Earlier this year, I was fortunate to spend 5 weeks in Kenya. I had fun learning about the people and culture but also about Kenya’s incredible transition to an economy powered by clean and renewable energy. According to Power Africa, Kenya currently has a total installed capacity of 2,819 MW of energy with 30% hydro, 30% geothermal, 12% wind, 2% solar and the remaining 26% comprised of thermal and biomass. On a relative basis, this is already impressive given their ability to take advantage of their hydro and geothermal resources. However, with the strong solar and wind resources available in Kenya, there is plenty of opportunity to increase the use of renewable energy in the near term.
A highlight of the trip was visiting Naivasha, a part of the East Africa Rift valley that is the main hub of geothermal production in Kenya. Tectonic activity in this region heats water underground to produce steam which then turns turbines to generate electricity. Seen below are 6 geothermal plants that make up the Olkaria Geothermal Project with a combined capacity of about 800 MW.
As someone who works in the solar sector, I was naturally interested in how solar was doing overall in a country with a lot of sunlight! Like most places around the world, solar is growing at a fast clip in Kenya and it was incredible to see this first-hand.
The residential sector is made up mostly of solar water heaters and small-scale rooftop solar & storage to power basic household appliances like refrigerators and televisions. Since most customers cannot afford the upfront cost of installing solar, companies involved in this space provide financing options to pay for the system overtime – not too dissimilar from the residential PPA, lease or loan model in the US. Interest rate are pretty high in Kenya – usually in the double digits – and startups like M-Kopa and Mobisol (Engie-owned) dominate this space.
Residential solar touches all areas of the population from the rich to the poor. I visited Kibera (largest slum in Africa) and saw solar panels in several places from streetlights to rooftops. This reminds us that solar power is not just about climate change, which is significant in and of itself, but also about offering lower cost, healthier energy solutions that elevate large swaths of the population out of energy poverty.
According to BloombergNEF (Solar for Businesses in Sub-Saharan Africa), in 2017, Kenya had an installed capacity of 2,323 MW versus peak power demand of 1,656 MW. This oversupply means grid customers pay relatively high cost for electricity to account for the unneeded generation.
As a result of these high costs, commercial and industrial (C&I) customers are looking at solar to lower operating costs and provide budget certainty over time. C&I customers have generally paid for the higher, upfront cost of the solar instead of leasing or PPAs due to limited financing options. With install costs decreasing and demand increasing, Kenya is an attractive market for C&I developers and investors.
Wind is also taking hold in Kenya. Kenya currently has the largest wind farm in Africa; Lake Turkana Wind Power Project with a nameplate capacity of 310 MW. There are also smaller scale projects like the 25 MW wind project at Ngong Hills; just a few miles outside the capital Nairobi.
In summary, Kenya gets most of its electricity from clean energy sources with hydro and geothermal as the main sources and wind and solar as the fast-growing future. With innovative financing solutions and policy improvement, Kenya can realize its full renewable energy potential and make the shift to a clean economy.
Thanks so much to the incredible people that took time out of their day to talk to me about clean energy in Kenya and to my employer, MEI for being supportive and allowing me to work remotely while in Kenya.