WATTS UP | The Energy Magazine August-September 2017 by WATTS UP MAGAZINE

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THE ENERGY MAGAZINE AUG-SEPT 2017

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JUBILEE v/s NASA Billions for the energy sector

Every Mile of Changing Lives Is Coal Cool? Ksh 200 Billion Investment in Lamu

The Charcoal Act Kitui County comes ďŹ rst

Oil Pipeline Recapturing the regional market

WATTS UP

AUG - SEPT 2017

11 LIGHTING UP AFRICA IN FIVE YEARS

The grand plan involves connecting 130 million people to the grid system, 75 million people through off-grid systems and provide 150 million people with access to clean cooking energy.

14 BURNING BRIQUETTES TO SAVE FORESTS After using her pen to highlight the challenge of Kenya’s depleted forest cover for years, the former journalist has rolled up her sleeves, and as AGATHA NGOTHO finds out, she is at the heart of providing solution.

18 JUBILEE, NASA LINE UP GRAND ENERGY PROJECTS The ruling party vows to pick up its 5000+megawatt initiative as the Opposition lay plans for new projects. Whichever side the investors look, the political formations are skilled at whetting the appetite of investors.

21 EVERY MILE OF CHANGING LIVES Residents of Narok talk of improved security and low cost of energy as the government extends low-voltage electricity networks to households within the 600 metre radius from a transformer.

29 RENEWABLE ENERGY IS OUR FUTURE – PS NJOROGE The PS says clean energy is at the centre of government’s ‘affordable energy to all’, and so several multilateral and bilateral partners are on board.

33 QUESTION AND ANSWER “We need to show young girls that being an engineer doesn’t mean losing our femininity,” Wangari Malinda, data centre engineer.

37 BUYING POWER FROM SOURCE The Energy Bill envisages an arrangement where producers like KenGen will be allowed sell power directly to big consumers all the over the country, cutting on transmission cost.

46 DRILLING NEW WELLS OF STEAM After causing consumer bills to drop by up to 35 per cent with the 320MW sold recently to KenGen, the GDC has embarked on de-risking fields to encourage private sector to take part in digging out the rest of Kenya’s 10,000+ MW assets.

48 UNMASKING KPC OF THE FUTURE The agency has a vision to become one of the top revenue energy state agencies. By upgrading its pipelines, investing in human resource development and building a modern jetty in Kisumu, even its revenue mix is set to change.

50 IT’S ANOTHER YEAR OF STRONG PERFORMANCE! Global Credit Ratings (GCR) has affirmed Stima Sacco Society Limited’s stable long-term and short-term ratings of BB+ (KE) and B (KE) respectively.

54 SETTING FOUNDATION FOR GREEN BONDS IN KENYA Stakeholders in Kenya are working to set standards and policy framework for the lucrative financing option that has already taken root in other developing countries.

LEVERAGING LAWS TO BOOST INVESTMENTS From competitive licensing regime to price controls and curriculum development, the ERC says enforcement of regulations has attracted energy firms in droves.

11 21

Chief Energising Officer

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Editors Note

ith elections just around the corner, the JUBILEE government is oozing with confidence hoping to retain the top seat. One of the most notable success stories to date is the energy pillar in their manifesto. Since 2013, 4 million homes and over 22,000 schools have been connected with power. Further, an addition of over 300,000 streetlight poles have been installed. These projects have opened up the rural economy. That said, Kenya still remains a good destination for energy investments with over $6B in committed funds across the sector for the next three years. We have over 30 IPPs around the country at different stages of operation & finalization. We do expect over 2,500MW on board in the next three years. The major transmission line project between Nairobi–Mombasa is in its final stages of being energized which will be a big relief to consumers in Mombasa and Nairobi. The challenge facing the next government is on how to increase demand and absorption of the excess capacity. An initiative to discuss the pressing issues in the energy sector was held at Strathmore University referred to as the Great Energy Debate where the topic ‘Electricity Demand’ was discussed. It gave a glimpse of the situation and innovative solutions by the stakeholders. The upstream market has seen oil discoveries in Baringo and gas in Lamu. The ambitious project of exporting oil from Turkana has been left to the next government hoping that the commercial aspect will begin soon. The community issues that have dogged the sector need to be tackled peacefully especially the distribution of proceeds from the oil and other natural resources. The passing of the Energy Bill and the Petroleum Bill needs to be considered a priority by the new government to enable further investment in the extraction of natural resources.

The downstream has seen the expansion of the retail network for petroleum products and gas. Petrol stations have turned into lifestyle centers making them viable business segments with multiple revenue streams. The counterfeit war is still far from being won but steps by KRA, ERC and law enforcement agencies are taking shape and wins of significance are being recorded in the crossborder trade dispute with Dar Es Salaam on gas quality. With the two manifestos by JUBILEE and NASA promising to roll out huge energy projects, the consumer is bound to be the ultimate winner. We wish our readers a happy electioneering period and contesting candidates all the best.

The Team Editor: Nicholas Waitahi Art and page Layout: Lewis Njagi J. Ngige Contributors: Marion Wagaki Nicholas Waitathu Cynthia Wanjiru Agatha Ngotho Advertising: Stella Wambui (Stella@brandsandbeyond.com)

Copyright 2017 Watts Up. No part of this publication may be reproduced or transmitted in any means, electronic or mechanical, including photocopy, or any storage and retrival systems, without prior written permission from the publishers. Watts Up is entirely independent of all commercial interests in all sectors and regions of its coverage. Unsolicited manuscripts will not be accepted for publication.

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CORPORATE NEWS

THE ULTIMATE PATH TO CHEAP POWER From building 7,000-kilometres of high voltage transmission lines to removing diesel from the mix and evacuating renewable energy to the national grid, Ketraco is on the final leg of affordable electricity BY MARION WAGAKI

Kenya Electricity Transmission Company LTD. (Ketraco) Managing Director Fernandes Barasa

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CORPORATE NEWS

ower consumers will win big in the next three years as government and donor community step up investments in development of power evacuation infrastructure. In the next three years, Kenya Electricity Transmission Company Limited (Ketraco) has set itself a target of constructing 7,000 kilometres of high-voltage (132Kv) lines to transmit power to the national grid. Ketraco currently implementing its second five-year strategic plan, seeks to lower cost of electricity by transporting more power from the various sources. The company’s managing director (MD) Fernandes Barasa says the new infrastructure comprises 2,200km of 132kV lines, and 2,400km of 220kV lines. Other components are 2,000km of 400kV lines and 612km of 500kV HVDC lines that will ensure the national grid operates at optimal capacity. “We have completed projects amounting to 1400km of energised transmission infrastructure. These are efficient and reliable projects that are already transmitting power to the national grid at high voltage. They have attracted investors from various global corners thus contributing to economic expansion”, said Mr. Barasa. Mr. Barasa explained that Lamu, Garissa and Isiolo joined the grid for the very first time this year, hence saving the exchequer approximately Ksh1 billion on fuel costs to run the thermal generators. Assets “We have also energised part of the Suswa sub-station project, our biggest substations that will be the largest in East Africa once all the correlating projects are completed, becoming the region’s energy hub”, Barasa confirmed. “As we celebrate eighth anniversary later this year, the Company has multiplied its asset base almost tenfold, from Ksh9 billion in 2009 to Ksh78 billion in the last financial year” he said. Currently, Mr Barasa explained, the company is undertaking 35 projects to the tune of Sh300

WATTS UP AUG - SEPT 2017

CORPORATE NEWS

billion committed by various international organisations. For example, China Exim bank, India Exim bank, African Development Bank, French development agency (AFD), World Bank, European Investment Bank, government of Spain and Belgium. By the time the projects are completed, the length of transmission lines of high voltage will have reached 8,000 kilometres. For the last eight years, Ketraco has been able to construct about 1,000 additional kilometres on top of the 3,300 that the country relied on between 1954 and 2007.

Diesel generators “We want to double what has been done in over fifty years in five years. This means not only reinforcing the grid, but also upgrading the infrastructure, scaling up electricity access, modernising the transmission system and evacuating power from new renewable energy generation sources that are coming on board” he said. The company also plans to strengthen some of its project systems which will improve the transfer capacity of electrical energy and address the challenges of low voltages, high transmission losses, unreliability of supply and network security.

Nairobi - Mombasa The Nairobi Mombasa line is set to be launched in the month of July and will reduce the Government bill by ksh 3.6Billion per year that is used to keep Mombasa and its environs on thermal energy. We do expect the bills to

Ketraco Transmission Lines

“We are not only reinforcing the grid but also upgrading the infrastructure, upscaling electricity access and modernising the transmission system” – Fernandes Barasa, Ketraco Chief Executive reduce by 20% minimum in the coming months. Already there is 482km 400/220kV Mombasa-Nairobi line and the 100km 400kV Nairobi Ring project, among others. These two are aimed at reducing reliance of diesel generators in the coastal region and eliminating power black outs in the capital. The Nairobi Ring project, he said is providing an alternative power supply path into the Nairobi Metropolitan area that will reduce the load on the existing overloaded substations, increasing the reliability of power supply.

Ethiopia-Suswa Barasa added that through the completed projects, the company will also lease out the excess fibre the company has in their lines. At the moment, Barasa confirmed that his company is already facilitating telecommunication companies via Chemosit-Kisii, Rabai-Malindi-GarsenLamu and Rabai-Galutrans transmission lines. To promote regional power, the

company is constructing three regional interconnectors. This will achieved following signing into partnerships with other institutions through which regional power integration is being spearheaded. For example, Ketracois implementing the Kenyan end of the 610km Ethiopia-Suswa (Kenya Ethiopia interconnector) 500kV HVDC line, the 100km Isinya-Namanga (Kenya-Tanzania-Zambia interconnector) 400kV line and the 127km Lessos-Tororo (Kenya-Uganda Interconnector) 220kV line. The completion the projects will facilitate regional power trade. New projects to boost national grid include Loiyangalani-Marsabit, Olkaria and Menengai in the Rift Valley as well as Dongo Kundu and Lamu among other regions.

Menengai-Solio “Our 430km 400kV Loiyangalani-Suswa line will evacuate power from the Lake Turkana Wind Project, feeding it to the national grid at Suswa substation. This project is a game changer as it will transmit 300MW of wind energy, a relatively new source for the country”, he added. He said they were about to complete the first transmission line dedicated to the evacuation of power under the 5,000+ MW project, the Menegai-Soilo project The company has been facing challenges acquiring the wayleave corridor in order to evacuated more power and feed it to the national grid. “There has been a misconception by the public, who expect us to pay 100 percent of land value. But we

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CORPORATE NEWS

200 MW for transforming SGR trains to electric trains

are not taking over the land, we are just compensating for the limited loss of land use”, he said. He added, “ There are regions with a lot of hostility, when their demands are not met, we get concerned over the safety of our staff and even vandalism of the transmission infrastructure”.

Communities This he noted had compounded the issue by first delaying the utilisation of the energy that is already produced especially when the generation is ready for evacuation, and the transmission line to evacuate that power is not ready. “The Government ends up paying the cost of generation and yet that energy is not being utilized”, he said. Another impact that Mr Barasa expects is a drop in the cost overruns when a project is delayed. Usually contractors have to be demobilised and the cost of doing so is very high. “We are however trying to manage communities’ expectations by having more sensitisation programmes involving the local and political leadership as well as partnering with them to implement some community projects”, he said. Barasa noted that with such confusion, the company is also consulting with other government to agencies so that the 2012 National Land Act can be amended to include procedures to be applied for acquiring wayleave for energy, pipeline and fibre projects.

WATTS UP AUG - SEPT 2017

FUNDING

LIGHTING UP AFRICA IN FIVE YEARS The grand plan involves connecting 130 million people to the grid system, 75 million people through off-grid systems and provide 150 million people with access to clean cooking energy BY NICHOLAS WAITATHU

frica Development Bank (AfDB) will spend Sh1.2 trillion ($12 billion) in the next five years to boost electricity access among the more than 350 million people in Africa. Under a new approach -New Deal on Energy for Africa’ strategy, the bank will also mobilise between Sh4.5 trillion and Sh5 trillion ($45-50 billion) respectively from the private sector to light up and power Africa. Light up and power Africa is one of the priority areas the bank is fast tracking under its 10-year strategy. Africa has 645 million citizens without electricity and 700 million who need clean cooking energy. In Kenya, electricity costs more than in other countries on the continent. The country has made

Amadou Hott, the bank Vice-President in charge of Power, Energy, Climate and Green Growth during the 2017 Annual Meetings in India recently said the money will be spent to connect people to the grid, off grid and enabling consumer to access clean cooking energy.

electrical power sources diversification a priority and developed the Menengai Geothermal power project

“The Bank plans to connect 130 million people to the grid system, 75 million people through offgrid systems and provide 150 million people with access to clean cooking energy,” said Mr. Amadou. He added, “AfDB has demonstrated its capacity to deliver for Africa through its vision to light

up and power Africa. The Bank has financed well-structured public and private sector projects in the sector. Nearly 50 projects were approved in the energy sector in 2016 by the Board of Directors, with the largest ones having cross-sectoral implications in areas such as governance” said Mr Amadou.

