Possibilities and Barriers for Increasing Renewable Power Generation in Kenya and Tanzania

Supplementary Material

The main objective of this Master’s thesis is to examine the possibilities and barriers for Neo-Carbon Energy concept and related business in Kenya and Tanzania. The main idea in Neo-Carbon Energy ecosystem is a 100% renewable energy (RE) system where mainly solar, wind, and other renewables such as hydro, sustainable biomass, and geothermal are used as energy sources. This calls for the analyses about the energy and environmental policy, electricity market design, business and operational environment, and available energy resources in these two countries. In addition, energy system scenarios for Kenya and Tanzania are developed and their impacts on CO2 emissions and costs are analysed using EnergyPLAN simulation tool.

The analysis indicates that Kenya and Tanzania offer one of the largest and dynamic market, but again there are numbers of challenges to renewable energy infrastructure. Both countries have abundant forms of energy resources ranging from hydropower to geothermal, biomass, wind, solar, uranium, coal and natural gas, which remain largely untapped. Presently, the main source of energy services in both countries is the traditional biomass (firewood and charcoal). Further, the electricity generation market in both countries is partly liberalized with significant and growing Independent Power Producers (IPPs). Both governments have designed some regulatory tools (such as Feed-in tariff scheme, Standardized Small Power Purchase Tariffs, among others) in order to attract private capital investment in renewable power generation, while at the same time accelerate the national electricity access rate. Yet, the level of investments in renewable electricity is currently not sufficient to meet the rapid growing demand for electricity in the two countries. In 2014, the per capita electricity consumption was 100 kWh in Tanzania and 171 kWh in Kenya, compared to Mozambique at 463 kWh per capita (a similar low income economy), and South Africa at 4,240 kWh per capita. In the quest for quick expansion of energy access, Kenya and Tanzania have therefore planned to diversify their power generation sources and the bulk of the power generation capacities are expected to come from fossil fuels (coal, oil and natural gas). Of notable concern is the prominent role given to fossil fuels in their respective power expansion strategy, which could possibly defer investment in RE technologies and at the same time put the countries in an unsustainable and carbon-intensive path. The high initial cost of RE technologies possibly is the biggest barrier to RE development in Kenya and Tanzania, coupled with poor credit and financing mechanisms, ageing and weak electricity transmission and distribution system to take advantage of the geographically diverse RE resources in the countries, and regional mismatch between main demand centres and hydropower sites (especially in Tanzania).

In the other part of the analysis, a reference energy system scenario based on actual 2014 data, which is the most recent year with complete data, was first developed and simulated using EnergyPLAN simulation model for Kenya and Tanzania respectively. Further, three (3) future scenarios – the 2030 BAU scenario, 2030 RE scenario, and finally, the 2050 100% RE scenario – were developed and analysed for each of the countries. The scenario results suggest that with the wider use of RE particularly, solar, wind power and different storage technologies, both nations can achieve increased energy access while at the same time reducing CO2 emissions in a highly cost-effective manner. The results therefore conclude that an energy system based on 100% renewables is not only technically achievable in Kenya and Tanzania, but also competitive in term of cost.

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