MW

Peak Demand(MW)

ELECTRICITY TARIFF

• Fuel Cost Charge (FCC) reduced from Shs.7.22/kWh in August 2014 to Shs.2.31/kWh applied from January to October 2016.

• FCC increased to Shs.2.34/kWh in November 2016 and Shs.2.85/kWh in December 2016 due to increased thermal generation following reduced hydropower output.

• The FCC retained at Sh.2.85/kWh from January to August 2017 but increased to Sh.3.35/kWh in September 2017 due to increased thermal generation following reduced hydropower output.

• The FCC retained at Sh.3.35/kWh in October 2017 and went up to Sh.4.35/kWh in November and December.

• FCC reduced to Shs.4.30/kWh in January 2018, but increased to Shs 4.51/kWh in February due to the persistent low hydrology and went upto Shs 5.35/kWh in March 2018.

722

571

231

311

251 231

285

435

535

0

100

200

300

400

500

600

700

800

Jul/

14

Sep

/14

No

v/14

Jan

/15

Mar

/15

May

/15

Jul/

15

Sep

/15

No

v/15

Jan

/16

Mar

/16

May

/16

Jul/

16

Sep

/16

No

v/16

Jan

/17

Mar

/17

May

/17

Jul/

17

Sep

/17

No

v/17

Jan

/18

Mar

/18

FCC

C

ents

/Kw

h

Mode of Participation

Through competitive PPP arrangements-

Advertisements normally in press and in

websites of Ministry and Agencies. Competitive Bidding

1

Feed-In-Tariffs

2 Renewable Energy Projects done under

Feed-in-Tariff Policy- soon transiting to

Energy Auctions framework, other than for

very small sized projects

PARTICIPATION

PPP initiated Proposals

for concessions

3

Concessional projects e.g. geothermal

FISCAL AND OTHER INCENTIVES

• Duty on power generation equipments waived

• Standard Letter of Support prepared from the government

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Electricity Access Growth: Customer Numbers

2013: 2.33 m 31%

2014: 2.77 m 35%

2016: 4.85 m 58%

2017 70% Universal Access

2020

2015: 3.61 m 45%

Our Intention is to Deliver Universal Access to Energy in Kenya by 2020

Year Population

size “Million”

2013 41.8

2014 43.0

2015 44.2

2016 45.7

2017 46.3

2020 52.0

Average household size is

taken as 5.5

Current connected: 6.5

million, > 72%

ELECTRICITY ACCESS STRATEGIES

Last Mile Connectivity:

Phase 1- Those near transformers

Phase 2 – Increasing the transformers 10

transformers per constituency

Phase 3 – Reaching off grid areas - KOSAP

Off-grid Solutions:

- Mini-grids- with hybrid solar/wind - KOSAP

- Stand Alone Solar Systems for Public

Institutions - KOSAP

- Solar Home Systems -KOSAP

Global Partnership Output Based Aid (GPOBA)

– Targeting highly populated settlements e.g

Kibera 1.9 Million Kenyans benefited across all

47 counties.

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LAST MILE CONNECTIVITY PROJECT (LMCP)

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• The Last Mile Connectivity Project (LMCP) is a Government of Kenya

Project for universal electricity access, being implemented by KPLC.

• It aims to stimulate economic growth in line with vision 2030 strategic plan.

• Implementation commenced in 2016 and is expected to be completed in

2021.

• It will improve access rate from about 55% in 2016 to about 84% through

connection of about 1.2million new customers to electricity supply.

• Universal access to be achieved in collaboration with off-grid connectivity

strategies eg KOSAP

• Benefiting customers will pay Ksh.15,000/= and may apply for a loan with 3

years repayment period alongside monthly bills (I.E. no compulsory up-front

payment).

Last Mile Connectivity

• Estimated to cost US$ 1 billion

• Development partners have so far committed:

– AfDB Phase I USD 150 million

– AfDB Phase II USD 150 million

– World Bank USD 150 million

– AFD/EU Euro 120 million

– EIB Euro 60 million

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

15/10/2018 17

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Phase 1 : African Development Bank (AfDB I) Funding

• Covering 47 Counties, this phase targets to maximize 5,320 transformers thereby benefiting

approximately 314,000 customers .