Off-Grid Revolution Access to electricity he says remains a challenge to majority of Africans and the bank is determined to change the trend through the new energy strategy partnership. The Bank’s goal Amadou added is to help achieve universal access to electricity by 2025. The Bank is at the forefront of the renewable energy and ‘Off-Grid Revolution’ in Africa. It also hosts the Africa Renewable Energy Initiative, jointly developed with the African Union (AU) that has attracted US $10 billion in investment commitments from G7 countries. Countries that have recently benefited from the Bank’s funding in the energy sector include US $11 million and $7 million loan and grant to South Sudan with the Juba Power distribution system rehabilitation and expansion project and Sh13.5 billion ($135 million) loan for the second phase of the Last Mile Connectivity in Kenya.

FUNDING

In Kenya, electricity costs more than in other countries on the continent. The country has made electrical power sources diversification a priority and developed the Menengai Geothermal power project, financed by AfDB to the tune of Sh50.3 billion ($503 million).

Full Potential The plant is expected to have a production capacity of 400 MW to will provide reliable, clean and affordable electricity to thousands of households and industrial structures. “For Africa to reach its full potential and sustain its growth there is need to prioritize

the establishment of affordable and reliable energy mix,” said Amadou.

the installed capacity of the Palmarejo power plant by 22 MW.

He added, “This will further play a fundamental role in improving the lives of millions of people across the continent as there will be a positive impact on education, industrialization and job creation.”

It improved access to electricity for households and businesses from 61 percent of the population in 2006 to an estimated 95 percent in 2015, reducing the country’s energy import bill. A similar project in Lesotho, financed by an ADF mix of loans and grants totaling $14.8 million helped extend connections to 6,230 consumers.

The Bank in 2016 marked the completion of two energy projects approved in 2007 and 2009. A project to scale up electricity production, transmission, and distribution on the island of Santiago, Cabo Verde financed to the tune of US$6.52 million through the ADF window which increased

Private Capital Under the component of on-grid generation, the new energy deal plan to deliver sufficient on-grid energy for

FUNDING

Skyline in Africa industrial, commercial and residential consumption through the building of 800 power plants with capacity of 200 MW. The achievement of the strategy will see 130 million new grid connections. The bank will create 300 companies with the similar scale to that of M-KOPA in Kenya-the most successful African offgrid “Pay-as-you-go” solar system and thus lead to delivery of 75 million off-grid connections. Other countries in the world have registered remarkable progress in terms of their energy capacity. For example, China installs 4 GW of

electricity every four weeks while Vietnam achieved an annual connection of 1.1 million people and achieved almost universal access to electricity within 10 years. Bangladesh connected 660,000 people per year via off-grid systems. African countries Amadou said, should increase the share of their GDP devoted to the energy sector: raising this from the current 0.3 percent to 3.4 percent will unlock $50 billion per year. “Support African countries on much needed energy sector reforms, regulations, reforms of the utilities and implementation of cost-reflective tariffs. These are critical for leveraging private sector capital

investments. Raise the level of political will and action to light up and power Africa,” he added. The bank in a document dubbed Energy Sector Capacity Building Diagnostic and Needs Assessment Study, indicates that infrastructure in the power sector in the continent is straining. “This is because the African power infrastructure delivers only a fraction of the services found in more advanced developing regions. All the countries of sub-Saharan Africa, with their combined population of 800 million, generate roughly the same amount of power as Spain –with a population of 45 million people,” says the report.

THE ENTREPRENEUR

BURNING BRIQUETTES TO SAVE FORESTS

After using her pen to highlight the challenge of Kenya’s depleted forest cover for years, the former journalist has rolled up her sleeves, and as AGATHA NGOTHO finds out, she is at the heart of providing solution. She was only on an assignment to cover the energy crisis when Kenya was hit with frequent power rationing eight years ago. The crisis had been attributed to water shortage due to the loss of substantial forest cover in the Mau forest BY AGATHA NGOTHO

osephine Wambui says that it is then that an idea of giving poor people an alternative source of cooking energy other than wood fuel was born. “In 2009, there was drought in the country and apart from food insecurity there was

WATTS UP AUG - SEPT 2017

also scarcity of water. This was due to forest depletion by people searching for firewood, charcoal burning and farming in the forest. At the time the government was thinking of creating alternative sources of energy to increase power in the national grid, and it was evident that Kenya could not depend

only on hydroelectric power anymore,” says Josephine Wambui, a freelance journalist. As she was working on her story, she realised that much as the government was addressing the energy problem from the macro level by tapping into other power

THE ENTREPRENEUR 15

No smoke, more heat, much healthier

sources such as geothermal and wind, this would not translate to a poor man’s energy. “People living in the villages will still use firewood and charcoal much as Nairobi and other towns have power or what I like to call the rich man’s energy. I wanted to offer a solution to this problem even if it not much but at least I can make a contribution,” Wambui says. She decided to venture into charcoal briquettes production, which directly helps to increase the biodiversity of the forest by placing a livelihood value on maintaining habitat rather than felling trees.

Training Wambui adds that briquettes are proving

to be an alternative to the standard use of environmentally damaging fuels such as firewood. She started researching on what raw materials and machines are needed in briquette making as well as people who could train her on how to do this.

adding the binder using the appropriate proportion. This is then fed to the machine to get the final product which is dried in the sun for 4-5 days depending on the weather. The briquettes are then ready to be used.

She was trained from Practical Action, an organisation that supports energy initiatives in Kenya, and soon began her briquette making business in 2012 with only Sh10, 000.

Markets

The freelance journalist says she used the money to buy a machine and combustion waste such as sawdust, charcoal dust and old newspapers as her raw materials. The process of briquette making includes mixing all the raw materials and then

Wambui sells a 50kg bag of briquettes for Sh1, 500 with a kilogramme going for Sh30. Ordinary charcoal costs between Sh1, 700 and Sh1, 800 per bag. She employs four people who help with the production of the briquettes. Her main markets are mainly schools who are mass consumers of wood fuel. “Briquettes are more cost effective because they burn longer for about four to five hours than ordinary charcoal and you use Cont.......Page 40

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OPINION

IS COAL COOL? By James Ngomeli, Chief Energising Officer

he world’s reaction to US president’s Donald Trump pull out from the global accord this year cast a glance on what is the human race ignorance. The entire world is on a race hoping to reverse or at least curtail the adverse effects decades of pollution has had on our planet. No doubt, the 200 billion shilling investment on the Lamu Power Plant has now turned into reality, what had been a glaring nightmare for some; and with enough reason. The Lamu Power Plant is set to be the largest power station in Kenya sitting on 945.4 acres (395ha) and a potential generation of 1, 050MW (1, 410, 000hp). This has invited a lot of publicity mostly on the economic viability of coal as a source of power and others citing solar and wind power as a better alternative to coal. We cannot ignore the environmental concerns of coal for a country that was ranked with the cleanest air in a report

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released by International Energy Agency and The Eco Experts in 2016. However, the National Government and the media seems convinced on the economic viability of coal especially job creation. On the other hand environmentalists and health experts say the social cost and health burden of running a coal-fired power plant exceeds its economic benefits a factor that the government should clearly address. The communities at the coast where the plant is to be established should not be left to speculate on the effects the plant will have on their health, environment or otherwise. Expert opinion should be invited and the pros and cons publicized for Kenyans to decide if they are for or against it. Despite the deep division within the government and environmentalist coal has

been used as the base for industrialization all over the world. Secondly the expensive nature of Wind and Solar initiatives has not gone down well with countries that are incurring huge debts on renewable energy. The question remains how far we can take environmental concerns and growth of the country’s energy sector. What can we sacrifice to get cheap power and faster growth? Our friends in the west have developed through coal. It will take the country another 10 to 15 years before solar and wind can be plugged into the manufacturing sector and our growing SMEs. The development of storage facilities to counter the fluctuation in the use of wind and solar energy is still very expensive and will take more years to be affordabe in large scale.

Your Energy Communication Expert

MANIFESTO

Jubilee launching their manifesto

JUBILEE, NASA LINE UP GRAND ENERGY PROJECTS The ruling party vows to pick up its 5000+ MW initiative as the Opposition lay plans for new projects. Whichever side the investors look, the political formations are skilled at whetting the appetite of investors. By MARION WAGAKI

nergy development is set to remain a big investment opportunity in Kenya irrespective of the outcome of the August 8 polls. In the eye of all the presidential candidates, the sector as one of the key drivers of the country’s ambition to attaining high industrial levels. In their manifestos, presidential candidates have vowed to pump billions more into the sector with a view to boosting electricity supply and stimulating high growth. Top on their list of priorities is promotion of clean energy which is still marginally used by Kenyans as majority use firewood and charcoal. Jubilee party, headed by President Uhuru Kenyatta, plans to build on what it started four years ago, for example, the 5000+ MW plan to boost the national grid and thus make cost of doing business in the country manageable. Similarly, NASA candidate Raila Odinga maintain that adequate energy is critical to arousing the economy and more so in enhancing industrialisation.

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Achieved Jubilee manifesto is leaning towards what has been achieved for the last four years unlike NASA whose manifesto is touching on the intentions they plan to committee to ensure Kenyans benefit from sufficient supply of energy. Uhuru says it is only by maintaining momentum in upgrading slums with clean water and sanitation, access roads, street lights, schools and health centres as well as income generating activities. “This will help improve the lives of 4 million people living and working in slums. We have given priority to clean energy -geothermal, wind power, solar and hydro, which now accounts for over 75 percent of the installed capacity compared to the world average of only 24 percent,” says Uhuru.

Street lights Jubilee in the next five years plans to install street lights in all urban centres to facilitate the 24-hour economy and ensure that by 2020 all Kenyans will be connected to electricity either from the national grid or

MANIFESTO 19

Jubilee party, headed

NASA launching their manifesto

by President Uhuru Kenyatta, plans to build on what it started four years ago, for example, the 5000+ MW plan to boost the national grid and thus make cost of doing business in the country manageable.

an off-grid source. “We will also complete the development of new power plants currently under construction including the 310 MW Lake Turkana Wind Power Plant (the largest wind power plant in Africa), and the two units in Olkaria that will add another 210 MW to the grid”, the president said when unveiling the manifesto. According to Jubilee, they will further implement the 50 percent lower tariff for firms who run night shifts between 10pm and 6am to stimulate the 24-hour economy and reduce energy costs for heavy users. Raila says commercial energy, particularly electricity remains expensive relative to other competitors, thus undermining competitiveness.

Economic opportunity The cost in terms of prices Raila says is compounded by unreliability which adds indirect costs of self-provision through generators and disruption of production. “NASA government will pursue the reforms and investments necessary to ensure competitive and reliable electricity is provided to Kenyans”, Odinga said during the unveiling of their manifesto. NASA argues domestic energy is a critical need that has not received the attention it deserves in terms of the country’s total energy consumption the domestic biomass energy (firewood wood and charcoal) which accounts for 70 per cent of total energy consumption while petroleum (for transportation) accounts for 20 percent and

electricity only 10 percent. Access to clean affordable energy is one of the interventions they say is required to address poverty. “But it is not just a need, it is also an economic opportunity that has the potential for creating many jobs and diversifying the rural economy”, Odinga said.

Modern skills Meanwhile, NASA manifesto terms energy poverty as a serious challenge in this country noting that low income households spend a much larger share of incomes on energy than they should. As NASA, they have promised to adopt modern skills and innovations that can deliver clean affordable energy including improved stoves, biogas briquetting instead of the traditional charcoal burning methods which according to them can increase the charcoal yield from the same timber three fold. “The NASA Government will work with stakeholders to increase the adoption of these technologies, as well as supporting further research and development”, NASA Flag bearer said. She added, “There are many viable technologies and innovations that can deliver clean affordable energy, including improved stoves, biogas, briquetting agricultural waste.” “We will also complete the development of new power plants currently under construction including the 310 MW Lake Turkana Wind Power Plant, and the two units in Olkaria” – Uhuru Kenyatta

AUG - SEPT 2017 WATTS UP

COUNTY FOCUS

REGULATING CHARCOAL IN KITUI The county not only requires transporters to pay Sh5, 000 for permit another levy of Sh100 per bag as cess, but also to plant trees and finance forest conservation. By AGATHA NGOTHO

itui County was recently recognised as the best devolved government in forest conservation and tree growing.

