Kenyans can expect to pay less for electricity upon the
inauguration of the region’s largest solar plant next month, in the
northeastern part of the country.
The 55MW Garissa
plant comes as East Africa is increasingly feeding solar into the
national grid, and two years after the launch of Uganda’s 20MW Soroti
power plant.
A new report on renewable power from the
International Energy Agency (IEA) shows that solar is providing new
opportunities for households and businesses.
IEA predicts that Africa’s off-grid solar capacity will triple in the next five years to more than 3,000MW.
The
Garissa solar plant which was to be completed in December, is opening
ahead of schedule. It is expected to bring down the cost of electricity
to $0.05/kWh, and reduce carbon emissions into the atmosphere by about
43,000 tonnes.
“We are happy that the project will be
on the grid by the end of next month. This project is a break from
over-reliance on hydroelectric and geothermal power. Our focus now is on
green energy. We hope with this injection the cost of power will come
down to $0.054 per unit,” Energy Cabinet Secretary Charles Keter said.
Developed by Kenya’s Rural Electrification Agency (REA), the
Garissa solar plant sits on 85 acres and consists of 210,000
photovoltaic (PV) panels.
It can light some 625,000
homes. The plant is built by the China Jiangxi company, and funded by
the China Exim Bank, to the tune of $135.7 million.
Under
its renewable energy policy of 2010, revised in 2012, Kenya hopes to
attract private investors to put money into renewable energy.
However,
the response has been low less than enthusiastic with investors citing
operational and tariff concerns, something Kenya says it has worked on.
“Investors
felt the tariffs were insufficient for projects to be viable since they
do not cover full operational costs, low indexing at 12 per cent that
does not match increase on cost incurred, land acquisition and taxation
among other issues," said Mr Keter.
There were delays
in the construction of the Garissa solar plant as talks for the power
purchase agreement (PPA) with Kenya Power were prolonged by
disagreements on tariffs.
But in September 2016, REA
signed the PPA with the power utility firm to sell electricity from the
solar plant at $0.12 per kilowatt hour (kWh), which is cheaper than
diesel-generated power.
"We are going to see improved
electricity generation and reduced reliance on fossil fuels, savings in
foreign exchange on importation of fuel for power generation. Clean
energy will drive sustainable economic growth and lift the masses out of
poverty," said REA chairman Simon Gicharu.
In the
deal, the power purchase agreement to be signed with Kenya Power is
fixed as opposed to private solar operators who will enjoy a scalable
tariff, technical service (operation and maintenance) for two years,
provision of technology transfer by REA.
Solar-powered station
Last
month, power producer Kenya Electricity Generating Company (KenGen)
said it had approached multilateral lenders for $57 million to construct
its first solar-powered station.
The company said it
was seeking funds from the World Bank, French Development Agency (AFD)
and KfW of Germany for the construction of the proposed 45MW plant, over
a period of 14-months.
"We finished feasibility
studies for the project and we’re now seeking funding; the project will
sit on 100 hectares of land," said KenGen business development director
Moses Wekesa.
Solar plants being environmentally
friendly with minimal operating and maintenance expenses have recently
become the focus of renewable energy as African countries ditch
expensive diesel stations.
Regional governments are now
shifting focus to renewable energy for electrification of off-grid
areas and households that are far away from the grid.
When
Uganda launched its $19 million solar power plant in Soroti in 2016, it
was billed as the largest in the region. The plant run by Access Power
Middle East and Africa, and Eren Renewable Energy powers over 50,000
households in the east of the country.
"Although this
plant has a capacity of 10MW, it is scalable to double that amount,
increasing the stock of Uganda’s solar infrastructure, with the aim of
lowering the cost of electricity," Access managing director for project
origination Vahid Fotuhi said at its launch.
The plant
was built in 12 months, with the Emerging Africa Infrastructure Fund
(EAIF) offering $14.7 million as part of the funding needed.
Netherlands-based FMO led the syndicate to finance the solar farm.
Off-grid solutions
Last
month, Jumeme, a rural electricity supplier, announced that it will
electrify 10 islands in Lake Victoria, with a population of more than
80,000, through off-grid solutions.
The project’s rollout follows a successful pilot that saw the electrification of a village on the Ukara island.
For the pilot project, a 95kW solar hybrid power station was installed; it is now serving more than 1, 000 inhabitants.
According
to Jumeme, this first phase of the micro power economy roll-out project
will see 20 villages electrified by the end of 2018, though the
installation of 11 solar hybrid mini-grids at a cost of $5.84 million,
part of which is financed by the European Union under the ACP-EU Energy
Facility, with support from the African Development Bank (AfDB)
Sustainable Energy Fund for Africa and GIZ.
"Access to
energy is a critical element in empowering people, especially women and
youth. Sustainable energy, especially in rural areas, is central to
addressing the challenge of poverty reduction and ensuring inclusive,
equitable and climate friendly economic growth," said EU head of
co-operation Jose Correia Nunes.
According to the IEA
report on renewable power, the amount of energy from solar grew by more
than 50 per cent, increasing the global output at a faster rate than any
other fuel, with off-grid solar accelerating this growth.
Last
week, it emerged that regional households using small scale-solar power
are reporting a rise in economic activity, with an improvement in
income and job opportunities, according to a new report from the Global
Off-Grid Lighting Association (Gogla) — a global association for the
off-grid solar energy industry and a partner of the Kenya Renewable
Energy Association.
Benefits of off-grid solar
The
report, which provides data demonstrating the economic benefits of
off-grid solar power in Kenya and across the developing world, shows
that nearly 60 per cent of solar owners undertake more work and
enterprise within just three months of installing a solar home system.
The
research conducted early this year, was based on data from more than
2,000 small-scale pay-as-you-go solar owners in Kenya, Rwanda, Tanzania
Uganda and Mozambique.
"With more power for enterprise
such as retail and entertainment together with increased working hours,
over a third of respondents reported an average income increase of $35 a
month," the report notes.
The executive director of
Gogla Koen Peters, said the new report shows that the net economic and
social benefits off-grid solar are a huge opportunity for national
governments in the developing world.
"As this report
shows, off-grid solar is directly delivering significant impacts. We
call on policy makers, Treasury and energy departments to work with
off-grid companies, banks and institutions to break down barriers to
off-grid solar and build a pathway to accelerate energy access," said Mr
Peters.
Currently, one billion people across Africa and Asia — about one in seven people on earth, have no access to electricity.
"With
falling prices, increased efficiency and financial innovation, such as
pay-as-you-go consumer finance, over 120 million people have now shifted
from toxic kerosene lamps, candles and diesel generators to clean
off-grid solar electricity since 2010," the report notes.
The
chairman of the Kenya Renewable Energy Association Kamal Gupta, said
the solar sector will be the key to unlock the economic potential of all
Kenyans regardless of whether they live in an urban or rural area.
"Access
to reliable and sustainable energy is a key enabler that opens the
world to someone sitting in the most distant part of the country without
access to the national grid, allowing them to do the most basic of
things like charging a mobile phone, keeping their business open in the
evening or allowing their children to study at home," said Mr Gupta.
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