Can Kenya Light the Way Toward a Clean-Energy Economy?

In the United States, we tend to think of electricity as something that is either on or off. You either have power, or you don’t. But in Nairobi, Kenya, electricity is experienced more like the hot water in an old building: sputtering, low-voltage brownouts contrast with sudden voltage spikes and power surges. Inconsistent electrical power does more harm than a suddenly ice-cold shower; refrigerators, computers and manufacturing equipment are frequently damaged, and routines are disrupted. Power outages cost the country an estimated 2 percent of gross domestic product annually.

That’s because the country’s power plants can provide just 1.2 gigawatts of electricity. The United States has more than 960 gigawatts of capacity, and one of its largest utilities, American Electric Power, serves about 5 million customers with its 38 gigawatts of generating capacity. In Kenya, that 1.2 gigawatt capacity serves more than 10 million customers, including homes, businesses, and industry—less than 30 percent of the entire country’s population. The remaining 70 percent have no electricity at all.

Kenya’s “Vision 2030” plan, widely praised when it was announced in 2008, calls for 10 percent annual economic growth, and estimates that at least 20 gigawatts of new energy capacity will need to come online in the next decade to support it. To achieve that goal, dozens of efforts are underway to aggressively expand Kenya’s electric power infrastructure and, in doing so, to “leapfrog” over fossil fuels toward a clean-energy economy.

The idea of leapfrogging first emerged when cellphones swept the continent, bypassing traditional landline technology. The number of cellphones in use in Africa ballooned to more than 615 million in 2011, from 16.5 million a decade earlier—a surge that ever since has spurred optimism among everyone from local politicians and NGOs to international businesses and media that other cutting edge technologies could carve a similar trajectory. Because of the opportunities opened up by Vision 2030 and other factors, nowhere does this excitement run higher than in Kenya’s energy sector.

Taking the leap

The lack of an incumbent telecommunications industry or existing telephony infrastructure played a critical role in the cellphone’s success in Africa, and for many, the absence of existing energy infrastructure suggests that the country has a similar opportunity to adopt and scale the use of new technologies quickly, avoiding the mistakes of the past. In this case, that means avoiding the fossil-fuel–lined path to development.

“In many ways, the beauty of Africa is that you're almost starting with a blank canvas,” says Bob Chestnutt, a London-based project director for Aldwych International, which is developing a 300-megawatt wind farm near Kenya’s Lake Turkana. “You really do have the opportunity to be innovative. You're not dealing with the legacy of 40, 50 years of fossil generation.”

Renewables to the rescue?

Kenya is particularly well positioned for an end-run around fossil fuels. Its location along the equator bestows the country with plentiful sunlight (on average, each square meter collects an estimated 4.5 kilowatt-hours per day of solar radiation, which can be converted to electricity; a more northern climate like Boston would be expected to get about 3.6 kilowatt-hours per square meter per day). In the Lake Turkana region, Kenya also has some of the world’s greatest wind potential. And the Great Rift Valley, which carves a jagged arc through the heart of Kenya, sits atop a hot spot in the earth’s crust that creates ideal conditions for geothermal wells. At a policy level, it doesn’t hurt that Kenya has dropped its import duties on renewable energy technologies.

Much of the nation’s energy today comes from large hydropower projects, many of them part of a series of linked dams and reservoirs known as the Seven Forks scheme. Located primarily along the Tana and Turkwel rivers, hydropower provides about 800 megawatts of electricity to Kenya’s grid. However, there’s little room for hydropower to grow; many rivers run dry for a good portion of the year, limiting their ability to provide consistent electricity.

Developers have already begun to tap into new energy opportunities, with geothermal leading the way. By next year, a series of geothermal wells will provide 280 megawatts of power to the grid, up from 157 megawatts today. By 2030, geothermal power is expected to meet more than a quarter of the country’s energy needs. “Geothermal is a very stable, sustainable source,” says Gregory Ngahu, a spokesman for Kenya Power, the nation’s only electric utility. “It’s quite robust.” 

Wind and hydropower projects account for more than 95 percent of the rest of the new capacity planned through 2030. Yet renewables are not a shoo-in for Kenya’s electrification push. Over the last few years, Kenya has discovered oil, natural gas, and coal deposits within its borders, tempting some to consider expansion of traditional fossil-fuel capacity. Hydropower has stumbled as climate change-linked droughts reduce water flow through critical rivers. And solar isn’t part of the Vision 2030 plan.

Another challenge for renewables is the need for new infrastructure to connect large projects to the grid. Led by state-backed organizations, Kenya’s power industry is building out several transmission lines to import power from neighboring Ethiopia, and also to bring electricity from new renewable projects to population centers where it’s needed. Developers of the Lake Turkana wind farm, for example, are building a 428-kilometer (266-mile) high-voltage transmission line from Lake Turkana to the existing grid. Crossing the geothermal-rich Rift Valley, the line will pave the way for future energy projects, Aldwych’s Chestnutt says. “Now, developers will take the initiative.”

Cutting the cord

Despite these efforts, the majority of Kenya’s population won’t gain access to electricity from these sources. Even though urban areas are growing dramatically, most Kenyans live far from the grid in rural towns and villages. And those who do live close to the grid can’t always tap into its benefits. Kenya Power charges approximately $400 USD per household for a grid connection.

“That is so far away, if you’re a poor Kenyan family,” says Jon Bøhmer, founder of Nairobi-based Kyoto Energy. “There are many places where the power lines cross over people’s huts and they have no way to connect to the grid.”

As a result, there’s a growing recognition that serving these areas will require a different approach. Locating a variety of smaller-scale resources in a single location, close to demand, could help expand energy access more quickly. Startups, nonprofits and even Kenya Power are all beginning to look to solar-based microgrids—small, self-contained power grids—as one possible solution.