That was thanks to the 2015 enactment into law of the Charcoal Management Bill that was drafted in 2014. According to George Mulayta, the County Executive Committee member in charge of the Ministry of Environment, Energy and Mineral Investment Development the law emphasis on conservation while allowing production of charcoal in a more sustainable way. “One can only harvest branches for charcoal burning but not cut down a tree but for one to do this you must be registered under the Charcoal Production Associations (CPAs). We also train producers on modern method of charcoal burning using the kiln,” he explains. Mulayta adds that the Act also provides for

WATTS UP AUG - SEPT 2017

the establishment of Charcoal Transport Association’s (CTAs) but the county government often does environmental assessments before allowing transportation of charcoal from the County. According to the Act, charcoal transporters have to be issued with a permit that costs Sh5, 000 and they are also required to pay cess to the County government of Sh100 per bag. “The CTAs also pay an additional Sh20 per bag of charcoal to the producer groups for the purposes of conservation. The CPAs are mandated to plant trees as they produce charcoal,” Mulayta says.

Charcoal centres So far there are nine CPAs each with a membership of 2,230 members while there are about four major CTAs with at least 270 members and both support over 10,000 households. In future, the minister says, they want to

establish charcoal centers and also brand their charcoal so that they are able to trace the product with the country. He however noted that the county government was facing challenges mainly enforcement to ensure that every group complies with the regulations. To ensure smooth compliance of the regulations and prevention of charcoal smuggling, Mulayta the County government often works with other government relevant agencies, for instance, the administration police. The county government he adds carry out surveillance and monitoring to ensure producers adhere to the rules and use the technology recommended for charcoal burning in order to be efficient.

First county law on charcoal “We are yet to achieve the objectives of the Charcoal Management Act and we are working towards strengthening the

COUNTY FOCUS 21

Hon. George Mulatya receives an award from the First Lady Margaret Kenyatta for the Best County in Tree Growing and Forests Conservation in Kenya.

enforcement team. We are doing this with the national government agencies like the Kenya Wildlife Service so that it can help in ensuring charcoal producers do not encroach in the National Reserves in Kitui and cut down trees for charcoal burning which they later sell to the CTAs illegally,” he says. The County is also working to establish a Tree Growing Act to compliment the Charcoal.

Management Act This, he explains, will entail educating and creating awareness on the importance of tree conservation so that we grow more trees as we continue with charcoal production. “We take pride in being the first County to enact a charcoal Act in Kenya and we hope other counties will follow suit so that we conserve our forests and attain the 10 percent tree cover,” he says.

Sustainable land use According to the Act, the objectives of the law includes contributing to poverty reduction, employment creation and improved livelihoods through sustainable use, conservation and management of forests and trees.

The Acts also aims to contribute to sustainable land use through soil, water and biodiversity conservation, and tree planting through the sustainable management of forests and trees. “Promote the participation of the communities, private sector and other stakeholders in forest management to conserve water catchment areas, promote dry land forestry to produce wood fuel, charcoal and non-wood forest products,” the Act states. The Act further states that any person who commits a breach of, or fails to comply with its provisions is liable on conviction to a fine of not less than Sh50,000 or to imprisonment for a term of not less than one year, or to both such fine and imprisonment.

consumption-Energy Act 2006 and Forest Act 2005. According to a report from the Kenya Forests Working Group, there are many gaps the charcoal value chain including lack of awareness of rules governing legalized charcoal production, unsustainable production from naturally growing trees instead of deliberate planting for production The group also notes that there is inadequate research data on appropriate indigenous tree species, too many players involved in regulation of the industry as well as lack of clarity leading to low profitability and low level of investment.

Inadequate research It continues: “The County Government may, through the Inspector General of police, make available to the County enforcement Officers such firearms as may be necessary for the department to carry out its functions under this Act.” In Kenya, there are two regulations that address charcoal production, transportation, trade and

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THE LAST MILE

EVERY MILE OF CHANGING LIVES Residents of Narok talk of improved security and low cost of energy as the government extends low-voltage electricity networks to households within the 600 metre radius from a transformer By Marion Wagaki

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Mzee Pasiyian Ole Sadera shows the lighting system that was installed in his house

THE LAST MILE 23

he family of Ms. Lucy Kosein of Nairegie Enkare area in Narok East sub County cannot hide their joy three months after the Kenya Power and Lighting Company connected their homestead to electricity. Ms. Kosein, a single mother of five says her living standard has greatly improved as she no longer requires a tin lamp to light her house. She is now connected to electricity through the Last Mile Connectivity in January this year.

County. Mzee Sadera hosted the president on 12th August 2016 when their humble home was used for demonstrations of the Last Mile Connectivity project. Narok Kenya Power Designs and Construction Officer, John Karanja said they target to connect over 6, 000 households by the end of the year through the programme.

Beneficiaries “Earlier we slept as early as 8 pm after the tin lamp ran out of paraffin. Now I can stay awake to 11 pm listening to my favourite radio programmes,” she says. Ms. Kosein who lives with her ten-year-old grandson says her son can comfortably do his homework. He has tremendously improved in his class work. “My mindset on electricity has since changed. We no longer hold on to the belief that electricity is a preserve of the rich. This is definitely a testimony that the government is concerned about the most disadvantaged citizens,” she explains. She appreciates the government for fulfilling their promise of rural electrification as a means of improving the lives of Kenyans.

Paraffin

Government set aside Ksh500 Million to aid

The old woman also applauded the government for transforming their livelihood by cutting down hefty paraffin costs they had to meet to have their homestead lit during the night. “My family no longer spends hundreds of shillings on paraffin, as electricity cost is much lower,” she says.

the project last year and over 60 per cent of the work has been completed. Karanja

Another resident Mr. Sirero Siameto who hails from Masantare area in Narok South Sub County says since the connectivity, security has been boosted in his homestead.

explained that Last Mile Connectivity involves extending, low voltage network to reach households within 600 metre radius from a transformer

“Cases of theft have reduced as we use security lights to light livestock sheds and homestead throughout the night. Initially we could wake up in shifts to torch the livestock sheds to ensure all the animals were safe,” he said. President Uhuru Kenyatta launched the Last Mile Connectivity Project in Narok last year where he visited the family of Mzee Pasiyian Ole Sadera in Rotian area in Narok North Sub

He confirmed the government set aside Ksh500 Million to aid the project last year and over 60 per cent of the work has been completed. Karanja explained that Last Mile Connectivity involves extending, low voltage network to reach households within 600 metre radius from a transformer, thereby reducing the cost of accessing electricity for the customer and supply for the power provider. He says the exercise begins with identification of beneficiaries by the Kenya Power officers in charge of implementation. “We sometime identify the beneficiaries without their knowledge because our aim is to connect those who are in dire need of electricity but cannot afford the installation cost,” explains Karanja. Once the beneficiaries are identified, they are expected to provide a copy of their identification cards which is used to create them a KPLC customer account. Karanja says though the identification process is done by the KPLC officers, applications for installation are also welcomed from the public at large. He adds priority is given to transformers that have maximum number of people who have applied to be connected.

Distributed evenly This means that an application of 50 people to get connected to a transformer in a particular location will be effected before an application presented by two people to be connected to another transformer in another location. When the intended beneficiaries are identified and informed, the KPLC officers do a proposal for funding from the financiers. This is because beneficiaries pay no funds for the installation. Karanja sighted various locations such as Suswa in Narok East constituency and Masantare in Narok South Constituency as locations with the most recent beneficiaries of the Last Mile Connectivity project.

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THE LAST MILE

Naishiruni Sadera enjoys lighting her house

The transformers are distributed evenly amongst the six constituencies and the installation process is effected simultaneously in all the constituencies. Last Mile Connectivity is funded by Government of Kenya in collaboration with African Development Bank (AfDB) and implemented by Kenya Power and Lighting Company (KPLC). Phase one was launched on April 3, 2016 and was expected to take 18 months, the existing distribution transformers which by then stood at 5,320 nationally would be maximized to reach an estimated 314,200 households across the 47 counties.

transformers are installed to increase the customer connection leading to additional connection of 500,000 customers nationally thus enabling over 2.5 million Kenyans to have electricity access. Karanja said in the second phase, an addition of 192 transformers will be installed in Narok where they will be distributed evenly in the six sub counties. The programme has seen more productivity and creation of more jobs as thousands of youths in Kenya can now be able to engage in various income generation activities through the opportunity provided by the access to electricity.

Long procedures The 2nd and 3rd phases was to see to it that

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The Last mile Connectivity uses a different

approach from the one used by KPLC to connect people in the past; whereas Kenyans used to make applications with long procedures in the past, now Kenya Power and the Rural Electrification Authority will come knocking on doors asking Kenyans to allow them to connect their households to electricity. Electricity connectivity has been a priority by the Jubilee government as it has featured in their manifesto. The government intends to connect all households with electricity by the year 2020.

CORPORATE NEWS 25

A SH208 BILLION BUDGET FOR RURAL ELECTRICITY

REA officials are upbeat about the five-year plan. They are betting on the exchequer funding, power sale and partnership with county governments to raise billions of shillings to connect rural schools, health facilities, and agricultural processing units. By Nicholas Waitathu

ural Electrification Authority (REA) will in the next five years spend Sh208 billion to connect more Kenyans to the national

grid.

The funds will be expended to connect all the public facilities such as churches, health centres, trading centres, mosques and public primary schools. REA Chairman Simon Gicharu recently in an interview stated that under the 2016/17 -2020/2021 strategic plan, his organisation plans to focus more on renewable energy for the electrification of off-grid areas and households that are far away from the grid. “Our main focus is to develop and promote renewable energy sources, increase electricity connectivity, establish strategic partnerships with stakeholders, strengthen institutional capacity development and

achieve financial sustainability,” said Mr. Gicharu. Other amenities include tea buying centres, coffee, factories and processing plants, police posts, water project and boreholes, secondary schools, institutions of higher learning, and vocational training centres. “Emphasis is on the use of renewable energy for provision of electricity to areas that are far away from the national grid. This is expected to enhance industrialisation and emergence of cottage industries,” said Mr. Gicharu. Some of the cottage industries such as the masonry, flour grinding through posho mills, baking, tailoring, food preservation and processing facilities, among others. “These activities he said lead to provision of employment opportunities, financial empowerment and reduction in rural urban migration,” he added.

Mini grids Since 2006, REA he said has connected to the national grid more public facilities mainly public primary schools increasing electricity uptake from 30 percent in 2006 to 70 percent in 2016.it is estimated that by June 2016 there were about 88,570 public facilities in the country out of which 60,247 were electrified and 28,323 were un-electrified accounting 68 percent and 32 percent respectively. Out of these public facilities, 23,547 primary schools have been electrified by 2017 from 8,203 in 2013. Gicharu stated under the strategic plan, REA targets to electrify the remaining public facilities and households within their vicinity by June 2018 and then focus on households. There are 3,787 un-electrified public facilities in the off grid areas out of which 629 are trading centres which the agency

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CORPORATE NEWS

intends to electrify through establishment of about 450 renewable energy mini-grids. The balance of the trading centres and other public facilities will be connected to the grid through interconnection of the existing diesel mini grids and the national grid. He added households within the vicinity of the mini grids will also be connected. Within the grid networks, the 24,536 unconnected public facilities will be electrified through extension of the grid.

China Exim Bank Gicharu said REA has been under the New Energy Bill 2015 assigned by the government the responsibility of developing renewable energy. Further, REA will be changed to Rural Electrification and Renewable Energy Corporation to implement the rural electrification programme as well as the development and promotion of renewable energy.

One of the REA projects in attempt to connect the rural areas to the National Grid

REA acting chief executive officer Peter Mbugua confirmed that among major renewable projects the organizations is fast tracking include the installation of 55 megawatts of solar power in Garissa County by February 2018. The project already underway Mbugua explained is being funded by a Sh13.8 billion soft loan extended to Kenya government by the China Exim Bank.

“Use of renewable energy in areas that are far away from the national grid is expected to enhance industrialisation and emergence of cottage industries” - Simon Gicharu, REA chairman

“Once the solar power is ready, the surplus power will be sold to the national grid under a power purchasing agreement to be signed with Kenya Power Company,” said Mr. Mbugua.

Public facilities Mr Mbugua pointed out that the projected funds to finance the five year plan will be sourced from the exchequer, sale of generated power resources, partnership with county governments through the matching fund facility. Development partners and various investors through Public Private Partnership Agreements are other sources to be explored. At the end of June, 2016 REA managed to connect 22,648 public primary schools, 9,286 markets and trading centres and beaches 8324 churches and mosques.

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“This programme has not only tremendously increased the number of public facilities electrified in the country but has also improved the quality of learning in our public primary schools and resulted in taking electricity closer to Kenyans,” he added. Other public facilities electrified included public primary schools, polytechnics, administrative offices, churches, mosques, coffee factories and processing plants, police posts, tea buying centres and water projects. Currently 88,639 public facilities have been identified across the country, out of which 60,157 representing 68 percent are electrified and 28,482 accounting 32 percent are not electrified. REA’s aim is to complete the electrification of the remaining public facilities in both grid and off-grid areas in the next three years. Households The implementation of the public primary schools power programme faced a lot of challenges including lack of comprehensive data, occasional shortage of materials, harsh terrain in some areas, and vandalism of power line materials and creation of many new schools. “However, despite the encountered challenges the project is almost complete and only installation of transformers is remaining in a few schools,” he added. Mbugua explained changing the REA name to Renewable Energy Corporation (REREC) will enhance rural electrification programme in collaboration with county governments. This he explained will be focused to develop renewable energy sources and to electrify the remaining public facilities and to ensure universal access to electricity by 2020. Going forward Mbugua says REA plan is to connect electricity to all the remaining public facilities and households within their vicinity by June 2018. Thereafter the Authority will undertake the electrification of the remaining households to facilitate the achievement of the Government target of universal access by 2020.

