Shadow Ministry of Energy

Mandate  

The Ministry of Energy functions as detailed in the Executive Order No. 1/2016 of May 2016 on the organisation of the Government of the Republic of Kenya are: -

  1. Energy Policy and Development. 
  2. Hydro power Development. 
  3. Geothermal Exploration and Development. 
  4. Thermal Power Development. 
  5. Oil and Gas Exploration. 
  6. Oil/Gas and Minerals sector capacity development. 
  7. Rural Electrification Program 
  8. Petroleum products, import/export/marketing policy Management. 
  9. Renewable Energy Promotion and Development 
  10. Energy Regulation, Security and Conservation. 
  11. Fossil Fuels Exploration and Development.  

The Statement Department of Energy is split into the State department Energy and State Department of Renewable Energy. 

The energy sector in Kenya is largely dominated by petroleum and electricity, with wood fuel providing the basic energy needs of the rural communities, urban poor, and the informal sector. An analysis of the national energy shows heavy dependency on wood fuel and other biomass that account for 68% of the total energy consumption (petroleum 22%, electricity 9%, others account for 1%). Electricity access in Kenya is low despite the government’s ambitious target to increase electricity connectivity from the current 15% to at least 65% by the year 2022. 

Jubilee vs Thirdway Alliance Energy Agenda 

Jubilee Government Pillars 

Third Way Alliance Pillars 

  1. Implement the 50% lower tariff for firms who run night shifts between 10pm and 6am to stimulate the 24-hour economy and reduce energy costs for heavy users. 
  2. Complete the development of new power plants currently under construction including the 310 MW Lake Turkana Wind Power Plant (the largest wind power plant in Africa), and the two units in Olkaria that will add another 210 MW to the grid. 
  3. Work with Counties to establish at least two proper waste management systems per county. Attract investors to establish waste to energy infrastructure for Nairobi, Mombasa, Nakuru, Kisumu and other Counties. 
  1. Liberalise generation and distribution of power supply 
  2. Revise the current electricity billing and pricing where consumers are charged outrageous charges like Forex charges, fuels costs etc. 
  3. Promote investment in clean renewable energy like wind, solar, and geothermal power. We shall decommission diesel powered generators in four years. 
  4. Venture into nuclear energy. 
  5. Regularised power supply 


Energy Sector Status 

The challenges facing the electricity supply sector are mainly inadequate generation capacity arising out of insufficient investment in power generation and its dependence on hydro for 50% of the existing capacity. The sector has had to resort to expensive quick fixes like Medium Speed Diesel (MSD) plants running on Heavy Fuel Oil (HFO) and High-Speed Diesel plants running on Automotive Gas Oil (AGO). Electricity is therefore expensive as these plants currently contribute to nearly 40% of the effective capacity with cost of energy generated from these plants ranging from US$ cents 26 – 36 per unit. Their contribution increases during dry hydrology, making electricity even more expensive.  

The current effective power generation capacity in the country is 1664 MW and is projected to grow to 2,600-3600 MW by 2020. This is based on: 

  1. Baseline demand from anticipated growth in population and economic activity. 
  2. Conversion of latent demand through increased electricity access (unfulfilled requests) 
  3. Implementation of large industrial projects, which will require significant electricity use (Vision 2030 - LAPSSET, SGR)

The make up this capacity in MW is hydro 770, geothermal 241, thermal 622, co-generation 26, and wind 5.1. The monitored demand which is considered suppressed largely due to transmission and distribution system weaknesses, stands at about 1,357 MW while the unsuppressed demand is estimated as 1700 MW, thus depicting a shortfall of 536 MW, after providing for a 30% reserve margin recommended by the National Economic and Social Council (NESC). This demand-supply imbalance has hitherto contributed to regular power rationing, particularly during dry seasons. 

As a country, we set out to become a middle-income economy by the year 2030 under our vision 2030. This means that we need to have adequate energy to power our economy into a middle-income power house.   However, we are still heavily reliant on hydroelectric power which is susceptible to poor rains. The government issued a statement indicating that Masinga Dam (40 MW) would be shut down in early March 2018 if the water levels did not improve. As a country, we generate about 40% of our power via hydro dams. A USAID report done in 2015 indicated that by the year 2020, our energy demands will exceed 2,600 MW while our current maximum output is 2,300 MW. The government through the ministry of Energy has a 5,000 plus megawatt agenda to ensure that we generate surplus power, but this remains a pipe dream. 

The national geothermal potential is estimated at between 7,000 and 10,000 MW.  

Cost of energy is also highly prohibitive to investment with a kilowatt hour costing 14 US cents compared with Ethiopia at 3 US cents per kilowatt hour. It costs a manufacturer four times more to do business in Kenya.   

Failings in the Energy Sector 

  1. Lack of enough energy production capacity that leads to irregular and intermittent power supply 
  2. Expensive power generation sources that make the cost of power the most expensive in the region 
  3. Steep penalties for independent power producers in renewable energy that fail to complete projects on time hence leading to major losses and keeps away potential investors in the sector 
  4. Overreliance on hydroelectric power generation that is susceptible to weather pattern unpredictability particularly drought 
  5. Power distribution monopolized by Kenya Power hence denying the consumer choice in terms of cost and quality service 
  6. Grid-system losses and weaknesses and limited reach in rural areas  

Recommendations 

  1. Liberalise the power generation and distribution sectors to enable new players into these areas on an even platform 
  2. Reduction of energy cost by moving away from expensive thermal power production and investing in cheaper renewable energy including solar and wind 
  3. Improving the electricity grid within the country to reduce losses due to poor infrastructure 
  4. Aim to have Kenya increase its power production capacity from the current 2,500MW to over 5,000MW by the year 2022 
  5. Encourage poor households via an incentive program (reduced rural cost) to move away from charcoal and firewood as a source of energy to cleaner sources including bottled LPG 

Conclusion 

In conclusion, our biggest problem as a country is corruption, the plunder of our hard-earned taxes by a few elites within the government. We must strive to foster integrity and decency to move this country to the next level and have standards with all the activities that we engage ourselves in. We must reject mediocre governance and move to a system of accountability and responsibility. Coordination between the national government and the devolved units needs to be streamlined to avoid duplication of roles and enhance efficient service delivery to citizens.  

John Wachira

Shadow Cabinet Secretary, Ministry of Energy.