The Kenyan government strives for 100% electricity access for all citizens by 2026. To achieve this, off-grid or decentralized renewable energy solutions can help connect rural areas that have low electricity demand.
In its 2018 National Energy Policy, the Kenyan government outlined plans to expand energy access to all citizens through its state-owned grid utility. While this can be feasible for densely populated areas, this strategy should be complemented by investment in available off-grid solutions through decentralised renewables to bring clean power to remote rural areas, a recent study by the Stockholm Environment Institute (SEI) finds. Some of these solutions, such as solar home systems, have incorporated technology and design that can uniquely favour or customize household electricity utilisation. For example, machine-to-machine (M2M) technologies can enable low-income households to access solar power products through a ‘pay-as-you-go’ (PAYGO) instalment plan. The solar home systems include embedded GSM technology for monitoring and metering usage as customers pay daily instalments via mobile money service until they pay off the balance and own the unit.
Renewable off-grid electricity generation and distribution solutions can alleviate some of the current issues that the Kenyan electricity system is struggling with, such as blackouts, fluctuating demand, and frequent droughts impacting hydropower output. They can also counter a push for stronger integration of fossil gas and nuclear energy as a response to the current unreliability of the power supply and high tariff rates.
Kenya has immense renewables potential, with the highest being geothermal estimated at 7-10GW. According to the Kenya Power Annual and Financial report, 2021, the current power generation is almost entirely renewables-based, with geothermal supplying 41%, hydropower 34%, and complementing sources from wind 14% and solar 1%.
How can Kenya benefit from developing off-grid solutions?
The government business model on grid extension and densification has proven to be unprofitable to the state-owned utility Kenya Power, as evident in the Last-Mile Connectivity project. The project aimed to extend low voltage network to households within 600 meters of a transformer and install new transformers cost-effectively. The opposite became true as the costs for connecting rural households were high compared to the economic and social benefits in terms of productive use of electricity. Further, they were facing credit constraints, bureaucratic challenges, and overall poor performance and service of the power utility.
Building upon previous research conducted by SEI on Gridless Solutions, the most recent study recommends that instead of the above-mentioned expansion, the government should implement an energy cooperatives model. This can be done by establishing energy communities in rural and off-grid areas, developing regulatory frameworks to support community energy generation schemes, as well as diversifying off-grid investment opportunities through public-private partnerships, and establishing an off-grid innovation fund.
Credit for purchasing solar lighting solutions and solar home systems is largely accessible in Kenya. The United States Agency for International Development (USAID) reports that more than 50 different lending applications were available over the mobile money system in 2019. The availability of mobile lending applications significantly increased consumer financing for solar lighting solutions, solar home systems and small-scale solar irrigation pumps. As Kenya is experiencing increased competition between multiple generators, this will eventually lead to lower wholesale costs increasing the uptake and access to electricity among the population.
Additionally, the government should tap into the growing ICT and IoT potential to shift to smart grids and community energy storage options. This could open new avenues for skills development and job creation and increase demand through the productive use of applications in the rural food and agriculture sectors, such as smart irrigation and cold storage to reduce post-harvest losses.
Thus, conventional solutions such as grid expansion should not be the only trajectory explored by the state for delivering least cost and reliable power to its citizens. A focus on off-grid electricity generation and distribution solutions can help Kenya to bring clean power to remote and rural areas which proved to be hard to reach with the main grid.
This guest post is written by Carol Mungo from the Stockholm Environment Institute who was a fellow in the EnerTracks training programme in Spring 2022. EnerTracks aims to deepen and foster international expertise on how to tackle the energy transition worldwide.