INNOVATION 27

SOLAR POWER IS THE RENEWED DRIVE IN FAVOUR OF CLEAN ENERGIES As regulations are being put in place to back shift to clean energy, firms such as d.light’s is looking to transform the way people use and pay for energy around the world. By MARION WAGAKI

enyans currently using kerosene as a home energy source for lighting are likely to save between 10 and 25 per cent monthly, thanks to launch of solar products in the market. The new products to cost as less as Sh500 are geared towards eliminating kerosene fumes and fires, and increased productivity due to the superior quality of light. The products launched in Nairobi recently by d.lights will lead to high quality health and safety of the consumers who are grappling with numerous health complications such as cancer, high blood pressure and respiratory diseases, due to use of kerosene. “A consumer can expect monthly cost savings of up to 25 per cent, increased health and safety from the elimination of kerosene fumes and fires, and increased productivity due to the superior quality of light”, said Sam Goldman, d.light’s chief product officer, during launch of a global solar kit maker X850 home system. The solar kit lanterns will enable users to not only light their homes and charge their phones, but also watch digital TV channels. This is with the basic solar kit being upgraded without buying any new system and allowing customers to save more than Ksh500 in energy-related expenses. “Our customers will now dare to dream as

D.lights solar powered portable lantern

the new product has the capacity to power more than just the basic home appliances like bulbs and mobile phones”, added Goldman.

economic challenges in the country. Majority of households mainly in the rural areas rely on kerosene lanterns and candles to meet their lighting needs. But these sources of light Goldman observed are dangerous, low quality and expensive. Data indicates that families can spend as much as 10 to 15 percent of monthly income on kerosene.

Carbon dioxide emissions Multi-function But even as regulations are being put in place, companies such as d.light’s solar solutions are now looking to transform the way people use and pay for energy around the world.

Kenya has abundant solar energy resources with its daily average solar insolation estimated to be about 4-6 kilowatt hours per square meter, which is considered one of the best for solar electric energy production in sub-Saharan Africa.

The new products range from singlefunction lanterns for reading and ambient light, to more advanced multi-function solar light solutions and full home systems. “At only Ksh500 ($5), d.light’s will be one of the world’s most affordable high-quality solar light” he stated.

The total installed solar power capacity is estimated at 25MWp as of 2016 in which the vast majority is contributed by solar home systems installed at individual homes. According to Energy

Electricity has been termed as an essential commodity to eradicating poverty among other

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INNOVATION

Regularity Commission (ERC) the total installed capacity is projected to grow at 15 percent annually. Kenya also last month enforced regulations requiring property developers to install and use solar water heating systems. The regulations are part of efforts to implement a green economy strategy towards sustainable development. Under the strategy the country hopes to reduce carbon dioxide emissions by as much as 15 per cent by 2030.

Solar lights ERC acting director Robert Oimeke stressed on the need for the regulations, saying they should set the pace for other East African countries in terms of increasing use of clean energies. The regulation he said will be fully enforced and urged the industry players to comply. D. light CEO and Co-founder Ned Tozun said there are currently 2.3 billion people in the developing world living without reliable electricity. “Our partnership with key stakeholders such as the Global Off-Grid Lighting Association and the World Bank-IFC

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Lighting Global initiative have poised to bring millions of existing and new customers up the energy access ladder through our new products and solutions,” he said. Tozun said that d.light’s goal is to impact the lives of 100 million people with their solar lights and home solutions by 2020 adding that as of 2017, d.light has impacted over 75 million people worldwide in over 60 countries. A standard X850 bundle comes with 5 lights, radio, torch, battery and a panel. It is upgradable to 8 lights and TV, and in the “A consumer can expect savings of up to 25 per cent, improved health after elimination of kerosene fumes. Our partnership with key stakeholders will bring millions of customers up the energy access ladder” Sam Goldman, d.light chief product officer

future other 12V appliances that can be powered by its 12V ports.

Value added tax The Chairman said d.light is also planning a major upgrade across its entire solar lantern products in the next few weeks, in line with its mission of moving its customers up the energy access ladder. Africans who leave too far from the power grid or cannot afford a power connection now have a cheaper option to access a fully powered home entertainment system. East Africa is geographically placed to harness solar power owing to the fact that the region receives some of the highest levels of parallel radioactivity in the world but exploitation of solar energy remains extremely low. The coming into force of the regulations coupled by the zero-rating of import duty and removal of value added tax on renewable energy equipment and accessories might thus be able to ignite an increase in solar energy uptake.

POLICY 29

RENEWABLE ENERGY IS OUR FUTURE – PS NJOROGE The PS says clean energy is at the centre of government’s ‘affordable energy to all’, and so several multilateral and bilateral partners are on board By MARION WAGAKI Energy and Petroleum PS Eng. Joseph Njoroge

(EDULINK) funded a new programme -Enlarged Network in Education and Research for Growing Impact of Sustainable Energy engineering on local development (ENERGISE) Project.

Networking The project was in line with EDULINK’s global objective of fostering capacity building and regional integration in the field of higher education through institutional networking. The project was conceived after carrying out a comprehensive assessment of the current status of energy engineering and to identify gaps in Kenya, Ethiopia and Tanzania.

enya has emerged as an attractive investment destination for renewable energy, says energy Principal Secretary, Engineer Joseph Njoroge. Njoroge says the government is committed to achieving sustainable energy access for all citizens. “Our commitment is on course and we are promoting investments in renewable energy to serve off-grid households and industries as part of the vision 2030 agenda. To achieve this, we have partnered with several multilateral and bilateral allies who have pledged financing and technology transfer to help the country double access to clean energy,” said Mr. Njoroge. For example, he emphasized on the need for tertiary institutions to focus on developing technical skills on energy. He adds the

role of capacity building in achieving the universal access to modern energy requires more attention. “There is need to strategically develop sustainable energy experts with updated competences to speed up sustainable energy development in Africa” – Joseph Njoroge, Energy PS.

The project underscores five syllabuses in three countries and a new labor-driven Master of Science (MSc) degree program in Sustainable Energy Engineering, which covers engineering and economic perspectives of sustainable energy. The curriculum emphasizes development of local and innovative technologies for the uptake of renewable energies in sustainable manner. Africa represents 16 percent of the world’s population but it only accounts for about three percent of the global energy use.

Reliable electricity “Beyond that, there is need to strategically develop sustainable energy experts with updated competences to speed up sustainable energy development in Africa. This is our future and this is a reality for the entire Sub Saharan Africa,” the PS said. In 2014, the Africa, Caribbean and Pacific (ACP), European Union (EU) Cooperation Programme in Higher Education

According to the International Energy Agency (IEA) in its publication -World Energy Outlook 80 percent of the 1.1 billion people without access to electricity and modern energy services live in the rural areas of sub-Saharan Africa and developing countries in Asia. According to the publication, Sub-Saharan Africa is now the most electricity poor

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POLICY 30

region in the world in terms of the total number of people accessing power surpassing Asia as well as the share of its overall population. The report reveals that about 630 million people in the region are living without reliable access to electricity, and 790 million people rely on solid biomass to cook their food and heat their homes. The UNESCO Chair on Energy for Development partnered with Technical University of Kenya (Kenya), Technical University of Mombasa (Kenya), Jimma University (Ethiopia), and Dar Es Salaam Institute of Technology (Tanzania) to implement the project. The choice of these countries was made based on their low rate of energy access, for instance, Ethiopia (15 percent), Kenya (15 percent) and Tanzania (11 per cent).

Professionals The project has succeeded in delivering intensive training sessions on capacity building on new teaching methodology and on distributed energy systems (DESs) which are based on renewable energies. The impact of DESs in improving sustainable energy conditions especially in WATTS UP AUG - SEPT 2017

offg r i d rural communities around the globe has been impressive. The increasing impacts of DESs likely explain the reason organisation both local and external emphasised the need to increase the number and level of specialised energy engineers to develop such energy systems. The energy engineers are such that will build expertise in design, implementation, monitoring and maintenance of appropriate and sustainable energy solutions that can be adapted for rural energy applications. Africa-EU Renewable Energy Cooperation Programme (RECP) three years ago intensified renewable energy activities in Africa by initiating training to a new generation of energy professionals and also strengthening African research institutions.

Capital intensive Similarly, the Africa-EU Energy Partnershipâ&#x20AC;&#x2122;s (AEEP) hosted by the Politecnico di Milano

in 2016 also highlighted the need for further focus on capacity development in Africa. And technology transfer to ensure benefits from the job opportunities and skills development that accompany the growing renewable and more efficient energy sector. The ENERGIZER project has therefore the purpose of boosting the contribution of network in Ethiopia, Kenya and Tanzania working on Energy Engineering curricula to promote access to energy, efficiency and related socio-economic development. Towards universal access, IEA estimates that Africa needs investments of more than $60 billion each year to achieve universal access to electricity by 2040. Energy Regulatory Commission of Kenya Acting Director General Pavel Oimeke says that renewable energy deployment is capital intensive and this slows down its adoption despite existence if regulations encouraging its uptake.

CRIME 31

GETTING RID OF ILLEGAL LPG From consumer information, crackdown on counterfeits, and now a proposal to set up a special police unit to deal with unscrupulous traders, the ERC says it is leaving nothing to chance. By MARION WAGAKI

onsumption of Liquefied Petroleum Gas (LPG) in the near future is set to increase as government and value chain players intensify use of clean energy. Energy regulatory commission (ERC) acting Director-General Pavel Oimeke says use of clean energy will increase and thus help in protecting the environment as people stop using firewood and charcoal. “Kenya’s LPG consumption per capita stands at 3 kg/y, compared to 30 kg/y in South Africa and 25 kg/y in Nigeria. Kenya hopes to increase per capita consumption to 15 kg/t, which will be in line with consumption in other middle-income countries,” said Mr. Oimeke.

Every month, Mr Oimeke says, consumers spend 13,000 metric tonnes of LPG and 151,700 metric tonnes annually. He observed that majority of consumers still use firewood and charcoal which is being blamed to emergence of health complications such as respiratory diseases. As part of promoting LPG market segment, Oimeke stated that the commission has been implementing reforms based on controlling prices and production of gas. For example, after the Government implemented unification of the domestic LPG valves initiative, consumers are now able to switch between brands at the points of retail.

“This has enhanced competition amongst the various brand owners by removing the oligopoly that existed prior to the implementation of the unified valve process. In addition, consumers can now access LPG more easily since the unification of the valves removed the need for consumers to travel long distances in search of a particular brand,” added Oimeke. This he said has assisted in taming selling of substandard gas cylinders in the market. Of late he said the subsector has in the past been infiltrated by unscrupulous business operators who mostly thrived on counterfeiting genuine brands in the market.

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CRIME

Oimeke said many operators have been lacking proper information on the process of establishing LPG storage, filling and cylinder distribution businesses. In many cases, consumers have been cheated by dealers as they buy under or over weight gas cylinders. And in other cases, the dealers sell leaking cylinders which have contributed to consumers losing their lives as they are burnt and their properties destroyed as the cylinders blow up.

Informal settlements Industry players blamed the spread of illegal operators to lack of sound regulation by the ERC and other government agencies. Equally, the emergence of the dishonest dealers further follows lack of information by consumers and depressing purchasing power. The development of the illegal traders is high in estates and informal settlement areas. However, Oimeke stated from the year 2015, the challenge of illegal LPG operations has slowly been contained after ERC adopted a negotiated compliance approach. “ Following discussions with operators of illegal sites, ERC decided to understand the root causes of illegal LPG operations by holding discussions and has now been able to license an additional LPG brand owners from an initial number of about 25 in 2014”, he said He explained that the war on illegal LPG operations has also been boosted by an aggressive enforcement process that ERC

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has put in place.

trend he added stabilized to Ksh390/tonne in May and June.

Special police In the financial year 2016/17 he said the commission undertook demolition of six LPG storage and filling plants that were being operated without licenses. In April this year, petroleum Principal Secretary Andrew Kamau championed for a special police unit to help combat rogue LPG dealers.

