At a recent environmental forum in Nairobi, the Government reaffirmed its intentions to address climate change and reduce greenhouse gas emissions by utilising cleaner fuels and tap into renewable energy sources, amongst other initiatives.
Currently, more than two-thirds of Kenya’s electricity supply is sourced from geothermal and hydropower with plans to add natural gas to the mix. However, due to lack of domestic gas supply, Kenya will need to focus on importing liquefied natural gas (LNG).
LNG is a ‘natural’ fit for the current energy ecosystem in Kenya.
Natural gas is fast becoming the clean fuel that will make up an increasingly large portion of the global energy mix, due to its optimum performance and lower environmental impact than heavier fuels such as diesel and oil.
Gas and LNG can be sourced from almost anywhere at very competitive prices and because of worldwide oversupply, it can now be purchased on very favourable contract terms.
So why hasn’t it taken off on a larger scale in markets like Kenya? Despite the competitive cost and growing demand, LNG distribution has suffered from inertia because of a lack of the right infrastructure and the prohibitively high cost of developing it. This presents both an opportunity and a challenge for Kenya.
Kenya can improve the cost-effectiveness of its power-generation and the competitiveness of local industries by swapping oil and distillates with LNG and gas as the primary fuel source for power and feed stock.
But to achieve this, the country needs to ramp up its efforts to establish a well-functioning LNG supply chain for gas transmission, distribution and storage.
Although the capital expenditure required is substantial, the transition could become a reality sooner with a more innovative approach to infrastructure design and stronger collaboration between the public and private sectors to develop projects.
LNG’s status as the cleanest fossil fuel cannot be understated. It results in 45 per cent less carbon dioxide emissions than coal, and 30 per cent less than fuel oil. The amount of nitrogen oxide as well as damaging sulphur dioxide is also drastically reduced.
LNG is, therefore, a critical component of any country’s environmental policy where economic development and the reduction of greenhouse gases are high on the agenda.
Let’s not forget that wood fuel and other biomass still account for an estimated 68 per cent of the total energy consumption in this country of 50 million people.
What’s more, LNG is complementary to Kenya’s current use of renewable energy. Base load power is fundamental to the success of any economy. LNG is the ideal complement to renewables, filling gaps during off peak times, enhancing grid stability.
With a forecasted economic growth of more than six per cent next year, increased power and a stable base-load will certainly enable the success of Kenya’s main growth sectors, including industry and agriculture, as well as t he development of transport and infrastructure.
Adding LNG to Kenya’s national grid will result in communities and industries gaining access to clean and cheaper fuel that will spur ongoing GDP growth and significantly improve lives.
Nico van Niekerk is Vice president, Business Development Africa, Atlantic, Gulf and Pacific Company.