Last Saturday as I crossed the Tana Bridge, upstream of Masinga dam, I saw a river that has diminished into a “stream”. This is proof that yet again hydro generation capacity is in serious jeopardy leaving the economy at the mercy of the weatherman.
It should be expected that electricity prices will increase to reflect increased generation from the more expensive imported oil.
Perhaps in reaction to hydro capacity drop, there was an announcement by the Energy Ministry that a power plant will be installed in Mombasa to use imported liquefied natural gas (LNG).
Whereas LNG is a greener fuel, it is still “imported” fuel subject to the same global price volatility as fuel oil, and will carry the same fuel price levy in our electricity bills.
In the previous week there was a private sector advert for feasibility consultancy for a natural gas power plant in Lamu County, an indication that prospects for a commercial discovery of natural gas are high.
Can the discovery confirmation be accelerated so that the planned LNG plant is located nearer Lamu instead of Mombasa? This way the fuel feed can be “local” natural gas and not imported LNG.
Further, can we still retain the imported coal plant at Lamu when prospects of natural gas commercial discoveries in the same area are high?
What will be the impact of imported coal generation — and LNG generation at Mombasa — on excess carried capacity charges when priority geothermal is accelerated?
The above are just a few pertinent questions about power generation options and decision making.
In 2013, an ambitious “5000 megawatt(MW) by 2016” power generation plan was launched and it was anchored in least cost generation options.
The plan has so far delivered increased geothermal generation to about 47 per cent of national share, and 300MW of wind generation, which is still stranded and not connected.
Most of the other projects in the 2013 plan have not been implemented.
These MW increases are inadequate to cushion the country against fluctuating hydro power generation whose shortfall automatically translates to more use of expensive thermal generation.
The impacts of climate change on hydro-power are evidently more onerous today than was foreseen in 2013.
The 2013 power generation plan looks out of date and may not be suitable for consistent power generation investment decisions.
Kenya needs to craft a new power generation plan that reflects the latest energy demands and options; gives priority and accelerates base-load generation from local resources while responding to the latest generation technologies and capital availability.
A fresh plan should aim at guaranteeing power supply reliability, resilience and affordability while aligning it to the latest economic development goals which require a robust counterpart energy supply plan.
It should be a plan that energy investors can rely on for consistency and predictability.
In addition to least cost considerations, I believe the key guiding principle and policy should be minimisation of any generation that uses imported fuels (oil, coal and LNG) so as to allow unhindered expansion of locally produced energy resources to reduce exposure to price volatility, and also reduce foreign exchange requirements.
This means giving priority and ring-fencing geothermal, and locally produced natural gas for accelerated base-load generation expansion, and solar/wind for incremental generation.
In the longer term and as economic growth justifies it, we can bring in base-load nuclear generation which has little imported cost content.
The other reason we need a revised power supply plan is to establish realistic power demand forecasts to guide power generation quantity, timing, and mix.
The 2013 plan apparently overly estimated electricity demands which advised excessive power supply and generation planning.
In respect of Kitui coal prospects, I think this should be reserved for heavy industry heating (cement, steel works, soda ash... ) to reduce use of imported fuel oil.
This is an area that the three Cabinet Secretaries responsible for Energy, Mining, and Industries can jointly co-ordinate.
In this write-up I have avoided reference to green energy because I believe that it is economic considerations, energy security, and least cost considerations that should be over-riding.