“We decided to understand the root causes of illegal LPG operations and have now been able to license an additional LPG brand owners from an initial number of about 25 in 2014”- Pavel Oimeke, ERC Acting Director General

Oimeke says that the planned involvement of a special unit of the Kenya Police in the ongoing crackdown on illegal cooking gas dealers will not slow down growth in its uptake. Instead, he added, it will rather ensure a fair playing field by all licensed companies which will boost investor confidence in the Kenyan market resulting in greater investments in the LPG sector boosting penetration. LPG prices he said increased by 42.8 percent between December 2016 and March 2017 from Ksh420 per tonne to Ksh600/tonne respectively. The price

Risk fines Cheaper LPG from Zambia has reportedly been finding its way into the country through Tanzania, with most of it ending in illegal refueling plants. The port of Mombasa is the main entry point. There have however been fears that the banning of LPG imports through the Kenya-Tanzania border may cause a shortage leading to an upsurge in cooking gas prices. The Ministry of Energy in April banned imports of cooking gas through the KenyaTanzania border, raising the possibility of a shortage and surge in the price of the commodity. According to the Kenya National Bureau of Statistics data consumption of LPG for the year 2016 rose to 180,830 metric tonnes, almost three times more than 62,650 metric tonnes recorded in 2015. “Some of the actions require policy directives while others are regulatory based. Once Policy is given by the Ministry of Energy and Petroleum, ERC has a duty to ensure that the Policy is immediately adhered to by all the licensees,” Oimeke said. Oil marketing companies have also been warned for failing to comply with the law and risk fines of between KSh30, 000 and KSh40, 000.

WOMEN IN ENERGY 33

Raising a Woman in Technology 1. Tell us, who is Wangari? I am a data centre engineer. I studied mechatronic engineering at the university level. My job entails design and implementation of cooling and fire suppression systems in our equipment rooms. I am a certified energy manager in training which makes me conscious of how efficiently energy is utilised in our day to day activities.

2. Why did you think of studying engineering? I excelled in sciences having been brought up by a mother who is a physics teacher by profession. So all through high school I knew I would end up in a technical field.

3. Why did you take mechatronics course? Mechatronics offered the best of almost all engineering principles. I was also fascinated by automated systems and wanted to understand how machines have a “brain”.

4. What were your fears when you took the course? Stereotypes. I was afraid I would be denied a chance to practise based on my gender.

5. What was your experience with the job market? I embarked on job hunting like everyone else. I got an opportunity with women in technology internship which paved way for my current job.

6. Currently only six per cent of women pursue engineering. What can be done to improve this?

“We need to show young girls that being an engineer doesn’t mean losing our femininity,” Wangari Malinda, data centre engineer

We need to start from the basics by engaging our girls in activities that create an interest in technical fields. We also need to show our girls that being an engineer doesn’t mean we lose our femininity.

7. How can you help increase the numbers? I can create impact by being involved in the various mentorship programs and by being a good example to those who have embarked on the journey of being engineers.

8. What hinders women from progressing in their careers as engineers? All women who complete their engineering degrees get absorbed into the industries; some lose interest midway and take up other career paths. We need to tap into this potential by getting out of our comfort zone and push ourselves to the limits.

Ms. Wangari Mahinda AUG - SEPT 2017 WATTS UP

CORPORATE NEWS

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Photo courtesy KPLC website

CORPORATE NEWS 35

ON COURSE TO SERVE 9 MILLION NEW CUSTOMERS Company executives say the trick lies in upgrading distribution infrastructure, cutting system losses and tapping an efficient energy mix by 2021. By NICHOLAS WAITATHU

ncreasing investment on infrastructure development and tapping on new energy sources are the key strategies Kenya Power will fast track in the next five years to expand customer base and remain competitive in the market. By 2021, the company plans to have expanded the power distribution network by over 9 million consumers. These are parts of key priorities contained in the five Year Corporate Strategic Plan (2016/17 – 2020/21). In the next five years the company will advance infrastructure development, network management, customer centricity, loss reduction, and resource alignment. The priorities are being fast tracked to strategically position the company at the centre of social economic development of the country as it continues to work towards providing reliable and competitively-priced power to all. Dr Ken Tarus Acting Managing Director and Chief Executive Officer says as part of ensuring competitiveness in the business, the company targets to tame the increasing system losses and thus reduce cost of doing business and stimulate high growth. Further the power utility company will enhance the power distribution infrastructure and commit resources to improve energy-generation mix that is efficient, reliable, and competitively priced.

“As at end of June 2017, the company had registered a rapidly expanding customer base with a total of 6.1 million customers across the country and by 2021 the same is expected to have grown by a minimum of 6 million consumers in tandem with population growth. This translates to 1.2 million additionally customers annually both through grid extension and off-grid solutions,” says Dr. Tarus.

Customer satisfaction During the same period the company management targets to reduce system losses from the current level of 19.4 percent to below 10 per cent. To support expected demand arising from the growth in customer connections, the company is working to enhance the infrastructure at all levels and capacity increased in line with the planned additional 5,000+ Megawatts by the national government. The company he said is focusing on raising customer satisfaction by improving the reliability and quality of electricity supply across the country. To do this, the company, within the planning period, will address issues relating to adequate generation capacity, customer connectivity, sales, customer service and demand creation all aimed at reducing operational costs and increasing revenue.

management and speedy identification and resolution of faults within the network.

Turnkey projects During the next five operation years, he said, the company in the plan targets to improve energy generation mixes mainly renewable energy and areas far from the national grid. Dr Tarus says the company’s top management in the next five years will focus on improvement electricity supply quality that exceeds customer expectations, reduce cost of doing business and increase sales revenue which in overall will improve the delivery of customer services. Tarus observes, “To expand the grid network infrastructure to reach and serve over 80 percent of the population entails construction of new bulk supply points, distribution substations, MV power lines, efficient and timely procurement for turnkey projects and effective project implementation management.” Further the company will in the next five years install 2.8 million smart meters as part of consolidating customer consumption data and facilitate two way communications and improve load management also info the new focus by the company.

Power outages Dr. Tarus pointed out that the existing power network will be modernized and automated to ensure efficient system

Customers residing in off grid and far away areas will be brought on board with the company deploying off-grid

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CORPORATE NEWS

Ken Tarus Ag. MD and CEO of Kenya power and lighting company launching the laptop project

To expand the grid network infrastructure to reach and serve over 80 percent of the population entails construction of new bulk supply points, distribution substations, MV power lines, efficient and timely procurement for turnkey projects and effective project implementation management.”

mini grids through use of hybrid sources of energy such as solar-diesel and wind plants. “By investing in these, it is estimated that about 10 percent of the population will be provided with power,” he added. The company, he said, will equally pursue receptive strategies in order to overcome prevailing challenges, for example, access to individual land and companies when connecting customers. To overcome the challenge, the company will lobby government to enact the legislations to compel counties to provide wayleaves and underground tunnels for utilities. Said he, “The company will equally initiate undergrounding in emerging business centres, such as Upper Hill, ahead of new buildings so as to avoid difficulties and higher costs when this is done late.“ He added, “Thus, the company recognises

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that its future in a progressively competitive market will depend increasingly on improving its customer satisfaction ratings by addressing operational issues that are the basis of customer electricity experience.” Failure to modernise and optimise the network, Dr. Tarus warned, will contribute a steep rise in outages which besides lowering customer satisfaction also would entail loss of revenue to the company. With all the factors of being pursued remain constant in addition adequate tariff level Tarus stated that the company will enhance its profitability trend to Ksh13billion in 2019/20 financial year from the current Ksh12 billion. “Our future in a progressively competitive market depends increasingly on improving customer satisfaction” - Dr Ken Tarus acting Managing Director and Chief Executive Officer, Kenya Power.

ENERGY BILL 37

BUYING POWER FROM SOURCE The Energy Bill envisages an arrangement where producers like KenGen will be allowed sell power directly to big consumers all the over the country, cutting on transmission cost. By NICHOLAS WAITATHU

he country industrialisation is headed for better times as the government plans to allow more manufacturing firms to source electricity directly from the producers. This promises investors, both local and international, setting up businesses in Kenya to access power at lower rates and thus can be able to spread their business even in the interior parts of the country. This will be made possible once The Energy Bill 2015 currently in parliament is enacted into law and assented by the president. Its fate was however not very clear as the Parliament took a break in June to pave the way for August 8 elections.

“As manufacturers we welcome the government’s idea as it will enable us increase our business footprints in the local market. This provides us with various options of sourcing power to increase production. The energy cost in production ranges between 40 per cent and 60 per cent depending on the industry. For instance, cement and metal industries are high energy consumers,” Phyllis Wakiaga, Kenya Association of Manufacturers Chief Executive Officer on phone. Energy Regulatory Commission (ERC) Acting Director General (ERC), Robert Pavel Oimeke in an interview recently confirmed that the bill was parliament and almost in the final stages.

Wheeling Framework

Our idea once authorised by law is to sell power to big consumers all the over the country. However, the new arrangement will not interfere with the current system where we sell all our power to Kenya Power under the PPA framework

“It is our hope that the Bill will be concluded

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ENERGY NEWS

and presented to the president to assent it before the end of current parliament,” said Mr. Oimeke. The Bill he said provides for powers producers, for example, Kenya Electricity Generating Company (KenGen), Geothermal Development Company (GDC) and Independent Power Producers (IPPs) to sell electricity directly to large consumers. Under the proposed new power selling model, Oimeke explained that the power producers can connect with consumers directly depending on the distance between the consumers and producer or use infrastructure of a distributing agent, for instance, Kenya Power. “The producers will be enabled to sell power under the wheeling framework. The structure allows owners of transmission infrastructure to be paid wheeling charges by the producer distributing power to consumers,” he stated.

Distribution Cost He added, under wheeling framework, power producers will enter into agreement with Kenya Power and Kenya Electricity Transmission Company Limited (Ketraco) to use their power distribution infrastructure in order to reach out their

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consumers. The direct power will only be charged at generation cost which is cheaper compared to distribution cost currently charged by Kenya Power to electricity users.

will not interfere with the current system where we sell all our power to Kenya Power under the PPA framework,” said Mr. Mugo. KenGen produces 69 per cent of the total power used in the country while IPPs produces 31 percent.

The large consumers and especially manufacturing plans have been seeking alternatives such as installing solar power in order to tame high cost of power from the national grid and frequent power blackouts.

Mugo said the firm would only target new large consumers of electricity and keep off from clients already signed up by the power utility company. KenGen is particularly keen on firms that will be operating at its planned industrial park in Olkaria, Naivasha.

KenGen management when realizing half year financial results sometimes back announced its intention to start selling power directly to big consumers once the law comes into force. The company managing director Albert Mugo assured that the move is prompted by high demand of power by big users. Currently the company that produces more than three quarters of the country’s total power sells electricity to Kenya Power Company under the Power Purchase Agreements (PPAs).

Risks “Our idea once authorised by law is to sell power to big consumers all the over the country. However, the new arrangement

Currently the company is undertaking nine projects targeting to add 743 megawatts of geothermal and wind to the national grid. The move aims to cushion KenGen from risks associated with the current single buyer model where Kenya Power buys all the power generated in the country for resale to retail consumers. Analysts say the new provision is meant to create competition in a market that has been dominated for a long time by a single buyer of power. “Equally we expect the new move will compel Kenya power to start selling quality electricity to consumers and thus supports investments being placed in the country,” Wakiaga added.

Energy Solutions for Better Lives

REA Achievements; 1

1. A trading centre in Dadaab, Garissa 2. A transformer by REA 3.Waso Primary School in Isiolo County enjoying digital learning after electrification by REA 4. Kekalet Trading Centre, Busia County 5. Biyamadhow Solar/Hybrid station in Wajir County

THE ENTREPRENEUR

From Page 15

less. It is also a clean source of energy with no carbon dioxide and it helps reduce cutting down of trees for firewood or charcoal,” she says. Some of the challenges include getting raw materials and accessing funds to expand her business. “My biggest challenge has been accessing a loan from the bank because this business is not well known and nobody is willing to risk giving a loan to such an initiative,” she says. This lack of finances has meant Wambui is not able to buy advanced machines for briquette making. “There is market for the mass consumers but at the household level, the use of briquette is slow. People still don’t know the benefits of briquettes,” Wambui says.