While individual solar lighting systems, like the d.Light, have received much positive press in the U.S. and Europe, microgrids have the potential to power local industries. Bøhmer, a Norwegian software engineer who in 2006 moved with his Kenyan wife to Thika, near Nairobi, has introduced a solar microgrid system specifically for this market.

“Silicon Valley entrepreneurs come in saying, ‘We raised $3 million from a venture capitalist in San Francisco,’ with their 3-watt solar panel and LED light,” says Bøhmer. “They think they’ve sorted it out. Sure, now someone has lights and can charge their mobile. Great. But in the West, when you got power, you could run a machine, and build a business. That business could grow and build an entire industry. That kind of story is not possible, if you’re going to do it with these dead-end, stop-gap solutions.”

Bøhmer’s solution, dubbed the Butterfly Solar Farm, uses concentrating solar photovoltaics (PV) to generate electricity and captures solar thermal energy to heat water. His first customer is commercial tea producer whose operations include both agricultural and drying facilities.

The first pilot project, planned for later this year, will place the concentrating system’s solar-tracking mirrors, or heliostats, among the bushes in the existing tea fields—a kind of triple-cropping arrangement that produces tea along with 1 megawatt of electricity and 2.5 megawatts of heat. The heat is used in the drying facility, reducing dependence on wood-fired heat, and the electricity provides power to 7,000 on-site homes. Bøhmer estimates that the project will have a four-year payback period.

In the northern part of the country, Kenya Power has 10 microgrids with capacities ranging from 5 to 10 megawatts in pilot phase. Most of them were built in off-grid areas using diesel generators over the past several years; today, the utility is beginning to add a solar resource to the mix. During the day, solar power feeds directly into the regional distribution network, and at night, diesel generation fills the gap.

“Operating diesel plants becomes very expensive and unsustainable,” says Kenya Power’s Ngahu. “We are eventually going solar throughout.”

Terry Mohn, CEO of General Microgrids, which has offices in Nairobi and San Diego, California, advocates for “opportunistic” microgrids that leverage a wider range of local energy resources, such as solar, biogas, or small-scale hydro. No matter what the energy source, microgrids can provide reliable shared energy infrastructure while slashing the need for large-scale transmission infrastructure.

Efficiency first

If these efforts seem small, that’s because they are.

Kenya’s per-capita consumption of electric power in 2010 was less than one-tenth the global average for nations considered middle income, such as Argentina, India, and South Africa. Even with expanded generating capacity, the available supply for households isn’t likely to grow quickly. Because much of the planned growth in Kenya’s power is intended to support industrialization and tourism, limiting the growth of residential use will be critical to the success of the plan.

For that reason, one of the key “leapfrog” opportunities that may exist in Kenya is an opportunity to develop an energy policy where efficiency comes first. Implemented at the outset, efficiency efforts can give Kenya more bang for every buck it invests in new capacity.

One way to improve efficiency of the overall system is to meet some energy demands with heat instead of electricity. The central government has introduced programs aimed at spreading the use of solar thermal water heaters to harness the sun’s warmth for household water heating. Some innovators are looking for new ways to satisfy thermal needs on the industrial side, too. “Many industrial operations are still using wood fuel to power their boilers,” says Ernest Chitechi, Outreach and Partnership Manager for the nonprofit Kenya Climate Innovation Center, or CIC. As a substitute, the organization is working with entrepreneurs to develop a biomass briquette based on pineapple waste.

But the real challenge will be in controlling electricity usage where there is no substitute.

Pre-payment brings power to the people

Pre-paid electrical meters mirror the ubiquitous pre-paid cellphone. Users can purchase energy “tokens” from a handful of providers (including mobile payment providers). Each token has a 20-digit number that can be entered into an electric meter to unlock the purchased amount of electricity. Users pay higher prices per kilowatt-hour as they consume more electricity.

These increases are quickly recognizable by the user, encouraging conservation. At least, that’s the idea. In practice, some complain that rate information isn’t transparent enough, and that different token providers charge wildly variable service fees, confusing pricing signals to customers. Further consumer education is likely needed to ensure that they achieve these goals.

But pre-paid meters have another advantage. Like the rest of Kenya’s electrification initiative, they feed into the country’s broader economic development plan: The program is supporting new job growth, as vendors are needed to sell the energy tokens. In the mobile market, a similar marketing model created 100,000 new direct jobs.

Pre-payment has also helped the utility shore up cash reserves, because customers can’t miss payments. In September 2012, Business Daily Africa reported that by June of 2011, Kenya Power had already accumulated Sh7.4 billion ($84 million) in unpaid electricity bills for the year. With pre-payment, those funds can be used to further invest in its electrification program.

Renewable energy entrepreneurs are looking to the success of the model as a way to introduce their products to rural Kenyans, as well. “In most cases, people may not have adequate resources to invest in the upfront costs,” says Chitechi. “It’s one of the biggest barriers to adoption.”

Stima, Angaza and Azuri are among the startups offering pay-as-you-go solar, which allow users to install a few, small solar panels at a time, with no up-front cost. To access power from their panels, customers buy energy credits using a mobile payment system. Unlike the utility-installed pre-paid meters, however, solar customers can eventually pay off their solar panels and permanently “unlock” access to the electricity. Two entrepreneurs at the CIC are also looking at ways to leverage pre-payment to finance the up-front cost of renewable energy systems. 

If innovations like these can support cleaner, more efficient energy use for urban and rural customers alike, Kenya just may have a chance to make the hop toward a strong, low-carbon economy.