Low Carbon Logic: How southern businesses

are saving money by going green.

Challenges & Solutions in Kenya

Murefu Barasa

Camco

17th July 2013

Energy

3

Outline

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1. Overview of the energy sector in Kenya

2. Energy and carbon markets in Kenya

3. Opportunities/risks in a carbon constrained future

5

Overview of the energy sector in Kenya

Geothermal, Wind & Solar,

1%

Oil, 16%

Coal/Peat, 1%

Biomass & wastes, 77%

Hydro Power, 6%

Translates to between 35 – 40 million tonnes per year (MoE, 2002)

Translates to between 3.9 million tonnes per year to increase to 10

million tonnes by 2030 (NOCK, 2011)

Sources of Energy

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Overview of the energy sector in Kenya Biomass Dominance (30 year trend)

Source: World Bank Online Database

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Overview of the energy sector in Kenya

0

250

500

750

1000

1250

1500

1750

2000

1971 1976 1981 1986 1991 1996 2001 2006

ENER

GY

USE

(kg

of

oil

eq

. p

er

cap

ita)

YEAR

World

Sub-Saharan Africa

Kenya

Energy Use (Kg of Oil Equivalent)

Source: IEA Online Database

8

Overview of the energy sector in Kenya Current Electricity Sources

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Overview of the energy sector in Kenya

Developer Project Type Capacity (MW) Estimated

Commissioning Date

KenGen Geothermal Well Head Units Geothermal 70 Jun-11 Tana Development Hydro 20 Oct-10 Kipevu Thermal Plant Diesel 120 Jan-11

Eburu 2.5 MW Geothermal 2.5 Dec-11 Sangoro Hydro 21 Oct-11 Ngong 3 Wind Wind 15 Jul-12 Kindaruma 3rd Unit Hydro 25 Oct-12

Olkaria IV Geothermal 140 Jan-13

Olkaria 1 Units IV and V Geothermal 140 Jan-13

KenGen/ IPP Mombasa Coal Coal 300-600 Jul-13

Athi River MSD Plant (Triumph) Diesel 81 Mar-12 IPP Athi River MSD Plant (Gulf) Diesel 84 Mar-12

Thika MSD Plant (Melec) Diesel 87 Mar-12 ARM Coal (Mombasa) Coal 20 Jul-12 Lake Turkana Wind 300 Jul-13 Osiwo Wind Wind 50 Jul-13

Aeolus - Kinangop & Ngong Wind 160 Jul-13

OrPower4 (Olkaria III) Geothermal 52 Jan-14 Small Hydros Hydro 25 2011-2015

IMPORT Ethiopia Hydro 200 Jul-14 Total 1,913-2,213

Pipeline Projects

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Overview of the energy sector in Kenya Electricity Prices

Source: KPLC Statistics 2011

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Energy and Carbon Markets List of CDM Projects Registered

PROJECT TITLE (AS AT16/JULY/2013) DATE SPONSOR/DEVELOPER tCO2/YEAR

1. Bagasse Cogeneration 03/09/2008 Mumias Sugar Company 129,591

2. Olkaria III Phase 2 Geothermal Expansion 04/03/2010 Ormat 177,600

3. Olkaria II Geothermal Expansion Project 04/12/2010 Kengen 149,632

4. Lake Turkana Wind 28/02/2011 Lake Turkana Wind

Consortium

736,615

5. Aberdare Range-Mt Kenya Reforestation:

Kipipiri

11/07/2011 Green Belt Movement

8,542

6. Aberdare Range-Mt Kenya Reforestation:

Kirimara

05/10/2011 Green Belt Movement

8,809

7. Redevelopment of Tana Hydro Power

Station

11/10/2011 Kengen

25,680

8. Karan Biofuel CDM project – Bioresidues

briquettes supply for industrial steam

production

25/09/12 Karan Biofuel Limited 43, 699

9. Ol Karia IV Geothemal 28/12/2013 Kengen 651,349

10. Ol Karia I Unit 4&5 28/12/2013 Kengen 635,049

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Energy and Carbon Markets Policy and Market Changes

• EU ETS Energy and Climate Directive of 2009 states that no

CERS from non-LDC countries registered after 31st Dec 2012

will be accepted

• Uncertainty in international legal frameworks, Euro crisis and

an oversupply of carbon assets led to the decline in prices

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Energy and Carbon Markets Policy and Market Changes

Source: World Bank 2013

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Opportunities/Risks in the Energy Sector

1. Past dependency on biomass energy sources (-ve)

2. Dependence on climate sensitive energy sources (-ve)

3. Geothermal development (+ ve)

4. Greater participation of the private sector (+ ve)

5. Regional networks and pooling initiatives (+ ve)

6. Prospects of fossil fuels: Oil in Turkana, gas off the coast and coal in Kitui (=)

Summary of Risks & Opportunities

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Opportunities/Risks in the Energy Sector

1. Updating and use statistics for planning and monitoring

2. Mainstream bioenergy sources (Awareness, sustainability, R&D)

3. Regional power pool

4. Diversify the energy generation base

5. Encouraging private sector participation: Net metering, energy banking, FIT policies, mini/micro-grid solutions

Proposed Sectoral Interventions

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