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Kenya joins big investors in renewable energy as EA plays catch-up

Friday July 24 2015
energy

East Africa is emerging as a global renewable energy hub thanks to completed and ongoing projects to exploit clean power sources such as geothermal, hydro, wind, solar and biofuels. TEA GRAPHIC | NATION MEDIA GROUP

East Africa is emerging as a global renewable energy hub thanks to completed and ongoing projects to exploit clean power sources such as geothermal, hydro, wind, solar and biofuels, a global agency report says.

The 280-Megawatt Olkaria geothermal project helped propel Kenya to contribute more than half or 56 per cent of the world’s steam capacity addition in the year 2014, according to REN21, a Paris-based body hosted by the United Nations Environment Programme (Unep).

Uganda is credited for using microfinance to deepen uptake of solar lanterns and clean cook stoves especially in rural areas, while Rwanda’s 28MW Nyaborongo hydropower project has increased the country’s capacity by a quarter.

Ethiopia’s 6,000MW Grand Renaissance hydropower project, currently under construction on the Abbay River (Blue Nile), is Africa’s largest hydroelectric power plant.

READ: 6,000MW Ethiopian dam nears completion
Tanzania is rolling out innovative renewable energy technology including five diesel-solar hybrid systems and wind-solar hybrids with a focus on public institutions in rural areas.

These are some of the green energy projects highlighted in REN21’s latest annual report titled “2015 Renewables Global Status Report” which provides an overview of global naturally replenished sources of energy such as sunlight, wind, water, geothermal heat, and biomass.

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East African economies are now banking on renewable energy sources especially geothermal, wind and hydro to address the twin challenges of supply shortfalls and high cost of electricity, given that these green sources cost half as much as diesel power.

Kenya, Uganda, Tanzania, Rwanda and Burundi are all plagued by ageing grid and frequent power outages that force businesses to resort to diesel-powered standby generators, according to a report by the International Energy Agency (IEA).

Only one in every five households in the EAC has access to electricity, the report says, with a majority of citizens relying on paraffin and unhealthy options such as firewood for cooking and lighting.

“The largest share of new geothermal power capacity came on line in Kenya, underscoring the growing emphasis on geothermal energy in East Africa,” says the report.

In 2014, Kenya added 358MW of total global steam power additions of 641MW, cementing Nairobi’s position as the world’s eighth largest producer of geothermal energy.

READ: Geothermal now largest supplier to Kenya’s grid

OrPower 4, Kenya’s sole independent power producer in the steam category, added 26MW to bring its total capacity to 136MW.

KenGen added a further 52MW to the grid from mobile geothermal wellhead power plants.

“Kenya installed more than half of the world’s new geothermal capacity, and Rwanda significantly increased its total generating capacity with the addition of new hydropower capacity,” REN21 said.

Rwanda’s grid was further boosted by the 2.2MW Rukarara hydropower plant.

Kenya spent a total of $1.3 billion on multiple power projects, making it the second-largest renewable energy investor on the continent after South Africa, REN21 said.

Algeria was placed third, followed by Egypt, Nigeria, and Tanzania.

Kenya’s heavy spending on clean power saw it ranked in the billion-dollar club alongside Chile, Indonesia, Kenya, Mexico, South Africa, and Turkey as the only countries investing more than $1 billion each in renewable energy.

REN21 mentioned that other East African states such as Uganda, Rwanda and Ethiopia are looking to exploit geothermal power but are slowed down by high upfront capital costs required for drilling and the high risk of encountering dry wells.

“Development has been slow, due not only to high upfront costs and project risk but also to limited local technological capacity,” the agency said.

Rwanda’s 8.5MW solar farm located in Rwamagana, commissioned in March this year, is the largest PV farm in sub-Saharan Africa excluding South Africa.

Burundi has also began work on a 7.5MW solar firm in Mubuga. The landlocked war-ravaged economy has a grid of 52 MW, including 15.5MW of diesel-generated power.

The $23.7 million Rwamagana solar plant is part of US president Barack Obama’s Power Africa initiative, a private-sector led push aimed at adding 10,000 (MW) of renewable energy across the continent.

READ: Demand for power attracts investors to Rwanda energy sector

In sub-Saharan Africa, some 620 million people, or more than two-thirds of the population, live without electricity, and 730 million people depend on polluting forms of cooking, World Bank statistics show.

M-Kopa, a pay-as-you-go solar scheme linked to M-Pesa, has already connected 200,000 households across Kenya, Uganda and Tanzania to its solar power system which consists of a panel, three lamps, radio and mobile phone charging kit.

Buyers pay Ksh2,999 ($30) upfront and a daily fee of Ksh40 (US Cents 40) via mobile money platform M-Pesa to access the solar-powered lamps and own the property after a year.

“This model avoids the high upfront costs usually associated with renewable energy systems since users pay for them in instalments over time,” the REN21 report says.

