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Energy White Paper provides the spark for revitalising power sector – Business Daily

Ministry of Energy Cabinet Secretary Amb. Dr. Monica Juma (second left) flanked by other officials in the energy sector during a media briefing on April 14, 2022. PHOTO | DIANA NGILA | NMG
The Energy Sector White Paper issued by the Ministry of Energy last month is a good starting point in reviving the electricity sub-sector to achieve power accessibility, reliability, and affordability.
The Paper correctly defines energy as a public good and enabler of national productivity. Energy planning should be an integral part of national socio-economic planning. The Paper is not a government policy document but an expert analysis requiring stakeholder input for completeness and concurrence.
It presents a very ambitious plan that increases installed generation capacity from the current 3,000 MW to 100,000 MW by 2040 with funding leveraged mainly on global green capital for renewable energy projects, which directionally shifts energy mix away from high-carbon thermal generation.
The 2013 power generation plan that aimed at an additional 5,000 MW power generation within five years has not met targets after 10 years because of unrealistic demand planning, a pitfall to be avoided this time around.
Demand projections should be realistic and matched with national socio-economic development plans across all sectors and regions. The White Paper aptly recommends that energy sector insiders should not do energy planning alone, but with full participation of all economic sectors and energy consumer groups.
On an energy equivalency basis Kenya consumes more energy from petroleum than all electricity generated. No national energy plan targeting green credentials is complete without detailing how petroleum demands will transition to renewable electricity.
Major petroleum demand groups like transportation (road, and rail), industrial heating (cement, steel, mining), power plants, and domestic cooking (LPG) require specific plans for transitioning to renewable electricity.
Electricity and petroleum sub-sectors will need to jointly develop a realistic energy transition plan. Specifically, electrification of transportation will be the key driver of energy transition in Kenya. The White Paper recommends unbundling of Kenya Power’s mandate to improve service delivery at reasonable costs.
It recommends allocating large commercial consumers to Kenya Power with Rural Electrification and Renewable Energy Corporation (REREC) servicing smaller, mainly domestic, consumers. This recommendation carries inherent risks which may result in unintended consequences.
REREC’s capacity to deliver is in doubt while splitting or sharing common distribution assets can be inefficient and not cost-effective.
My recommendation is a regional approach whereby Kenya Power is split into three autonomous regional (Central, Western, Coast) companies with individual accountabilities to service all consumers in those jurisdictions. The White Paper is a smart report which can be enhanced by the incoming government to develop an electricity supply master plan.



Joseph Muongi

Financial.co.ke was founded by Mr. Joseph Muongi Kamau. He holds a Master of Science in Finance, Bachelors of Science in Actuarial Science and a Certificate of proficiencty in insurance. He's also the lead financial consultant.