Delivery of additional 5,000MW in 40 months achievable

Kenya has installed about 1,650 megawatts of electricity generating capacity over the past 100 years.

The Jubilee government has made a commitment to deliver an additional 5,000 megawatts in the next 40 months. One would call this a tall order, but the Ministry of Energy and Petroleum insists that it is doable and that they will indeed achieve it.

One thing that makes me accept that the government can actually achieve this ambitious goal is the results-driven executive leadership that appears to be mostly walking the talk. It is apparently not a “business as usual” government.

We have already witnessed this leadership style at work with the Mombasa port efficiency enhancement, launch of the fast railway project and the recent inter-state infrastructure protocols.

Stop discussing barriers and problems and instead eliminate them, appears to be the guiding wisdom.

One such barrier that is the darling of business discussants and lobbyists is the high cost, poor quality, and inadequate supply of electricity.

These negative factors stand in the way of delivering the wider national socio-economic objectives including Vision 2030 projects, most of which will require large supplies of electricity.

There is no way the Ministry of Industrialisation, and in deed any other ministry, can deliver on their objectives if electricity supplies are insufficient.

Last week, at an energy forum attended by many potential local and foreign energy sector investors, Energy Cabinet Secretary Davis Chirchir explained how the 5,000 megawatts of new power generation capacity would be achieved.

To start with there will be a “5000 megawatts within 40 months” cabinet committee chaired by President Uhuru Kenyatta to ensure inter-ministerial participation in delivering target power projects. This way, essential resources and facilitation will be forthcoming and with minimum negative bureaucracy.

The underlying driving objective of the 5,000 megawatts programme is to substantially reduce consumer tariffs while enhancing quantity and quality of power supply across Kenya.

Except for the three thermal projects already committed (Thika, Athi River I, and Athi River II totalling 250 megawatts) there will be no additional capacity using expensive imported petroleum in this project.

There is at long last an acceptance in this plan to de-emphasise small generating plants (less than 100 megawatts) and target more than 300-megawatt plants.

Larger units have the benefits of delivering economies of scale and minimising repetitive regulatory, procurement and financing efforts that are lengthy and costly.

For me this is the greatest factor that gives the confidence that the incremental 5,000 megawatts will be delivered. Emphasis will be on fewer plants that deliver larger volumes of power.

For the first time, generation using coal and liquefied natural gas (LNG) will be introduced in the energy mix menu. There are planned 3x350-megawatt plants at Dongo Kundu at the extreme end of Kilindini channel using imported LNG.

It is understood that the presidents of Kenya and Nigeria have already discussed the possibility of concessionary imports of LNG from Nigeria.

Further, the LNG generation will provide opportunities to monetise natural gas discoveries in Kenya when commercial finds are confirmed.

There is the 2x480-megawatt coal project in Kilifi County initially consuming imported coal. A further set of 2x480-megawatt plants will be in Kitui County and will burn local Mui basin coal.

It is hoped that the authorities in charge of Kitui coal development will get their act together and deliver coal on time. Coal is also awaited by potential cement investors who plan to set camp in the county.

Perhaps the greatest shift will come in geothermal where at about 1,900 megawatts, it will be the key base-load electricity supplier replacing hydro power.

Geothermal is a resource without other competing alternative economic uses, and this is where maximisation of power generation should rest.

Coal has urgent alternative demand in industrialisation while LNG has foreign exchange implications either as imports, or exports when we have our own natural gas.

What is impressive in this plan is the absence of reliance on imported power. There have been previous talks on hydro power imports from Ethiopia, and also from Tanzanian natural gas generated power.

Creating our own generating capacity creates local jobs and opportunities. Importing power in reality exports jobs.

The facilitative legal, regulatory and institutional framework put in place in the past 10 years provide an effective platform for the power projects to take off.

The unbundling of the power sector, establishment of a regulator and creation of government-funded transmission and geothermal development agencies. All provide an enabling framework.

The investment structure model for most of the proposed projects will be mainly on the basis of public private partnership framework along the independent power producers institutional structure.

To off-take the additional 5,000 megawatts, there will be corresponding new investments for power transmission and distribution, which are part of the 40 months investment plans.

Finally, when focus turns to achieving rapid results there is always the strong likelihood of shortcuts in contracting and procurement processes The Energy bosses will need to ensure transparency and accountability are fully demonstrated.

Mr Wachira is the director, Petroleum Focus Consultants. [email protected]