The Conference of Parties (Cop29) is scheduled in the month of November. Notably, last year’s meeting extended a call on governments to speed up the energy transition away from fossil fuels to renewables such as wind and solar power in their climate commitments.
Batteries will play a critical role in this transition thus the discussion will gain traction this year. Kenya should leverage its leadership in renewable energy to tap into the immense opportunities that lie in this emerging space.
Some homes and institutions for instance have the benefit of having a generator on standby. When power goes off, there is an automatic switch to a diesel- fuelled generator. In the same way, the sun shines but not all the time.
The wind also doesn’t always blow at an intensity enough to harness energy. It is this intermittent nature dictated by the weather patterns presents the need for battery energy storage systems (Bess) in Kenya, not only for storage but for the integration and balancing of this variable energy.
The energy can be stored when available and released into the electricity grid when it is needed. Bess are therefore key to decarbonising the energy sector in ensuring that renewable energy is available when demand for energy is high, without filling the power gaps with fossil fuel-based energy sources.
Kenya is a member of the consortium of Bess formed last year. This Consortium is expected to secure 5 gigawatts of Bess commitments by the end 2024. The Kenyan government has already taken actions towards incorporating Bess in its energy planning and policy making.
The latest draft of the Least Cost Power Development Plan 2022 – 2041 includes Bess for supporting the integration of variable renewable energy technologies and system support. It proposes 250MW in Bess facilities by 2024 and projects a rise in Bess capacity up to 450MW by 2036.
Bess will also be particularly instrumental for accelerating Kenya’s e-mobility which requires reliable power supplies.
While Kenya is some steps ahead in the shift towards sustainable energy solutions, many of her African counterparts will also be relying on Bess to reduce energy poverty for their population, facilitating rural electrification by deploying microgrids powered by Bess in off-grid communities as well for supporting large scale grid systems. Immense opportunities in-country and regionally therefore lie in this segment of the energy transition as Bess deployment gains traction across the globe.
Presently in Kenya, solar and wind energy specialised equipment are exempted from Value Added Tax. While Bess can be deemed as ancillary to solar and wind energy equipment, additional specific laws and policies are required to accelerate their adoption and deployment. Such laws would specifically address for instance the procurement of BESS, licensing guidelines amongst others.
While fiscal incentives will encourage imports of Bess, significant opportunities lie in the manufacture of BESS with a focus on battery manufacturing. Kenya has been positioning herself as Africa’s manufacturing hub.
This is critical as Bess global manufacturers will be looking into Africa for local partners for the setting up plants closer to resource supply chains. Although, yet to make discoveries of the minerals that form raw materials, Kenya’s neighbours have deposits. Tanzania has nickel and Democratic Republic of Congo has significant reserves of cobalt and lithium.
These materials are largely exported to China. Africa then imports the finished products with the rest being sold to the European market.
Fast-tracking efforts on exploratory activities for these minerals in Kenya will be beneficial.
Given the political commitment to accelerate local manufacturing in Kenya and a lack of mineral deposits notwithstanding, a rift of measures will attract and catalyse the manufacturing of Bess.
These include an attractive regulatory environment such as tax holidays, VAT exemptions. Providing capital benefits such as the availability of land at affordable prices for setting up of plants would also position Kenya as a significant player in manufacturing of Bess.
While manufacturing is often hindered by insufficient power and a limited grid, Bess are set to alleviate stresses and strains on the grid during peak demand periods ensuring uninterrupted power supply. The directive to have solar and wind power producers installing Bess to be able to supply the national grid shows the government commitment to ensure reliable power supply.
Bess is set to revolutionise global energy transition with African nations not only forming a local market potential with the growing demand but also having abundance of resources by way of raw materials. With the world converging shortly in Baku, Azerbaijan to advance discussions on the clean energy transition, Kenya ought to be forging ahead on how to capitalise on the emerging opportunities.
By Wambui Maina - An Energy Lawyer and a Director at an Energy & Climate Policy Firm