User friendly

Charcoal briquetting is a new technology that utilises waste bio-mass

In Nakuru, Richard Gakuo has been making a kill from the sale of charcoal briquettes, a venture that is of economic benefit and instrumental in solving the problem of garbage that has been an eyesore in various parts of the country. “Electricity is still a pipe dream in many parts of the country. There is need for an alternative source of energy that is affordable and friendly to the environment. The final charcoal briquette product is packed in user-friendly bags that go for Sh300, while a bag of charcoal costs at least Sh700,” Gakuo said. Rather than fell older and larger trees to make charcoal, briquettes can be made from twigs of fast growing regenerative shrubs, molasses, rice or coffee husks, cow dung or combustible papers. “The benefits of the charcoal briquettes are many since they are smokeless, burn for longer periods of between 5-6 hours unlike conventional charcoal which burns for one to one and half hours. It is odourless, affordable, it does not produce carbon monoxide and the process cleans the environment through solid waste recycling,” he says.

materials and there is need to build capacity

Bondeni, Nakuru

and give small-scale

Lydia Muchiri from Practical Action says charcoal briquetting is a new technology that utilises waste bio-mass materials and there is need to build capacity and give small-scale entrepreneurs skills so that they can promote this new technology.

entrepreneurs skills so that they can promote this new technology

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Through his Kaa La Moto charcoal briquette enterprise in Bondeni estate in Nakuru County, Gakuo has made an impact in the community and others are following in his footsteps. “After doing research, I was convinced that charcoal briquette making is the best project since the raw materials which include water, charcoal dust and molasses which acts as a binder are readily available,” said Gakuo who has since enrolled at Egerton University for a training course on solid waste management. He adds that the training was an eye-opener for him as he could now look at it in terms of wealth. “Charcoal briquettes are processed using the most appropriate technology and skills to ensure that they are eco-friendly. I have been able to earn an income from this,” Gakuo said.

Bioenergy According to a brief by the Stockholm Environment Institute and UNDP biomass is the main source of energy for households in Kenya, and a major energy source for the country as a whole. In 2013, 72 per cent of the country’s total primary energy supply came from bioenergy and waste and a large share of the biomass used is in the form of charcoal, which provides 82 percent of household energy in urban areas, and 34 percent in rural areas, according to the Kenya Forest Service (KFS). The charcoal sector employs nearly 900,000 people in production and trade, and has been estimated to contribute US$1.6 billion per year to Kenya’s economy. In Kenya, demand for wood is estimated at 41.7 million m3 per year, including 18.7 million m3 for fuel wood and 16.3 million m3 for charcoal, but the amount that can be harvested sustainably is estimated at just 31.4 million m3. This means that every year, Kenya is losing 10.3 million m3 of wood from its forests, a serious environmental concern.

FINANCE 41

IT’S ANOTHER YEAR OF STRONG PERFORMANCE!

lobal Credit Ratings (GCR) has affirmed Stima Sacco Society Limited’s stable long-term and short-term ratings of BB+ (KE) and B (KE) respectively. The national-scale ratings are valid until May 2018. The ratings reflect the Sacco’s diversified membership, as well as its established heritage, supported by operations that began in 1974. The Society’s position as the second largest deposit taking savings and credit cooperative society (Sacco) in Kenya, with a market share of six per cent relative to total assets of the 164 registered deposit taking Saccos, is of further consideration. In a bid to enhance its risk management structure in line with best practices, the society established a risk management and compliance department in November 2016 as part of its Risk Management Transformation Program.

Capital requirement The society’s core capital, institutional capital, and total capital and reserves increased by 18.6 per cent, 23.5 per cent and 15.6 per cent at FY16 to Sh2.9bn, Sh2.1bn, and Sh3.1bn respectively. Consequently, Stima was in compliance with all the capital requirements of the Sacco Act.

However, the society reported a lower core capital to total assets ratio of 11.9 per cent in the year under review compared to 12.1 per cent in 2015, against a regulatory minimum of 10 per cent, mainly as a result of strong (20.8 per cent) growth in total assets. From a gearing perspective, external borrowings at 2.6 per cent of total assets were within the statutory cap of 25 per cent.

equity increased to 2.2 per cent and 17.1 per cent respectively. Member deposits, the society’s main source (89.9 per cent) of funding, grew by 19.7 per cent in the 2016 financial year to KES19bn supported by a 57.8 per cent increase in members. Moreover, Stima has consistently maintained its liquidity ratio above the prudential requirement of 15 per cent, registering 23 per cent at FY16.

Meanwhile, Stima Sacco maintained an acceptable asset quality profile, reporting a lower gross non-performing loan ratio of 1.7 per cent in 2016 down from two per cent the previous year, below the prudential benchmark of five per cent despite a challenging financial environment.

Oversight The society’s ratings could be positively impacted by significant improvements in capitalization, a positive earnings trend, improved risk management oversight, sound credit protection factors, the success of the society’s ambitious growth strategy, business reorganization and capital/fund raising initiatives.

Member deposits Net profit before tax grew by 89.5 per cent to a five year high of Ksh547.4 million in 2016, supported by an increase in net interest income (due to high loan growth), despite increases in impairment charges and operating expenditure. The net interest margin increased to 7.2 per cent in 2016 (5.1 per cent in 2015) and the cost ratio decreased to 64.6 per cent last year compared to 73.1 per cent in 2015 .The society’s return on assets and return on

Stima’s ratings could however, be negatively impacted by downward pressure on earnings and capital adequacy, increasing liquidity risk and asset quality problems, as well as a breach of any prudential benchmarks (such as capital, asset quality and liquidity).

Photo courtesy of Stima Sacco facebook

AUG - SEPT 2017 WATTS UP

CORPORATE NEWS

INFRASTRUCTURE FOR ENTERPRISE

BRITAM says increased investment in basic infrastructure promises a catalytic influence on growth of energy projects, starting with renewable sources. By MARION WAGAKI

abroad and from bilateral partners to fund its projects with China recently becoming a financier of key energy and transport projects,” said Mr Kaniu.

f you are one of the people who believe the government should go slow on infrastructure investment until the size of economy catches up, you are not one side with Britam Asset Managers (BAM).

PPP arrangement

The financial services firm, in a recent report, says increasing investment in infrastructure is what the country needs, not only to stimulate high production but also to reduce bottleneck that local businesses are grappling with.

For the last about 15 years government has enhanced resource allocation for infrastructure development especially roads, energy and airports. Major highways are under construction in the country which will open up more areas for settlement and businesses.

BAM CEO Kenneth Kaniu says despite having some of the fastest growing economies in the World, East African economies remain among the least competitive globally due to poor state of physical infrastructure. “Kenya has had to rely on foreign aid and commercial borrowing domestically,

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Public Partnerships (PPP) arrangement, Foreign Direct Investment (FDI) flows and more local private financing.

Renewable sources

For example, improvement of infrastructure in suburbs of Nairobi City, has contributed to high human settlement as well as emergence new businesses centres. Kaniu said that it is imperative for Kenya to diversify financing sources and give a larger role to the private sector under the Private-

He disclosed that currently there is an East African Master Plan to connect six cities -Mombasa, Nairobi, Kigali, Kampala and Juba by 2018 at a cost in excess of Ksh30 trillion (US$ 30 billion). “ In addition three oil pipelines will be constructed between Kenya , South Sudan, Ethiopia Uganda and Tanzania at an estimated cost of Ksh832 billion(US$ 8 billion)” said Kaniu. Railway transport is the second most important mode of transport after road and is critical for long distance freight along the main transport corridors. Kenya’s recently launched standard gauge railway, an infrastructure expected to

CORPORATE NEWS 43

Three oil pipelines will be constructed between Kenya, South Sudan, Ethiopia Uganda and Tanzania at an estimated cost of Ksh832 billion” – Kenneth Kaniu, BRITAM Chief Executive Officer

increase electricity generation from cheap renewable sources of energy in order to support light manufacturing.

unveiled in the near future and the 31 storey iconic Britam Tower at Upper hill built at a cost of KSh4 billion is 97 per cent complete.

To plug this infrastructure gap in the region, it is estimated that East Africa needs over Ksh10.4 trillion in funding (US$100 billion) over the next four years.

ESOP plan Wairegi confirmed that the Britam employees can also now own shares in the company after shareholders approved a proposal for the creation of an employee stock ownership plan (ESOP). The ESOP plan, now awaiting approval by the Capital Markets Authority, is a staff incentive and retention plan that provides the company workforce with an ownership interest in the company. Britam now joins other publicly quoted companies in Kenya that have introduced ESOP for employees in the work place. Wairegi said the company had changed its name from Britam Holdings Limited to Britam Holdings Plc in compliance with the law that requires listed companies to add Plc to distinguish them from private companies.

Broken ground Currently, the East African Community has 58 active Private-Public Partnerships projects worth Ksh753.9 billion (US$7.32 billion). During the Britam Holdings PLC Annual General Meeting, the Group Managing Director Benson Wairegi explained that the company was fast tracking property development as a diversification strategy. The company has broken ground for the construction of 163 high-end serviced apartments in Kilimani at a cost of Ksh3.3 billion.

Benson Wairegi, Britam Group Managing Director

“There are other property projects set to be

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INTERNATIONAL NEWS

GLOBAL CLEAN ENERGY JOBS HIT 9.8 MILLION Sources ranging from wind installations to biofuels are employing more people around the world with 62 per cent of the opportunities arising in Asia By NICHOLAS WAITATHU

ore than 9.8 million people were employed in the renewable energy segment last year, says a report by International Renewable Energy Agency (IRENA). Global energy system the report notes is creating more jobs in renewables than in fossil-fuel technologies.

and employment in renewable energy worldwide since IRENA’s first annual assessment in 2012, when just over seven million people were working in the sector. In the last four years, for instance, the number of jobs in the solar and wind

The Renewable Energy and Jobs –Annual Review 2017 report released at IRENA’s 13th Council meeting Abu Dhabi, cites falling cost and enabling policies as key factors that led to creation of more job opportunities in the renewable labour market. The report shows that global renewableenergy employment, excluding large hydropower, reached 8.3 million in 2016. But when accounting for direct employment in large hydropower, the total number of renewable-energy jobs globally climbs to 9.8 million. IRENA Director-General Adnan Amin explained that China, Brazil, the United States, India, Japan and Germany accounted for most of the renewableenergy jobs. In China for example, 3.64 million people worked in renewables in 2016, a rise of 3.4 per cent.

Tip scales “Falling costs and enabling policies have steadily driven up investment

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sectors combined has more than doubled,” said Mr. Amin. “Renewables are directly supporting broader socio-economic objectives, with employment creation increasingly recognised as a central component of the global energy transition. As the scales continue to tip in favour of renewables, we expect that the number of people working in the renewables sector could reach 24 million by 2030, more than offsetting

fossil-fuel job losses and becoming a major economic driver around the world,” Mr. Amin added.

Wind installations IRENA’s report shows that solar photovoltaic (PV) was the largest employer in 2016, with 3.1 million jobs — up 12 per cent from 2015 — mainly in China, the United States and India. In the United States, jobs in the solar industry increased 17 times faster than the overall economy, growing 24.5 per cent from the previous

INTERNATIONAL NEWS

Globally, 62% of the jobs are located in Asia, for instance, installation and manufacturing jobs continue to shift to the region, particularly Malaysia and Thailand, which has become global centre for solar PV fabrication

year to over 260,000. New wind installations contributed to a seven per cent increase in global wind employment, raising it up to 1.2 million jobs. Brazil, China, the United States and India also proved to be key bioenergy job markets, with biofuels accounting for 1.7 million jobs, biomass 0.7 million, and biogas 0.3 million. “IRENA has provided this year a more complete picture on the state of employment in the renewables sector, by including large hydropower data. It is important to recognise these additional 1.5 million working people, as they

represent the largest renewable energy technology by installed capacity,” said Dr. Rabia Ferroukhi, Head of IRENA’s Policy Unit and Deputy Director of Knowledge, Policy and Finance.

Installation and manufacturing Globally, 62 per cent of the jobs are located in Asia, for instance, installation and manufacturing jobs continue to shift to the region, particularly Malaysia and Thailand, which has become global centre for solar PV fabrication. In Africa, utility-scale renewable energy developments have made great strides, with South Africa and North Africa

accounting for three-quarters of the continent’s 62,000 renewable jobs. “In some African countries, with the right resources and infrastructure, we are seeing jobs emerge in manufacturing and installation for utility-scale projects. For much of the continent however, distributed renewables, like off-grid solar, are bringing energy access and economic development. These off-grid mini-grid solutions are giving communities the chance to leap-frog traditional electricity infrastructure development and create new jobs in the process,” Dr. Ferroukhi said.

AUG - SEPT 2017 WATTS UP

CORPORATE NEWS

DRILLING NEW WELLS OF STEAM

After causing consumer bills to drop by up to 35 per cent with the 320MW sold recently to KenGen, the GDC has embarked on de-risking fields to encourage private sector to take part in digging out the rest of Kenya’s 10,000+ MW assets By NICHOLAS WAITATHU

ore jobs are likely to be created in addition to boosting productivity in the economy, thanks to an ambitious plan by Geothermal Development Company (GDC). Eng. Johnson Ole Nchoe, GDC’s managing director says the accelerated production of geothermal power to boost the country’s electricity supply will lower the cost of living and the cost of doing business. Kenya has one of the largest reserves of geothermal energy in the world estimated at 10,000+ MW, and is ranked among global top green energy producers. Geothermal has also been determined as the cheapest source of power in Kenya. It is reliable and its price can be predicted over the project’s lifetime. It is also not affected by weather variability or factors such as fluctuations in international oil prices. GDC has mined 412 MW of steam at the Olkaria geothermal project, and 150MW in Menengai. Out of the steam developed in Olkaria, GDC is selling 320MW of steam to KenGen for conversion into electricity, earning an annual revenue of Ksh3 Billion. “The addition of 320MW of geothermal power into Kenya’s national grid has driven down the cost of power by between 22 per cent and 35 percent for domestic and industrial consumers respectively. This has assisted the government to meet its target of providing affordable and reliable green energy,” says Ole Nchoe.

