Investors seek to develop Kenya’s largest solar capacity

Investors have this year applied to develop Kenya’s largest solar energy plants, highlighting the growing interest of companies in building sun-powered power stations.

Records at the Energy Regulatory Commission (ERC) show that three companies have sought the greenlight to produce 120 megawatts (MW) of solar power.

This is equivalent to 5.1 per cent of Kenya’s total power capacity of 2,333 MW.

Solar power accounts for less than one per cent of the electricity connected to Kenya’s grid, presenting a huge market for investors as the country switches focus to green energy sources.

The companies seeking approval to build solar parks include Radiant Energy (40 MW), Eldosol Energy (40 MW) and a similar capacity for Alten Kenya Solarfarms.

The electricity is expected to be fed to the national grid for distribution to homes and businesses. The ERC records show that there were no new applications for large solar energy generation last year while GreenMillenia Energy (40 MW) applied for a licence in 2014.

Experts say Kenya has high potential for solar energy production given high radiation levels from the sun throughout the year. The intensity of sunlight, not heat, determines solar electricity production.

This comes at a time when the Ministry of Energy is moving to introduce auctions that will see inventors bid for renewable energy projects like solar, geothermal and wind.

READ: Solar power company in Sh2 billion expansion plan

The auctions will replace the current feed-in-tariff (FiT) system, where investors identify potentially viable power projects and then acquire licences to operate them at pre-determined rates without any requirement for tendering.

Energy ministry officials reckon that the new system is intended to introduce competition among investors and give consumers the benefit of paying the lowest possible electricity tariffs.

Kenya currently has a fixed tariff of Sh12 per unit ($0.12) for a solar power project with a capacity of up to 40 MW connected to the national grid.

Under the auction system, renewable energy developers will bid for contracts and those with the lowest bids will win government support.

Other firms in the solar energy space include Kenya Solar Energy Ltd (Kensen) which plans a Sh9 billion solar park in Lamu with a capacity of 40MW.

Strathmore University generates 0.6MW from its rooftop solar panels.

The Ministry of Energy last year signed a Sh222 billion ($2.2 billion) deal with American firm SkyPower towards the development of solar power in Kenya over a period of five years.

The agreement, which involves solar assembly plants, research and development, was inked during the sixth Global Entrepreneurship Summit last July in Nairobi.

The Rural Electrification Authority (REA) is constructing East Africa’s largest solar power plant in the North Eastern town of Garissa.

The Sh13.7 billion plant, which has a capacity of 55 MW, will produce enough power to light up 625,000 homes.