KenGen ventures into renewable energy to lower cost of power
What you need to know:
- KenGen Managing Director and CEO Albert Mugo says plans to begin the 140MW Olkaria V and phase I of the 80MW Meru Wind projects are at advanced stage and will come on stream by early next year.
- Kengen has already attracted funding from development partners, including Japan International Co-operation Agency (JICA), the French Development Agency (AFD) and the German Development Bank (KfW).
Electricity costs are set to drop further as Kenya Electricity Generating Company (KenGen) plans more investments on renewable energy resources.
The electricity generator has lined up several mega projects on solar, wind and geothermal power generation totalling to 700Mega Watts (MW).
KenGen Managing Director and CEO Albert Mugo says plans to begin the 140MW Olkaria V and phase I of the 80MW Meru Wind projects are at advanced stage and will come on stream by early next year.
Kengen has already attracted funding from development partners, including Japan International Co-operation Agency (JICA), the French Development Agency (AFD) and the German Development Bank (KfW).
The company also raised raised Sh6.4 billion from its rights issue that it will also use to finance many of its renewable projects, Eng Mugo said.
At the beginning of the year JICA signed a Loan Agreement worth Sh40bn for the construction of Olkaria V Geothermal Power Plant.
The solar power stations will be stationed in Turkwel, Gitaru hydro power stations and in Kwale.
KenGen had previously held back from investing in solar energy due to high cost compared with other power generation sources but the price of solar equipment has now reduced making it cheaper to invest in.
Eng Mugo explained that there has been a drastic reduction in the cost of solar generation technology making it a viable source for energy generation.
According to him, the cost of solar equipment has since come down by about 70 per cent after the government moved in to zero-rate import duty and removed Value Added Tax (VAT) on renewable energy equipment and accessories.
“In 2012 we carried out a study which showed that we needed 16.4 US cents per kilowatt-hour(KWh) for development of solar that could be connect at that time the feeding tariff for solar was12 US cents per KWh,which didn’t make economic sense,”
By investing more in renewable energy means very little electricity will be generated from diesel, which will have a positive effect on both the environment and electricity tariffs.
Eng Mugo points that diesel will run just as emergency, but not as base load plant in electricity generation.
