Tapping geothermal ranking to fuel growth

Kenya beat Iceland and Italy to position seven in the global geothermal energy rankings by the International Renewable Energy Agency (IRENA). FILE PHOTO | NMG 

By EDWARD MUNGAI

Summary

• Some pretty good news about Kenya surfaced last week but appeared to be drowned out by the noise around the coronavirus.
• Kenya beat Iceland and Italy to position seven in the global geothermal energy rankings by the International Renewable Energy Agency (IRENA).
• Decoupling economic and population growth from environmental degradation is part of Kenya’s sustainable development agenda and a shift to clean energy away from polluting fossil fuels is part of the game plan.

Some pretty good news about Kenya surfaced last week but appeared to be drowned out by the noise around the coronavirus.

Kenya beat Iceland and Italy to position seven in the global geothermal energy rankings by the International Renewable Energy Agency (IRENA).

With a nameplate capacity of 823 megawatts (MW), the country’s geothermal coup needs commendation as the only African nation on the shortlist. More importantly, this recognition should inject fresh impetus into country’s quest of developing industrial zones near the steam power plants.

Currently, geothermal serves as a reliable baseload while hydropower stations, which are very flexible to adjust power output, are acting as spinning reserve for balancing out fluctuations in wind and solar sources. This synchronised ecosystem is working just fine, indicating renewables can be self-sustaining.

The news comes barely two months after the government gazetted subsidised tariffs in February for investors who will set up factories in the proposed special economic zones in Naivasha’s Olkaria steam fields. The low-cost energy incentive aims to attract a diverse set of manufacturers, widen the country’s industrial base and ignite waves of jobs. The task now falls on relevant authorities to move with speed and lay the necessary infrastructure and clear policy frameworks for the operationalisation of the industrial parks. A humming hub for light and heavy industries would help soften the blow on the economy.

Decoupling economic and population growth from environmental degradation is part of Kenya’s sustainable development agenda and a shift to clean energy away from polluting fossil fuels is part of the game plan. But while Kenya is a geothermal powerhouse, the country’s cumulative stock of green energy pales in comparison to its African peers. This is both a function of demand and supply. Even before the pandemic quietly slunk into the country, Kenya’s industrial base, the main driver of energy demand, was already shrinking due to a toxic mix of high operation costs and rigid policies. As a result, new energy additions have been spaced out and at times curtailed despite promising lower tariffs, due to low demand.

The pandemic has sent the economy reeling, with demand expected to further soften as businesses operate at bare-bones level. To reduce economic damage, and besides creation of the geothermal special zones, policy wonks should explore ways of reducing operational costs while driving up efficiency. This would increase activity, ignite demand and grow the economy, spinning off more jobs and firing up energy demand.

On the continent, Kenya’s total green energy stock comprising geothermal, hydropower, wind and solar is ranked ninth at 2,178 MW. South Africa takes the lead with a renewable energy pool of 6,167 MW mostly from solar and wind, followed by Egypt (5,972 MW) while hydropower-rich Ethiopia is third with a green reservoir of 4,450 MW.

More tellingly, Africa represents a paltry two percent of the world’s total developed renewable energy with China alone accounting for 30 percent of the global share. A transition towards green energy is seen to provide the world with a strategic weapon in the fight against climate change, with$3 trillion (Sh300 trillion) already invested in renewables over the last 10 years. The above statistics show Kenya to be a lightweight in green energy development compared to its peers, let alone on the global stage. The country may have a greener generation mix in terms of the share of electricity generated and consumed, but the size of its installed capacity falls short.

For instance, Kenya’s most recent peak electricity demand is1926 MW and was recorded towards the end of February, days before the country confirmed its first coronavirus case, with demand now tailing off.

Compared to South Africa whose maximum demand tops 40,000 MW, one quickly realises the long journey ahead for Kenya in its industrialisation drive. With the pandemic barrelling across world economies, breaking supply chains, it calls for a strategy rethink around Kenya’s manufacturing approach and policies.

Global shortages and supply disruptions has seen several local manufacturers shift operations towards production of healthcare equipment and materials to plug deficits. It has meant factory floors have continued thrumming with activity, creating new lines of jobs and demand for energy. The government should build upon this new vibe through strategic planning and formulation of progressive policy actions as a springboard for an industrial leap.

For Kenya to emerge from the crisis with a more diversified and expanded manufacturing base, a mix of incentives should be lined up, including lower energy costs and reliable supply, along with manufacturing-friendly policies.