Selling steam Mr Nchoe explains that at the request of the government of Kenya, GDC in the 2009/10 financial year drilled 36 geothermal wells at the Olkaria geothermal project, owned and managed by KenGen. WATTS UP AUG - SEPT 2017

GDC also inherited 23 wells drilled by the government prior to its incorporation, bringing the total wells owned by GDC in Olkaria to 59. “By providing KenGen with steam for electricity generation, GDC has helped displace diesel-generated power which is expensive and environmentally unfriendly.” One kWh of diesel-generated power costs Kshs 22 while the same amount of geothermal power go for only Kshs 8. This is a huge saving. Among its mandates, the GDC has the role of de-risk geothermal fields to pave way for private sector entry into the sector. One of the models that GDC has adopted to meet its mandate entails mining steam and selling it to independent power producers for conversion into electricity. GDC has already tested that steam sales model in Olkaria by selling it to KenGen and is now applying the same model in Menengai.

De-risking projects Of the 150MW of steam in Menengai, GDC has contracted three independent power producers (IPPs) to generate 105MW of electricity. The three IPPs are Quantum Power, Sosian Energy & OrPower 22. GDC’s geothermal power in Menengai will have a tariff of Ksh 7 per kWh which is much cheaper compared to other electricity sources. The IPPs have signed a steam supply agreement with GDC and a power purchase agreement with Kenya Power, the national electricity off taker, for period of 25 years. Currently there is sustained demand for steam given that GDC has succeeded in de-risking geothermal projects in Kenya making investment in geothermal energy very attractive and viable. . Menengai has a potential to produce 1600MW, which will be exploited in three phases.

“We plan to develop 1000MW in the next 10 years and we are aware that the Ministry of Energy and Petroleum is working closely with the Ministry of Industrialisation to establish industrial parks located near our geothermal projects. These parks will be home to industries that will benefit from cheap captive power,” said Mr. Gershom Otachi, chairman of GDC Board of Directors. Mr. Otachi adds, “We know that the power we generate will always be needed, first to displace diesel generated power, secondly to power industrial parks and thirdly, Kenya can always export power through the East Africa Power Pool.”

CORPORATE NEWS 47

(Left) Eng. Johnson Ole Nchoe, GDC’s Managing Director and CEO of GDC lauching one of the projects

Concession loan According to business captains, creating industrial parks near sources of power production will help in taming high level of unemployment, mainly youth graduating from local universities and help in development of new business centers. In Baringo and Turkana Counties lies the Baringo-Silali Block which has an estimated potential of 3,000MW. Development of this huge geothermal resource has started and it will be done in phases. Phase I has received funding from the Government of Kenya and KfW. The Government of Kenya (GoK) is funding the construction of access roads and community engagement initiatives while KfW has given GDC a concessional loan

of Kshs. 9.5 billion (80 Euros million) for the drilling of 15-20 geothermal wells, undertaking several consultancies and installing a water pipeline to supply water for drilling.

and employment. For the last five years, the company has expended over Ksh100 million on direct employment of communities living near the geothermal sites.

Direct employment

“The addition of 320MW of geothermal power into Kenya’s national grid has driven down the cost of power by between 22 percent and 35 per cent for domestic and industrial consumers respectively” – Eng. Johnson Ole Nchoe, GDC managing director.

Detailed surface studies were completed in early 2013 and an Environmental and Social Impact Assessment (ESIA) License obtained from NEMA. A community engagement framework has been established and the community has given GDC land access rights.

GDC steam fields

GDC has implemented a vibrant Community programme dubbed JiraniWa-Karibu which extends assistance in the areas of health, education, water AUG - SEPT 2017 WATTS UP

CORPORATE NEWS

UNMASKING KPC OF THE FUTURE The agency has a vision to become one of the top revenue energy state agencies. By upgrading its pipelines, investing in human resource development and building a modern jetty in Kisumu, even its revenue mix is set to change. By NICHOLAS WAITATHU and MARION WAGAKI

enya Pipeline Company (KPC) plans to increase its annual earnings to about Sh100 billion by 2025.

More emphasis, the company management says, will be directed towards enhancing infrastructure and tapping into new areas of investments in the petroleum industry. KPC Managing Director (MD) Joe Sang states that the company annual turnover is expected to increase to Ksh150 trillion ($1,500 billion) and profit before tax of Ksh80 billion ($ 800 million) in the next

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eight years. “Pipeline transport and storage business which now contributes 100 percent of PBT will contribute 78 percent in the year 2025 and the other 22 percent will be from new business lines such as LPG and the training school’’ says Mr. Sang. He added, “In line with KPC vision of Africa’s premier oil and gas Company, KPC targets to play in upstream, midstream and downstream business as the business of KPC will be diversified.” Recently during a three day 49th Global oil

and gas show at Calgary, Alberta, Canada Sang articulates that the company will influence new investment oil and gas as well as seeking new investors to help in developing content in the two subsectors.

Human resources He observed that Africa has plenty of resources to stimulate high economic growth but hastened to add that the endowed capitals requires combined to be fully harnessed. He noted that the success in oil and gas business in Africa is highly hinged to human resources capacity development,

CORPORATE NEWS 49

KPC Managing Director (MD) Dr. Joe Sang

saying this should be enhanced so that the countries not only enjoy oil royalties but also employ the youth. KPC has already established Morendat Institute of oil and gas to enhance human resource development and further the company is seeking partners to develop local content in the two industries. The company has lined up a number of infrastructure projects in or4dert to increase oil delivery into the region. For example, the Kisumu oil jetty expected to be complete in October this year. Ther facility, Sang stated will enable Kenya to start exporting fuel to the wider East African region through Uganda and Tanzania.

Accidents The Jetty he said is expected to boost quantity in Kisumu by 1 billion litres a year in phase 1 and up to 3 billion litres per year by 2028. Sang says the jetty is further expected to enhance and improve the reliability of fuel supply to the export market of Uganda, Rwanda and Eastern Democratic Republic of Congo which by 2016 increased to 3.5 billion litres compared to 2.4 billion in 2010. “This Jetty will facilitate safe transportation of petroleum product

through Lake Victoria to the neighbouring countries by removing hundreds of trucks from the road daily. This will reduce the number of accidents, fuel fires, siphoning on our roads hence saving lives and conserving our environment” Sang said. The company has also commissioned the 122 kilometre 10 inch Sinendet to Kisumu pipeline, dubbed Line 6, to increase the flow rate of fuel to Kisumu by 350,000 litres per hour. The line runs parallel to the existing Line 3.

Export market Energy and Petroleum Cabinet Secretary, Charles Keter, says the two projects will work hand in hand to increase access to fuel in Kisumu and enable KPC leverage on the Kisumu oil Jetty to enhance petroleum product availability in the Western Kenya and the export market of Uganda, Eastern DRC, Rwanda, Burundi, and Northern Tanzania. Kenya Pipeline has the capacity to pump over 460,000 litres of fuel per hour into Western Kenya. The MD says the Thange oil spill cleanup in Kibwezi is 90 percent complete. “There is sufficient progress on the cleanup and we are determined as KPC to have this environment fully restored. We are working closely with other agencies of government including NEMA, WRMA

and the Makueni county government to have this matter finalized,” said Sang.

Fire systems The company, he confirmed, is replacing the ageing Nairobi-Mombasa pipeline at a cost of Ksh48 billion. “The 14-inch Mombasa-Nairobi pipeline was constructed in 1978 and has been in operation for 39 years, way beyond its 25year useful life. Being the only pipeline that feeds the country and its neighbours, it has to be kept in operating state through constant repairs and inspection thus the replacement” he explained. Mr Sang says the new line will be fitted with fire-fighting systems in new stations, installing energy efficient equipment and pipeline monitoring technology to ensure easy spotting of damages on the line. The project to be commissioned this year will improve the safety, reliability and efficient delivery of product to KPC’s customers and reduce the losses and damages caused by spillage on the current 14” Mombasa -Nairobi pipeline.

AUG - SEPT 2017 WATTS UP

CORPORATE NEWS

CALMING TEACUP STORM WITH MINI HYDRO With energy costs accounting for about 30 per cent of the operation costs in factories KTDA is placing a big bet on its hydro plants to cut costs and create a new revenue stream By MARION WAGAKI

ver 500,000 tea farmers affiliated to the Kenya Tea Development Agency (KTDA) stand to earn high incomes as the agency invests in cheaper source of energy to tame high cost of production. The agency managing director, Lerionka Tiampati says tapping into hydropower and other sources of energy seeks to enhance small scale farmers’ earnings and at the same time augment KTDA’s financial strength. The agency is implementing aKsh5 billion power project Under the project Tiampati says the company expects to produce over 42 megawatts and thus enjoys energy cost reduction at 30 percent of the total production cost cutting by Ksh18 per kg of made tea. “We expect to reduce electricity by Ks 10/kg of made tea and reduced

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heat by Ksh8/kg used on made tea,” says Tiampati. Depending on size and crop volume individual tea factories spend between Ksh30 million and Ksh65 million annually on electricity. Other variable cost include fuel cost adjustment and forex that are used by Kenya Power in the calculation of electricity bills.

Joint ventures He added, “To achieve our goal we established a special purpose vehicle – KTDA Power Company (KTPC) to fast track the power production project. All the tea factories have been grouped into 12 regional power companies (RPC’s) which have been registered as joint ventures

by factory companies.” KTDA owns 12.5 percent share in each RPC while the remaining shares are held by several tea factories in the region. The larger power company he said is coordinating all the 66 tea factories it manages to produce their own power with a view to reducing high production cost which has eaten into their profits annually. “We expect out of the entire project we will be able to diversify our revenue sources, increase power supply reliability (quality) and also reduce greenhouse gas emissions,” he added. During the construction of the power projects, Tiampati said more than 2,100 jobs will be created and around 60 after commissioning.

Captive power Investors supporting the implementation

CORPORATE NEWS 51

Ground breaking ceremony of the Lower Nyamindi, South Mara, Iraru and North Mathioya hydro-power projects

KTDA Power Company (KTPC) to fast track the power production project. All the tea factories have been grouped into 12 regional power companies (RPC’s) which have been registered as joint ventures by factory companies.

of the projects are guided by the fact that captive power is imperative for the tea business. Additionally, the energy investment projects aims to have a high development impact in the teas growing regions. In an interview recently, in his KTDA office the power company General Manager Eng. Lucas Maina said some of the power projects were already operational, producing and selling surplus to the Kenya Power. The 12 power mini hydro power projects he said are being financed under an arrangement that involves the framers and the agency. “Farmers are contributing 35 percent of the total project cost while KTDA has provided a debt of 65 percent. The loans are being paid by the regional power companies.

Electricity bills “Energy costs account for about 30 per cent of the operation costs in tea factories with electricity alone accounting for 17 per cent. With the new hydro plants, the factory is set to cut operation costs and additionally earn money from selling excess power,” Eng Maina says The manager says that the internal power generation through small hydro is thus critical to the factories because they can reduce their electricity bills by 50 percent equivalent to saving Ksh2 per kilo of green leaf supplied. Kenya Tea Development Agency (KTDA) is the largest tea business in East Africa and represents 60 percent of tea sales in the country. It is owned by over 500,000 farmers through 66 factories. AUG - SEPT 2017 WATTS UP

ENERGY EFFICIENCY

MAKING EVERY UNIT COUNT KAM has been inspecting, surveying and analyzing energy conservation buildings, processes, or systems to reduce consumption without negatively affecting the output. By MARION WAGAKI

eavy consumers of power largely the manufacturers have benefited from power cost reduction of over 30 per cent in the last decade, thanks to implementation of energy audit initiatives by industry players. Government and private sector have been pursuing energy audit measures with a view to reducing cost of production which largely affect profitability trend. Since 2006, Kenya Association of Manufacturers (KAM) has been implementing strategies designed at checking their operating systems and processes with a view to reducing increasing cost of energy which to large extent contribute to high production cost. KAM has been inspecting, surveying and analyzing flows for energy conservation in a building, process, or system to reduce the amount of energy input into the system without negatively affecting the output. In 2012, Energy Regulatory Commission (ERC) enacted regulations for companies to adopt in order to reduce high cost of electricity. KAM chief executive officer Phyllis Wakiaga says since the inception of the energy audit mechanisms companies have saved more than Ksh12 billion. “The energy cost in production ranges between 40 per cent and 60 per cent depending on the industry. For instance, cement and metal industries are high energy consumers,” said Wakiaga. She added, KAM together with the Ministry of Energy and Petroleum Development

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established the Centre for Energy Efficiency and Conservation (CEEC) in 2006.

