Wednesday, September 20, 2017

Staff Mail

Custom Adv 1

Introduction
The 5000MW capacity additional program was initiated by the Government to rapidly expand the country’s power generation capacity. In the last five years before the Jubilee Administration took over, the power sector added only about 700MW of generation capacity and associated transmission and distribution infrastructure. This was to facilitate the supply of electricity to the nation in line with the power sector generation investment roadmap: the Least Cost Power Development Plan (LCPDP) for the period of 2013-2033.
In the Least Cost Power Development Plan for 2013-2033, it was envisaged that within the next four years of a total of 1,493MW of new generation capacity would be added to raise the total installed capacity to 3,253MW- nearly doubling the existing capacity of 1,664MW as at March 2013.
When the Jubilee Administration took over in 2013, the installed capacity of 1,664MW was considered insufficient to spur economic growth and uplift the standard of living of Kenyan people. The Government determined that the country needed an additional 5,000MW and therefore the Ministry of Energy and Petroleum launched the “Roadmap for Fast Tracking Power Generation” Between 2013 and 2017 to install the additional capacity of 5,000MW.


Objective
The 40-month program is aimed at bringing down the cost of energy by 40 per cent. It involves several projects in geothermal (624MW), wind (25.67MW), hydro (799.52MW), thermal (760.84MW), biomass (23.50MW) and solar (0.20MW). The program also involves putting in place associated transmission facilities to address the distribution of the generated power. Currently, Kenya’s total installed power capacity now stands at 2,234 megawatts a boost from 1,664 megawatts in 2013.
The additional capacity was deemed necessary to avail adequate capacity to match the projected demand growth, to achieve competitive electricity tariffs through integration of least cost generation projects, diversification of the generation mix reducing the contribution of hydropower and avoidance of over-reliance on hydropower. There are contributions of geothermal and wind sources, as well as natural gas and coal power plants which produce clean energy and are not affected by the variability of weather. The Ministry anticipates that the proportion of power generated from expensive petroleum based fuels will be greatly diminished, with the attendant reductions in the Fuel Cost Charges.
In an effort to encourage accelerated investment in renewable energy development, The Ministry of Energy and Petroleum formulated the feed-in-tariffs policy that encourages small renewable energy projects on wind, solar, geothermal, biomass, and hydro-power systems whereby off-take is guaranteed at pre-determined bulk purchase tariff. It aims to attract private sector investments in electricity generation.
The committed projects amounting to 4,925.38 MW capacity are at various stages of power purchase agreement (PPA) process and project development, while the procurement process of four proposed projects with a combined capacity of 1,830MW has been rescheduled. An additional 400MW of new capacity is anticipated from Ethiopia in the medium term after the completion of the 500KV HDVC Ethiopia-Kenya transmission line in 2019.
So far, eight projects under the 5,000MW project have been commissioned with a total installed capacity of 476MW. These include: Kindaruma 3rd Unit (32MW), two geothermal units (25MW), Olkaria IV (140MW), Olkaria I Units 4 & 5 (70 of 140MW commissioned), and OrPower4 (16MW). These developments marks the highest capacity commissioned within the shortest time in the history of this country and taking account of the fact that only 87MW (18%) is from fossil fuels.
Demand will rise sharply as the County Governments take shape and numerous economic activities spring up in the counties. In particular, energy intensive activities such as mining, production of iron and steel products from local iron deposits, irrigation of large tracts of land for food security and agro-based industry, operation of petroleum pipelines for both crude and refined fuel oils, petrochemicals production including steel, will require a lot of power. Further, electrification of designated rail lines, installation of escalators at shopping malls and airports, and new economic zones will also require a lot of power.

In order to provide affordable electricity for these activities which are expected to sharply transform our economy, the following roadmap to raise the generation capacity by 5000 MW from the current 2,234 MW to slightly over 6,700 MW by 2016 is proposed. Through this roadmap the generation cost is projected to reduce from 11.30 to 7.41, commercial/ industrial tariff from 14.14 to 9.00 and domestic tariff from 19.78 to 10.45 cents. The Ministry of Energy is optimistic, it maintains that there would be no time overruns despite the glaring delays in the construction of key power projects like coal and geothermal.

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