Microsoft’s Allen to sell 10 mini solar plants in Kenya

Paul Allen, Microsoft co-founder and owner of Vulcan. PHOTO | AFP 

In Summary

• Paul Allen's company, Vulcan, has been operating small power stations in Samburu and Kajiado in the last two years.
• Vulcan has invested in Uber, Alibaba Group Spotify and is now keen to inject capital in Kenya’s green energy projects.

By NEVILLE OTUKI, notuki@ke.nationmedia.com

Microsoft co-founder Paul Allen plans to sell 10 small-scale solar plants in Kenya that his private company has constructed in recent years.

Mr Allen’s multi-billion dollar private firm, Vulcan, has been operating electricity mini grids in the last two years in Samburu and Kajiado, connecting homes and businesses to solar power as a social tool to transform lives.

Company officials Tuesday said that Mr Allen wanted to use the power projects to demonstrate business viability of rural mini-grids to investors, empower communities and trigger interest among businesses to invest in off-grid power solutions.

The Microsoft co-founder is ranked the 21st richest person in the world with a net worth of $18.9 billion (Sh1.9 trillion), according to Forbes magazine.

Vulcan has invested in Uber, Alibaba Group Spotify and is now keen to inject capital in Kenya’s green energy projects.

“We are looking to transfer ownership of the mini grids to private investors or government agencies with whom we are having talks,” Vulcan programme officer Courtney Blodgett said on the sidelines of a solar energy conference in Nairobi organised by the Netherlands-based SolarPlaza.

“We are keen to invest in other strategic renewable energy projects,” she added.

The company has been selling electricity to Kenyan rural folk at a tariff of between Sh180 ($1.80) per kilowatt hour (kWh) and Sh400 ($4) per unit, depending on their consumption levels.

This is higher than charges for solar power connected to the national grid at Sh12 per unit, partly because customers do not pay upfront charges for connection to mini grids.

The higher tariffs are also due to the fact that mini-grids lack economies of scale associated with the central power transmission in the national grid which is subject to regulatory interventions, ensuring lower tariffs.

READ: Solar power company in Sh2 billion expansion plan

The average revenue from electricity sales to consumers on the mini grids stands at Sh535 ($5.34) per month with the largest consumer using power worth Sh1,550 ($15.38) monthly while the lowest is Sh38.

Kenya’s renewable energy market has recently attracted dozens of investors eyeing a piece of the country’s solar, wind and geothermal resources.

Mr Allen’s Kenyan mini grids have a capacity of between 1.5 kilowatts (kW) and six with each unit powering up to 62 customers.

The grids are operated and remotely monitored by UK-based Steama.co using smart meters, making it flexible to track consumption and payment.

The 10 mini grids are located in Olenarau and Olturoto in Kajiado and Samburu villages of Marti, Opiroi and Barsaloi.

Energy experts reckon that micro and mini grids, especially those that rely on solar-powered sources, offer Africa the shortest route to lighting off-grid towns where stretching national power grids is not cost-effective.

Mini grids involve small power plants (between 10KW and 10 megawatts) and distribution lines connect a limited number of customers outside the scope of the national power transmission network.

Small grids work well in areas with a dense concentration of homes since distribution lines cover short distances.

US-based Powerhive is yet another firm in the Kenyan market that sells power directly to consumers, while Nairobi-based PowerGen has sought approval from the energy regulator to generate and sell power to homes using solar energy micro grids.