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Kenya

In Kenya growth in access to electricity has been the fastest in sub-Saharan Africa and it is probably the most promising country in East Africa for energy leapfrogging. The development of geothermal resources and the significant potential for solar and wind energy could enable the country to abandon coal and nuclear projects. Solar energy has already had a primary role in the expansion of electricity access through the diffusion of domestic solar systems, which was facilitated by a significant internet penetration in the country.

  • 75%

    the population with access to power in 2018

  • 5.4%

    the GDP growth in 2019

  • 2.3%

    the population growth rate in 2019

  • 2022

    the target year to reach universal energy access

Yet, challenges remain as Kenya’s legislative and regulatory framework still lacks the coherence and solidity to consolidate its leapfrogging potential, while the risk of political and economic instability could threaten the expansion of access to power.

FROM FOSSIL FUEL TO RENEWABLES

The Kenyan energy system is characterised by a high penetration of renewables, however this hides a very substantial use of traditional biomass. On the contrary, modern renewables dominate power generation in particular through hydropower and geothermal. The renewable potential in the country is high for all sources. However, technical challenges for wind-power exploitation, lengthy authorisation processes for small/medium-scale PV plants and a very limited use of tenders represent significant barriers. Kenya is also missing a clear policy framework for renewables and the government position on coal is still unclear. A full appraisal of fossil fuels reserves in Kenya is missing, but low prices and abundant global availability are expected to reduce the incentive to drill for more.

  • 6 GW

    the potential for hydropower

  • From 7 to 10 GW

    the potential for geothermal

  • 22,476 TWh/year

    the potential for wind energy

  • 23,406 TWh/year

    the potential for photovoltaic

from centralised to decentralised generation

Kenya is one of sub-Saharan Africa’s leaders in decentralised energy generation, particularly for mini-grids and solar home systems, and it aims at significantly expanding its capacity in the years to come. Off-grid solutions are vital for the realisation of Kenya’s leapfrogging potential and expansion of access to power, as they can reach unconnected rural areas and expand electrification of the key agricultural sector. However, challenges remain, namely as the absence of the long-awaited mini-grid regulations has stalled investments and the entry of new players into the sector, while the reintroduction of value added tax on solar and wind energy items could be a major drawback.

  • 700,000

    the number of off-grid connections in December 2018

  • 1.96 million

    the potential for new solar home systems

  • 35,000

    the potential for new mini grid connections

from classical market to a novel business approach

Despite strong government ‘s involvement, the Kenyan power sector is one of the most advanced and attractive in the region for private investors. Reforms undertaken since the 1990s led to generation and distribution unbundling, the entry of private “players” into the generation sector and a tariff system that now is reasonably reflective of energy prices. Kenya’s regulatory framework is overall one of the most solid to facilitate energy leapfrogging in the region. Nevertheless, the gap between announced and delivered reforms is still high in the country undermining trust in government and institutions, while political influence in energy governance and tariffs determination could prove troubling in case of political instability.

  • Energy Act 2019 the key piece of legislation

  • 2008 the year of the introduction of feed-in tariffs

  • 1996 the year energy reforms started

"From analogic to digitalised systems"

Kenya is particularly well-positioned for the penetration of digital tools in energy systems, thanks to an early involvement in the technology, a relevant internet penetration and the diffused adoption of digital mechanisms, such as mobile money.
Indeed, Kenya has been the first Sub Saharan African country to launch Pay-as-you-go (PAYG) services ; pioneer companies, mostly funded through international investments, such as M-Kopa, have been particularly successful in terms of new connections and financial sustainability, and are now sided by a growing number of smaller, Kenyan-funded businesses, such as Suntransfer.

  • Pay-as-you-go services

    were first launched in Kenya

  • +16%

    the increase in internet penetration in 2020

  • 98%

    the mobile penetration