How renewable energy can lower power cost

Posted On Wednesday, 20 February 2019 10:18

By Rizwan Fazal

A year ago, one or two months of dry weather meant an automatic switch from hydro power to expensive diesel-generated electricity. This year is different.

The country is calmly awaiting the onset of the long rains without the yester-year worry about the declining levels of water in the Seven Forks dams which generate the bulk of Kenya’s hydroelectric power.

Energy sector players, including Kenya Power, KenGen and the Ministry of Energy, have not called a press conference to announce power rationing or justify increased uptake of costlier thermal power.

DEMAND

To the contrary, the Energy Regulatory Commission (ERC) reported in January that the proportion of wind power in the national grid had surpassed diesel-generated electricity.

Geothermal, solar and wind energy investments in the past decade are beginning to pay off with great benefits to both the energy mix and the country’s current account. Since Lake Turkana Wind Power started injecting into the national grid in September 2018, it has produced 463.069GWH of clean, renewable energy.

This has increased Kenya’s spinning reserve capacity (the generating capacity available to the system operator within a short interval to meet demand in case of a disruption of supply) and saved the country approximately $35 million in fuel imports between November 2018 and January 2019. The multiplier effect of this is being felt at the macro-economic level.

In one year, wind-generated electricity has grown from a negligible under two per cent of the overall energy mix to 14-17 per cent of total installed national capacity during the day and up to 30 per cent during off-peak hours at night.

Geothermal electricity, now tops, contributes 45 per cent of the overall energy with hydro second at 29.8 per cent.

The most expensive power source — thermal — which used to account for nearly half of the national electricity consumption, now contributes less than 10 per cent.

At 8.53 cents per kilowatt-hour compared to thermal’s up to 28 cents, depending on the global oil prices, wind power offers an enticing opportunity for electricity tariff cuts.

POLICY

There is a need, however, for renewable energy providers and policy makers to have discussions on how a new, lower tariff structure for the citizens can be achieved. Wind, geothermal and solar energy are already viable alternatives.

The fundamental question that policy makers and stakeholders should answer is: With an oversupply of electricity, do you wait for demand to grow organically or actively encourage the growth of consumer demand?

Unfortunately, in the short-term, unless the demand for electricity increases, the cost of electricity will not come down.

From an energy consumption per capita indicator perspective, Kenya consumes half more than the predictive kWh per capita — hence the line-up of planned generating capacity. The solution is not to control supply but to fix the demand side.

The government should hold candid and informed discussions with key energy stakeholders and industry players to develop a clear roadmap for the sector. That is the only way that the Kenyan dream of lower tariffs will become reality.

Mr Fazal is Executive Director at Lake Turkana Wind Power Ltd. This email address is being protected from spambots. You need JavaScript enabled to view it.