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Wind Energy in Kenya

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published on 19th February 2021

 

Kenya stands tall amongst African countries when it comes to wind energy production. Its claim to fame is the Lake Turkana Wind Plant (LTWP) which has a capacity of 310 MW.


The project is the largest of its kind on the continent with 365 wind turbines each of a capacity of 850k. In 2019 the LTWP was able to supply about 1.5b kWh of electricity handling up to 30% of Kenya’s off-peak demand and 17% of its peak demand. In that year the wind farm operated at a capacity factor of about 57% well above the global average of about 28% - 40%.


Prior to the LTWP, Kenya only had one wind plant located on the Ngong Hills with a capacity of 25.5 MW, but it now has a pipeline of projects under development. The next plant expected to be commissioned is the Kipeto Wind plant located in Kajiado which will have a capacity of 100MW. A further 251 MW is expected to be installed in the next 3 years through 6 other projects.


Kenya has a viable wind energy resource. According to the Energy and Petroleum Regulatory Authority (EPRA) 73% of the country experiences wind speeds of 6 m/s or higher at a hundred meters above ground level. Of this 28228 sq. km experiences wind speeds of between 7.5 – 8.5 m/s and 2825 sq. km experiences wind speeds of between 8.5 – 9.5 m/s.


The highest wind speeds according to Global Wind Atlas data can be experienced in the north of the country around the Lake Turkana area with speeds exceeding 8.0 m/s in some areas. The LTWP is located at the South Eastern end of Lake Turkana at a place known as Sarima. According to LTWP, the project is located in a valley between Mt. Kulal and Mt. Nyiro which valley has a funnelling effect, accelerating wind speeds resulting in the generation of more electricity.


The environs of Lake Turkana are not the only viable location to set up a wind farm. Other viable sites are located in Marsabit, Samburu, Laikipia, Meru, Nyeri and Nyandarua and Kajiado counties. The majority of the projects currently under development are located in Kajiado county. Proposals have even been floated to have an off shore wind farm in Malindi. The project, proposed by the Swedish firm VR Holding AB, was to have a capacity of 600 MW and would have costed approximately USD 2.4 Billion to construct. The Kenyan government was reluctant and eventually rejected the proposal for the construction of this project on the basis that there was insufficient demand to use up the proposed capacity. Should the project have been undertaken, it would have meant that Kenyan consumers would have had to pay for the excess unused capacity. The Kenyan government proposed that they set up a smaller capacity solar farm at 50MW with the possibility of increasing the capacity of the project as local consumer demand grew.


Despite this, the Kenyan government is committed to generating its power from 100% renewable sources. The President, had in 2018 committed to achieve this target by the end of 2020. In 2019 Kenya was generating 87.2% of its electricity from renewable sources. The target may not have been met in 2020 but the renewable projects in the pipeline are sufficient to enable the achievement of this noble goal. The incentive for this transition lies not only in environmental concerns, but also in reducing the cost burden to consumers. Currently expensive diesel generators are used to cover shortfall in available capacity. This has led to high electricity bills for consumers and which has been a constant source of tension between Kenya Power (Kenya’s main power supplier) and its customers.


Wind energy is a viable way to help Kenya achieve this 100% renewable energy target also due to the fact that the feed-in-tariff (FiT) for wind generated electricity is lower than that of solar. According to the Feed-in-Tariff Policy developed by the Ministry of Energy and Petroleum (MOEP), the FiT value for wind electricity is 0.11 USD per kWh. The FiT values for solar are 0.12 USD for grid connected projects. Kenya Power is however negotiating for lower rates than those set out in the FiT policy. For the LTWP PPA, the tariff is 0.10 USD per kWh for the first 6 years and USD 0.08 per kWh for next 14 years.


The FiT policy will in time be phased out for wind and solar projects as the government policy is to use an auction system for intermittent capacity plants. The auction system it is believed will help drive down the tariff costs and shield Kenyan consumers from high costs of electricity, a high priority for the Kenyan government.
For those interested in generation of wind electricity in Kenya, another key consideration is the demand for electricity. Kenya’s peak demand sits around 1900 MW but had been lower at around 1,765 MW in the early days of the pandemic given various lockdown measures. Kenya’s installed capacity is about 2,712 MW. As Kenya develops and increases its electricity demand, there will be plenty of opportunities for Independent Power Producers (IPPs). Opportunities also exist for those IPP’s who can help with phasing out and replacement of expensive and inefficient generation sources.


Nonetheless, the Kenya government has pro-investor policies which have been baked into the recent Energy Act, 2019. In order to facilitate investment in renewable energy the Cabinet Secretary in the Ministry of Energy and Petroleum is required under s. 74 of the Energy Act to prepare a renewable energy resources inventory and resource map which it is required to keep regularly updated. This is intended to reduce the costs of early feasibility studies into project viability.


The EPRA has published on its website a wind speed map prepared from the numerous studies that have been undertaken on Kenya’s wind resources. Resource maps will be available to view and download on their website.

 

 

 Source: EPRA; last accessed 22nd January 2021

 

EPRA and MOEP make commendable efforts to engage with renewable sector stakeholders and including IPPs and investors by availing information, by easing regulatory procedures and through constant engagement on improvements that can be made to the law and regulations. Other energy sector entities and players such as the Rural Electrification and Renewable Energy Corporation also play a big role in the promotion of renewable energy use in the country.

 

For IPPs interested in wind generation, early and continued engagement with the EPRA and MOEP will help with the assessment of the viability of proposed projects.  Energy is a key enabler of Kenya's development goals and there is no more viable time as now to engage with the authorities on what opportunities there might be as Kenya looks towards its 2021 post COVID recovery and beyond.

 

 

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​*Rödl GmbH Rechtsanwaltsgesellschaft Steuerberatungsgesellschaft Wirtschaftsprüfungsgesellschaft

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