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