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Kenya the Role of Green Mini Grids

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    INCREASING ACCESS TO ELECTRICITY IN RURAL KENYA: THE ROLE OF GREEN MINI GRIDS  Izael Da Silva  –   Strathmore Energy Research Centre James Wafula - University of Nairobi Isaac Kiva  –   Ministry of Energy and Petroleum Currently, 30% of Kenyan households have electricity. The government plans to increase this to 65 % by 2020 and to 100% by 2030. To this end, the government’s has formulated an energy policy and a regulatory framework (Sessional Paper No.4 of 2004 and the Energy Act of 2006). With development partn ers’ support, Kenya has allocated resources for energy infrastructure development including the exploitation of renewable resources. Green mini grids will be invaluable to increasing access to electricity in rural Kenya. The World Bank has selected Kenya to benefit from the Scaling-Up Renewable Energy Program (SREP). SREP will support Kenya towards achieving a major transformation including a low greenhouse gas (GHG) emission development pathway. Also, Kenya’s Investment Plan identifies the Hybrid (solar and wind) Mini-Grid Systems as a project which supports pilot programs in rural areas. According to the Investment Plan, the Hybrid Mini-Grid Systems can increase electricity access and reduce GHG emissions. Kenya receives an average solar radiation of 4-7 kWh/m2/day, the highest amount of which is in off-grid areas. These areas are largely rural and have enough space for solar installations. The provision of quality energy services to all economic sectors in a sustainable and cost effective manner is a key Government objective. The Government is, therefore, funding distribution network development through the Rural Electrification Authority (REA), privatizing Government-owned off-grid power stations, and  progressively connect off-grid systems to the national grid. In providing affordable energy to all, the Government will also support the development and use of modern and efficient emerging technologies. The Ministry of Energy (MoE) is responsible for formulating and articulating policies which create an enabling environment for the sector’s efficient operation and growth. The MoE’s tasks include national energy planning, human resource training and mobilizing financial resources. The Energy Act of 2006 is one of the MoE’s  policies. It established the Rural Electrification Authority (REA) and restructured the Electricity Regulatory Board into the Energy Regulatory Commission. It also expanded the Energy Regulatory Commission to encompass the entire energy sector. MoE energy policy also led to the creation of the Geothermal Development Company (GDC) and Kenya Electricity Transmission Company (KETRACO). The MoE created the Rural Electrification Authority to extend electricity to rural areas, manage the rural electrification fund, mobilize resources for electrification and promoting the development and use of renewable energy. The REA objective is to provide electricity in areas that are far from the national grid and where electricity supply projects are not commercially viable. REA’s greater vision is for ele ctricity to improve the social and economic lives of people in those areas.   The Kenya Power & Lighting Company (now known as Kenya Power) is a State Corporation that is currently the only off-taker in the power market which purchases bulk power from all power generators on the basis of negotiated Power Purchase Agreements (PPA) for onward transmission, distribution and retail purposes. Kenya Power owns most of the existing transmission network while KETRACO is developing new transmission systems. Figure 1 Main players in the electricity industry The country’s power supply consists of the national interconnected system and several mini -grids which serve areas far from the national grid. The interconnected system has a total installed capacity of 1,695 MW made up of 812 MW of hydro, 646 MW of thermal, 205.8 MW of geothermal, 5.1 MW of wind, and 26 MW from cogeneration. As of now, there are fourteen existing mini-grid diesel power stations. Kenya Power manages twelve of these while KenGen manages the other two. . The total installed capacity for these mini-grids is 19.16 MW: 18.1MW thermal, 0.55 MW wind and 0.51 MW solar. , Kenya Power has connected one of its off-grid diesel stations, Moyale, to the Ethiopian national grid and expects to connect a second one, Mpeketoni, to the national Kenyan grid. The KenGen-operated stations in Garissa and Lamu are comparatively large, and there are plans to extend the Kenyan national grid to these areas. In 2003, the Government embarked on a program that led to the expansion of grid supply to rural areas, the introduction of renewable energy in various mini-grids and supplying electricity to public institutions. In 2009, the Government carried out the Rural Electrification Master Plan update study in order to improve the national rural electrification strategy. The study identified a total of forty-four new sites for off-grid power stations. The   REA is in the process of developing ten of these site and five additional sites which are not included in the REMP 2009. Figure 3: Population density and electricity grid coverage The REA’s challenges include managing diesel stations as transportation and on -site fuel storage are  problematic. Additionally, spare parts are not locally available and have to be imported causing major delays while diesel stations’ emissions and oil spills contribute to environmental degradation. As a result, oil as a source of electrification in off-grid areas is not ideal and green energy sources are necessary. To this end, the Government has undertaken some pilot projects using solar and/or wind. These are the Lodwar, Marsabit, Mandera, Elwak, Habaswein and Merti stations. Figure 4: Lodwar hybrid power station Figure 5: Habaswein hybrid power station The total capital expenditure for retrofitting the existing stations and those under construction is US$ 43 million while that for developing the forty-four greenfied stations is US$ 173.8 million. Government budgetary support    and development partners’ financing will meet this expenditure. The World Bank, Agence Française de Développement (AFD), KfW  –   GIZ, DFID, and JICA have already made financial commitments. AfD committed Euros 30 million to fund retrofitting of existing mini grids including the expansion of existing hybrids. These funds will provide a sustainable supply of electricity in off-grid regions while enhancing the contribution of renewable energy sources in the energy mix. Additionally, many smaller units can easily be installed to cover more rural households and capacity can be scaled up as demand grows. Figure 6: Energy mix per mini-grid as at March 2013 Over the years the Government has been developing off-grid power stations and handing them over to the national utility, Kenya Power. The cost of operating these off-grid stations has varied due to fluctuation in fuel costs. To alleviate this problem, the Government has embarked on a programme to install renewable energy into the existing stations.

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