• Project is in progress and 98,056 customers have been connected so far. Expected completion date

– Nov 2018.

Phase 2 : African Development Bank (AfDB II) Funding

• Covering 47 Counties, this phase targets to maximize 5,320 transformers and connect

approximately 314,000 customers .

• Status: Contractors mobilized and design work started. Expected completion date – September

2019.

Phase 3 : World Bank /IDA Funding

• Covering 47 Counties, this phase targets to maximize 3,200 transformers and establish 1000 new

transformers with full maximization. Benefiting approximately 312,500 customers .

• Status: Contractors mobilized and design work completed. Expected completion date – August

2019.

Phase 4 : AFD/EU & EIB Funding

• Covering 32 Counties (based on counties where AFD phases 1 and 2 projects were implemented

i.e.. to maximize previous distribution projects by AFD)

• This phase targets to maximize 4,591 transformers and establish 353 new transformers with full

maximization. Benefiting approximately 296,000 customers .

• Expected to be tendered in April 2018 and completed in 2021.

Last Mile Connectivity Scope

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Mar 2013

TRANSMISSION & DISTRIBUTION INFRASTRUCTURE

Mar 2016

Kenya-Uganda-Rwanda; Ethiopia-Kenya; Kenya-Tanzania-

Zambia

Increase in Km of transmission lines in the country:

Cumulative growth Km

• Mar 2013 3,621km

• Mar 2016 4,221km (+600Km)

• Aug 2017 6,379km (+2158 km)

• Dec 2017 7,831km (+1452 km) (Total 4210 Km added)

Regional Transmission Lines:

Aug 2017

Dec 2017

KETRACO is working on developing a concessioning framework to enable private sector to participate in transmission development through PPP

REGIONAL INTERCONNECTION

500KV HVDC

Ethiopia-Kenya

Contractors

Mobilised

400KV Mombasa-

Nairobi

(93%complete)

400KV Lessos-

Tororo

(Completion Dec-

2016)

400KV Kenya-

Tanzania

(Procurement of

Contract ongoing)

400KV Suswa-

Isinya (83%

complete)

PUBLIC/STREET LIGHTING PROJECT AS AT 28-02-2018

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• Since its inception on 6th January 2016, G.O.K has disbursed to KPLC Ksh 11,623 million. A

total of 100,976 lanterns had been installed as at end of February 2018 compared to 98,614 in

January 2018.

County Budget (Ksh M) Funded (Ksh M) (February 2018)

Total lanterns Installed

(January 2018)

Total lanterns Installed

(February 2018)

1 Nairobi 5,810 5166.7 28,610 29,647

2 Nyeri 100 192.1 1,560 1,560

3 Mombasa 1,200 565.3 11,092 11,092

4 Kisumu 482 459.8 4,880 4,880

5 Nandi 69 160.5 1,310 1,579

6 Nakuru 271 385.1 2,110 2,288

7 Uasin Gishu 374 342.4 5,931 6,093

8 Garissa 81 152.2 1,064 1,064

9 Kiambu 117 523.4 3,774 3,963

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OFF-GRID Existing and Committed Transmission Network

OFF-GRID • Currently there are 21 public operational mini grids. Another

seven under development.

• All these are diesel based but nine have been retrofitted with

Renewable Energy.

• REA developing 25 solar mini-grids of about 60kW each

• To do more, with funds from GoK, AFD, World Bank,

Nordic Development Fund(NDF), DFID, KfW, GIZ and

other Development partners.

• Study on National Electrification Strategy and Geospatial

mapping finalized- Informs on areas and strategies for.

electrification by grid, mini-grid and other distributed energy

• 150m $ World Bank Facility commenced- KOSAP

POSSIBLE AREAS OF COLLABORATION

The following are the possible areas of

collaboration with the Other States and Non-State

Actors on energy

1) Helping in accessing way leave for projects.

2) Help in dealing with excessive host

community expectation during project

implementation.

3) Budgetary support – annual budget cycle.

4) Energy bill legislation process.

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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 …