Export options to the Kenya energy sector

Export options to the Kenya energy sector

Export Options to Kenya in the Energy Sector

The energy sector of Kenya is largely dominated by hydro power, diesel, and geothermal energy, providing the basic needs of the people from rural communities, urban poor, and the informal sector. However, electricity supply in Kenya is considerably low despite the country’s ambitious target of producing 5,000 megawatts by 2030.

The government is considering ways and options to help aid the problem as the demand outstrips the supply of electricity. Some of which are the utilization of renewable energy sources and the importation of electricity from Ethiopia through the Eastern African Power Pool which will be completed in 2019.

Energy Sources of Kenya

An analysis of the national energy consumption shows heavy dependency on hydropower that accounts for almost 50% of Kenya’s energy composition (diesel 37%, geothermal energy 14%, and others account for 2%).  

Currently, Kenya has its total electricity generated amounting to 1,350 megawatts, 80% of which comes from the KENGEN or the Kenya Electricity Generating Company. The remaining 20% from the electricity produced by Independent Power Producers (IPP), Iberafrica Power, Westmont Power, Orpower 4 and Tsavo Power Company. Despite this, Kenya still has 6.2 million households that don’t have electricity. Kenya can’t depend solely on the electricity generated by hydropower plants. Other sources should be considered to ensure the supply stability and to meet the high energy demand.

By the year 2030, hydro power will constitute a much lesser percentage of the total national energy consumption due to shortage caused by draught. It is also expected that by then, the use of geothermal energy will grow significantly to 26% of the total energy consumption. Moreover, the discovery of the oil and gas is expected to have a positive effect on the economy and the country as a whole. Fossil and nuclear energy are expected to be introduced as new entrants in the energy supply.

Other Sources of Energy in Kenya

As of September 2013, 3  new wells were discovered in Kenya; one in Ngamia, one in Twiga and another one in Etuko. Added to which, there are 23 International Oil Companies (IOCs) in the 44 licensed exploration blocks in Kenya. As a matter of fact, Kenya has one of the largest crude oil refineries in East Africa.

Another option is the nuclear energy. The Kenya Nuclear Electricity Board expects the first nuclear plant of 1,000 MW to be commissioned for operation in the year 2022.

In the year 2010, the Ministry of Energy and petroleum discovered commercial coal deposits in Mui Basin of Kitui County. This is a significant discovery that could aid the supply shortage of electricity in Kenya.

And of course, another option is the importation of electricity from Ethiopia through the Eastern African Power Pool. The phase 1 of this project is expected to be completed by the year 2016. However, importation is also a step that requires consideration. One of the implications of import is the tax and duty that will be levied by the customs bureau. This may possibly increase energy prices and that of related products.

Hence, the Kenyan energy sector holds opportunities for those operating in the sector. With geothermal, fossil and nuclear energy industries expected to boom due to the increasing demand, businesses in the production and distribution of energy can be tapped as prospects.
For detailed reports on Kenya’s energy sector, it would be beneficial to engage the services of market research experts for in-depth and updated industry knowledge.

This entry in Africa & ME was updated on August 3, 2017 by specialist.