READ: More East Africans turn to solar power

The use of biofuels such as animal and crop waste is gaining currency across the EAC bloc.

Uganda is rolling out biogas-powered cooling plants to serve smallholder dairy farmers. Rural milk farmers lose between 20 per cent and 50 per cent of milk due to lack of cold-chain facilities, says a study by the University of Georgia, which is implementing the project.

Naivasha-based VP Group in March became Kenya’s first grid-connected biogas electricity producer, supplying 2MW generated from crop waste such as spent and rejected vegetables, maize stovers and cut off rose flower stems.

REN21 noted that use of liquid biofuels — primarily ethanol – remained low, with only Kenya and Ethiopia having blending mandates of roughly 10 per cent.

Community groups and non-governmental organisations in the region are also rolling out projects to promote use of solar, biogas, clean stoves and cleaner charcoal briquettes, especially in rural and urban informal settlements.

More than 90 per cent of households in East Africa use traditional biomass sources such as firewood, charcoal, agricultural residues and animal dung — posing health risks to families, destruction of forests and wastage of time — the renewable energy agency says.

A study in Uganda reported that use of biogas reduced the time women spent on cooking by as much as an hour a day, and also encouraged men to be involved in preparing food, REN21 said.

Solar Sister, a social enterprise operating in Uganda, Rwanda and South Sudan, provides women entrepreneurs with solar lanterns and mobile charging kits they can use both at their businesses and at home.

The $32.7 million Africa Biogas Partnership Programme, funded by the Dutch government and SNV, is currently constructing 70,000 domestic biogas plants across Kenya, Uganda, Tanzania, Ethiopia, Senegal and Burkina Faso.

Use of cleaner sources of energy gives women greater flexibility in managing their household chores, reduces energy expenses, and enables children to study in healthier and safer conditions, the report says.

The Paris-based organisation laud the EAC countries for putting in place policies that encourage investment in renewable energy.

REN21 praises Kenya for issuing regulations in 2012 that require all existing and new buildings using more than 100 litres of hot water a day to compulsorily install solar water heating systems to cover 60 per cent of the demand by 2017.

Uganda has developed a policy to increase the use of modern renewable energy to 61 per cent of the total energy consumption by 2017.

Furthermore, Uganda is using public bidding to support development of solar PV, and a feed-in tariff programme meant to attract private capital to the sector.

But REN21 is calling on East African governments to rein in counterfeit solar products being imported into the region and establish training standards for solar technicians to foster uptake of sunlight power.

“Many developing countries in Africa and elsewhere are challenged by a lack of quality assurance measures and skilled labour, leading to use of inferior products and poor installations, which have undermined solar thermal’s reputation,” the report says.

Sugar industries across the region are helping feed the grid with co-generation plants using bagasse, a waste product from sugarcane.

The sugar plants include Kenya’s Mumias, which has an installed capacity of 34 MW, of which 26 MW is supplied to the national grid. Kwale International Sugar has also built a co-generation plant that is set to inject 18MW into the grid.

Uganda has five bagasse-fired power plants including Kakira Sugar which produces 52MW, Kinyara Sugar (40.8MW), Kaliro (12 MW) Lugazi (5MW) and Mayuge Sugar’s 1.6MW.

Kenya’s 310MW Lake Turkana wind power project — the biggest wind farm in Africa costing €623 million — kicked off in early July after a groundbreaking ceremony by President Uhuru Kenyatta.

READ: Kenya takes the lead in wind power

Tanzania received a $132 million loan from China in March to fund the 50MW Singida wind power project, the first such plant for Dar es Salaam which relies heavily on thermal power sources.

Tanzania’s energy mix is skewed towards thermal plants with gas- fired plants producing 501MW and a further 495MW from liquid fuels, which account for nearly two-thirds of total capacity, which stands at 1,583MW.

READ: Tanzania to use gas to double its power by 2016

REN21 calls on governments and investors to focus on small hydro projects that can utilise smaller rivers to power rural villages. “Small hydropower has been credited for its suitability for improved rural electrification and for its potential for socially inclusive and sustainable development,” the agency said.

Kenya has two small hydro plants that feed the national grid — Imenti Tea Factory (0.3MW) and Gikira Hydro’s 0.514MW plant in Nyeri. KTDA, which owns the Imenti hydro plant, plans to construct 10 mini-hydropower plants with a total capacity of 22MW.

There are more than 20 small power projects lined up in Tanzania to produce about 100MW as a strategy to diversify its energy mix.

Dar es Salaam has 561MW of hydropower. Uganda is currently constructing the Karuma hydropower station which expected to generate 600 MW when complete while the 183MW Isimba hydropower plant is due to start generation in 2016.

New York-based Contour Global is extracting methane from Rwanda’s Lake Kivu to generate about 100MW of electricity in a $325 million project dubbed KivuWatt.

REN21 forecasts increased investments in renewable energy, saying clean power is seen by governments and regulators as a cheaper tool to power communities while offering investors lucrative opportunities.

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