Compliant Wakiaga stated the centre runs energy efficiency and conservation programs designed to help companies identify energy wastage, determine saving potential and give recommendation on measures to be implemented. The Centre also runs an energy audit programme open to all companies doing business in Kenya to help reduce their energy consumption that can save an average of 20 percent of their energy budgets. ‘‘Companies,’’ she said, ‘‘consuming more than 180,000 units of energy per year are required to carry out an energy audit every 3 years, and implement at least 50 percent of the recommendations.’’ “This is a legal requirement as stipulated in the Energy (Energy Management) Regulations 2012 that for a facility consuming more than 180,000 kWh of Electrical and Thermal Energy, then it must be compliant with the energy regulations,” she added. Wakiaga explained that undertaking of energy audits impacts positively in the care of environment by reducing energy consumption and also reduces carbon emissions.

Energy managers Wakiaga says that inspection and analysis of energy flows for energy conservation

reduces the amount of energy input into the system without negatively affecting the output. “Energy audits are an opportunity for organisations to save on energy costs. Hence high energy consumption coupled with low and intermittent power supply and inefficiencies necessitated the need to have energy management regulations”, she said. So far, Wakiaga confirmed that over 800 organisations in the country have been audited including large companies, government institutions as well as the small and medium enterprises (SMEs). “To date, 1005 facilities have complied with the Energy Management regulations and the same submitted to the ERC. We have also trained more than 400 energy managers in industry to help enhance the scope of knowledge in energy management,” she added. The industry players managed to establish the Association of Energy Professionals of East Africa (AEPEA) to enhance self-

ENERGY EFFICIENCY

Chandaria Industries wins the Overall Energy Management Award at KAMs 13th Annual Management Awards 2017. Far Left: Phyllis Wakiaga, CEO, KAM

regulation of the profession. “We encourage industries to take advantage of the energy audits and to invest in implementing the findings of these audits, such as upgrading of some of the outdated equipment “, she said.

“High energy consumption coupled with low and intermittent power supply and inefficiencies necessitated the need to have energy management regulations” Phyllis Wakiaga, KAM Chief Executive Officer. Water heating However , Wakiaga added that in order to grow the energy efficiency market further, more qualified energy professionals need to be trained and regulation tightened

but hastened to add that the same require concerted efforts from the energy industry value chain players. Currently, we have 55 licensed energy auditors and 22 licensed firms who are serving the industry. Companies and commercial facilities with hot water requirements exceeding 100 litres per day are also in the process of complying with the Solar Water Heating regulations. The deadline to have complied with the regulations was May 25, 2017. ”Companies have however been seeking alternatives to reduce the high cost of production by implementing energy efficiency measures which include process optimization, technology adoption, fuel switch to renewable energy,” Wakiaga said. She noted that more needs to be done though to increase the level of implementation of these measures considering that the industries face challenges such as high investment, lack of technological knowhow and inadequate financing mechanisms

for green energy. The CEO noted that government needs to develop policy to grow the demand since an increase in generation capacity without a corresponding increase in demand will lead to higher energy cost.

Institutional facility “At the moment , our maximum demand is around 1700MW and our generation capacity is around 2400 MW and the economy as is now cannot absorb 5000MW release initiative started four years by the government,” she said. ‘‘An increase in generation capacity without a corresponding increase in demand will lead to higher energy cost for consumers.’’ Non-compliance of energy audit she warned to any owner or occupier of industry, commercial and institutional facility using any form of energy will attract a penalty of Sh1 million or one year imprisonment for the facility head. And Sh30, 000 per day for delay in submission of the implementation report.

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54 MONEY MARKET

SETTING FOUNDATION FOR GREEN BONDS IN KENYA Stakeholders in Kenya are working to set standards and policy framework for the lucrative financing option that has already taken root in other developing countries BY MARION WAGAKI AND NICHOLAS WAITATHU

enya is yet to tap into the lucrative green bond market which if exploited can support resource generation to finance projects designed to mitigate vagaries of climate change. Proceeds from green bond are expected to fund poverty programmes, agriculture, water, infrastructure development and clean energy which are some of the major issues Kenya and other developing countries are grappling with. Green bonds are tools used to mobilise funds to support projects that have positive environmental and or climate benefits.

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Paul Orem a green bond expert says Kenya is still slow in enhancing its attention to exploiting the opportunity as stipulated under the United Nations Sustainable Development Goal (SDG). He however said that although Kenya Bankers Association (KBA) and Nairobi Securities Exchange (NSE) have been on the forefront in championing Green Financing Initiatives with all banks welcoming the idea, the slow pace is worrying as several projects are waiting to explore this noble objective. “The issuance of the country’s first bank-

supported corporate bond will help fund projects that invest in sustainable green environment projects such as renewable energy, solid waste management, water, agribusiness, transport and urban planning”, he said .

Policy framework Orem noted that Financial Sector Deepening (FSD) recently committed Ksh62 million (USD 620,000) to support the noble global initiative in Kenya. Stakeholders including financial and technical advisors, Central Bank of Kenya, National Treasury, local commercial banks, Capital Markets Authority (CMA),

MONEY MARKET 55

Retirement Benefits Authority (RBA) and Insurance Regulatory Authority (IRA) are expected to set up marketing and packaging strategies, standards, policy framework and amendment in regulations prior to floating the bond. CBK Governor Patrick Njoroge says the Central Bank will develop a legal and policy framework for green financing initiative that will enable Kenya to issue green bonds. The first bond to be floated by the end of this year is designed to gauge the investors’ appetite and will be floated by the end of this year. Habil Olaka, CEO of Kenya Bankers Association states that the global financial community is already transiting towards green finance because it promotes sustainable development. “We will develop and sustain the best green bond practices that will certainly

strengthen financial organizations in the country,” says Mr. Olaka.

Slow pace According to UN objective number 7 of the SDG by 2030, enhancement of international cooperation should be directed to facilitate access to clean energy research and technology. For example, energy efficiency, advanced and cleaner fossil-fuel technology, renewable energy and promote investment promotion in infrastructure and clean energy technology. The UN action plan will be by mobilising $100 billion per year starting in 2020 as well as investments in energy efficiency as

a percentage of Gross Domestic Products (GDP). “These objectives cannot be achieved with the slow pace the Kenyan stakeholders are handling this global matter. Already Morocco is the first country in the continent in debut of the green climate bond and we expect many proactive countries to follow suit in the continent”, Orem said. Globally, Orem added, the green bond market is worth Ksh12.1 trillion (US$118 billion). Orem observed that with good support from all key stakeholders, Kenya can benefit from high foreign direct investment inflows in support of clean energy research and development and renewable energy production including hybrid systems.

Tax incentives He noted that we need all stakeholders to work together and come up with standards and policy framework and amendment

in regulations prior to floating the bond and also develop the green climate bond strategy in marketing, structuring, packaging and pricing.

The policy reform he said will require the pension and insurance industry to review the authorized asset allocation (admitted asset) quantum exposure to the green climate bond as a standalone asset class. Under the UN SDG agenda, Orem noted that the private sector players such as the pension industry, life insurance, foundations, philanthropist funds, social impact investors is expected to play a critical role in mobilization of the financial resources.

Paris agreement “Most institutional investors are looking for a trade-off between risk and returns. Elaborate and documented tax incentives will give appetite to such investors” he said. In April, the World Bank’s International Finance Corporation (IFC) announced it will be launching the “world’s largest green bond fund dedicated to emerging markets,” by investing up to Ksh32.5 billion(US$ 325 million) out of Ksh200 billion US$2 billion) Green Cornerstone Bond Fund.

“Tax incentives to attract and crowd in the investments from the private sector such as pension industry, insurance, commercial banks, high net worth individuals and international investors as the issue fall under the infrastructure bond is also very important,” he said.

According to the not-for-profit Climate Bonds Initiative, the issuance of green bonds grew by 42 percent in the first quarter of 2017 compared to the same period in 2016, totaling USD21.76 billion. Paris Agreement noted that tapping green bond markets will be an important strategy to raise capital for low carbon and climate resilient infrastructure that can support meeting Nationally Determined Contributions (NDCs).

The process, Orem said should however start with policy legal reforms and appointing transaction advisory and placement team to structure and develop the strategy of the bond.

“We will develop and sustain the best green bond practices that will certainly strengthen financial organisations in the country,” Habil Olaka chief executive, Kenya Association of Bankers.

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Milestone KV2030 Projects Commissioned by H.E. President Uhuru Kenyatta in Kisumu

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REGULATION 57

LEVERAGING LAWS TO BOOST INVESTMENTS From competitive licensing regime to price controls and curriculum development, the ERC says enforcement of regulations has attracted energy firms in droves By NICHOLAS WAITATHU

onsistent implementation of regulations in the energy industry has contributed to job creation as more companies extended their investment in the country. According to the Energy Regulatory Commission (ERC), hundreds of facilities undertaking various activities in the energy sector have been licensed in the last decade. ERC acting director general Robert Oimeke said the coming into the market of the facilities has contributed to job opportunities in the local labour market. “So far ERC has licensed 88 Petroleum Import Companies, 31 Licensed LPG import companies, 47 licensed bulk petroleum storage depots.

Other certified companies include 37 bulk LPG storage and filling plants, 42 LPG cylinder brand owners, 489 petroleum wholesalers,62 Bulk LPG wholesalers, 156 LPG cylinder wholesalers, 82 Bulk LPG transporters and 2,100 petroleum retail stations,” said Oimeke. He added, the Kenya electric power sub-sector has also witnessed several Independent Power Producers (IPPs) enter the power generation segment contributing over 30 percent of the power consumed in the country.

Energy segments “There are several Kenyans employed by the IPPs like Tsavo Power, Rabai Power, Iberafrica, ThiKa Power, Gulf Energy, Triump Power, Orpower IV and in addition,

there are over 4000 Electricians and 1500 Electrical contractors in the country”, added Oimeke. The IPPS have invested in all the segment of the energy -hydro, thermal, geothermal, biogas and soon Lake Turkana wind and several solar power plants which enrich energy mix. He added two private companies have been licensed to operate public power mini grids in the country to complement the government efforts. The Commission he says has developed four regulations on Renewable Energy and Energy Efficiency -solar water heating regulations, solar photovoltaic system regulations, energy management

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58 REGULATION

regulations and appliances energy performance and labelling regulations. The Solar water heating regulations have made it mandatory for any premise consuming more than 100litres of hot water a day to install and use solar water heating systems.

Employment “The installation of these systems is done by licensed technicians. This has spurred employment of technicians who carry out these installations”, he said adding that at the same time, energy management regulations compel high and medium consumers of energy to carry our energy audits and this has served to create employment for energy auditors. Currently, he said there are 342 licensed Solar Photovoltaic Systems technicians, 147 licensed Solar Water Heating technicians and 48 licensed energy auditors. “Through implementation of the regulations ERC is confident that the energy sector is getting better by the day”, the CEO said. Mr. Oimeke noted that system losses in the interconnected grid have also reduced due to incentive regulation implemented by ERC in the electricity tariff for Kenya Power. WATTS UP

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These include licensing electricians and electrical contractors to improve the quality wiring at the consumer premises, reducing cases on fire incidences and electrical related accidents.

Renewable energy portal “ERC has been mediating on several complaints and disputes in the sector involving consumers and service providers while development of a curricula for training technicians to build capacity for the renewable energy sub-sector to improve services to the consumers,” he confirmed. The DG said the sub-sector has benefited from development of the renewable energy portal a one stop information shop for investors in renewable energy. This has enabled high and medium energy consumers to record significant energy savings. While in the petroleum sub-sector, reduction in levels of motor fuel adulteration and dumping of export bound products has been ongoing. This is through the fuel marking and monitoring program, ERC has been able to bring the levels of adulteration ad export dumping from the initial 20 percent to the current 2 percent.

Efficiency Cost reflective petroleum pump price has also eliminated the rocks and feathers theory that existed prior to the Energy (Petroleum Pricing) Regulations coming into effect. “In that regime, whenever prices in the international markets shot up, the local pump prices moved up very fast like rockets whereas in the event of falling international market prices the local pump prices dropped slowly like feathers”, he said . High efficiency in the petroleum import process, he noted has also been achieved through implementation of a robust licensing process that ensures approval of financially sound companies thereby eliminating speculation and by extension congestion in the common user pipeline system. This in turn saves the country of demurrage from the petroleum carrying ships.

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GDC

SCORECARD Olkaria

Menengai

412

150

320

105

Total amount of steam (in megawatts) owned bt GDC in Olkaria

Megawatts from GDC’s wells at Olkaria added to the national grid

3.0B

Annual revenue from steam sales in Olkaria

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Total amount of steam (in megawatts) drilled by GDC in Menengai

Menengai Phase 1 steam oﬀeredto Independent Power Producers (IPPs) for conversion into electricity

Rigs owned by GDC

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