“Leaving no one behind” in the newly enacted Energy Law

This post is by ACCESS member, John Kioli. John is a member of the National Climate Change Council in Kenya and the Chairman of Kenya Climate Change Working Group.

In summary:

  • The Energy Act requires all county governments to carry out feasibility studies and develop renewable energy master plans.
  • Low-income households, located off the grid, in rural areas, spend more than 20% of their total income on energy.
  • The government should invest in affordable 0ff-grid solar power and create an enabling environment for private sector participation.

In March this year, Kenyan President Uhuru Kenyatta, signed the Energy Act. The Act provides for an established fund by counties that will prioritize energy access. Each county is required to develop and submit a county energy plan to be submitted to the Cabinet Secretary in respect of its energy requirements. The counties are also mandated to carry out feasibility studies for renewable energy aimed at providing relevant information for optimal exploitation of resources and to aid in the development of renewable energy master plans.

High cost of energy

The cost of energy in Kenya causes a substantial economic burden to low-income households, particularly the poor in rural areas with households spending more than 20% of their total household income on energy uses. The majority of these households rely on fuel-based sources of lighting such as kerosene and candles, which expose them to severe fire and health hazards.

Kenyans have to contend with punitive tariff prices, which are worsened by the high cost of energy infrastructure such as land acquisition and wayleaves. The challenge faced by low-income Kenyans is moving up the energy ladder by using more convenient, clean, and affordable energy. High prices for liquefied petroleum gas encourages ‘fuel stacking’ – where households adopt more than one type of fuel, rather than ‘fuel shifting’ as only a few people in rural areas can afford the refilling prices.

Inadequate infrastructure and data

Inadequate port facilities for handling cheaper energy resources including coal and natural gas coupled with delays in decision making due to complicated corporate governance structures have continually contributed to energy poverty in Kenya.

The situation is worse in counties where fiscal and other incentives for private sector investment are insufficient and majority of land use master plans for energy infrastructure are hardly updated. To add on, counties are faced with inadequate energy data that is crucial to guide decision making for energy access development programs at the county level.

This is further aggravated by a lack of understanding and uptake by county governments, investors and other stakeholders for more evidence-based and innovative approaches needed to deliver Sustainable Development Goal 7 on universal energy access.

Reaching the ‘Last Mile’ communities

The Last Mile Connectivity Project is a government initiative that intends to add an additional 1.5 million Kenyans in rural areas to the national grid. The project involves extending a low voltage network to reach households located within 600 meter-radius from a transformer, thereby reducing the cost of accessing electricity for the customer and supply for the power provider.

These projects have seen poor people in rural areas undertake productive activities to improve their livelihoods as a result of access to modern energy. For example, food enterprises requiring power for cooled storage of agricultural or fishery products and value addition have thrived in the rural areas.

Small businesses such as salons, welding, shopkeeping, barber shops among others have improved as services can be offered in the late evening and at dawn. Health facilities and schools have access to required energy standards for optimal service delivery. For example, a student has extra hours of studying while patients can access technical services such as scanning, X-rays among others.

The role of government

In line with Kenya Vision 2030, Kenya Electricity Company Limited (KETRACO) has already completed the construction of a number of high voltage transmission infrastructure comprising of lines, switch gears and sub-stations across the country. These include the 482 km 400kV double circuit Mombasa-Nairobi project which is the first of its kind in the region, the 97 km 132kV line, and sub-stations from Mumias Sugar Company through Rang’ala, to Kisumu, Kamburu-Meru 122 km single circuit 132kV line, among others.

In addition, the Rural Electrification Authority (REA) has aided through connecting public facilities and surrounding “last mile” homes across all 47 counties. REA has helped move rural electrification from 4% to 32% of rural households, largely through its efforts to connect ~60,000 public facilities (mostly primary schools) around the country and all household consumers within 600 meters of those facilities.

The government should expand renewable energy by supporting investments in the sector and aligning them with support from the international community. For instance, the Ministry of Energy could run auctions where private sector companies bid to invest in energy infrastructure. The government should also ensure that incentives such as tax exemption, speedy approval processes, and suitable regulations are available to interested parties and provide a framework for private sector investment.

Another significant advancement would be to make solar power affordable and convenient, particularly in rural areas where only a few households are connected to the national grid. Kenya needs to exponentially expand its energy transmission network which is plagued by flaws dating back decades. For example, the power generated from the Olkaria geothermal power station, cannot be used by the households and businesses that need it in Kisumu – only about 250 km away.