In a bold move, Kenya is now seriously considering the promotion of captive power projects, which could significantly reshape the country’s energy landscape. This isn’t just about big industries setting up their own power plants; it’s about fostering economic growth, attracting investments, and empowering consumers. Let’s unpack the implications and the necessary steps to make this work.
Firstly, let’s understand the potential. Kenya has a wealth of renewable energy resources—solar, wind, geothermal, and small hydropower. By allowing consumers to generate their own power, either on their own premises or through agreements with generators, Kenya can attract more foreign direct investment. These captive power consumers, ranging from shopping malls to industries and special economic zones (SEZs), can become hubs of manufacturing and service, driving local and national economic growth.
The easiest route is to have generation and consumption co-located. SEZs targeted at areas with abundant renewable resources could be a game-changer. Imagine a zone powered primarily by wind or geothermal energy, with infrastructure like roads, water access, and security in place. These hubs could reduce the immediate need for extensive power transmission and distribution, while building a base for future expansion. This model mirrors the mini-grid approach used in off-grid areas, bringing power to where it’s needed most.
However, the real challenge and opportunity lie in enabling power wheeling—transferring electricity from a distant source to consumers through the grid. This is where things get complex, but also where significant market reforms are needed.
To make wheeling work, Kenya must ensure consumers get the best value for their money and have choices in their electricity sources. This requires steadily moving towards an open wholesale market, where consumers can source power captively, from the utility, through wheeling, or even from neighboring countries. The consumer must be the focus of the electricity market, with options that ensure the best service quality.
Transmission infrastructure is another critical piece of the puzzle. The private sector’s interest in transmission, seen in recent PPP proposals, is a positive step. Transparent and competitive procurement processes, like those handled by KETRACO, will attract more investments. But with increased private involvement comes the need for clear procedures on transmission line access—a key to controlling market power and facilitating trade.
Grid stability and availability are also crucial for wheeling power. With the rise of renewable sources, grids need infrastructure like energy storage systems and reactive compensation devices to maintain voltage, frequency, and supply availability. This ensures the grid can withstand shocks and maintain service quality.
It’s essential to understand that promoting captive power doesn’t mean stifling traditional supply methods. It’s not a zero-sum game. Instead, it’s about providing diverse options to meet the complex needs of Kenya’s target consumers. Every additional option for consumers brings Kenya one step closer to its economic goals.
As these developments unfold, key players like George Aluru, CEO of the Electricity Sector Association of Kenya (ESAK), will be instrumental in driving the conversation forward. The upcoming ESAK C&I Conference & Exhibition 2025 is a prime opportunity to delve into these issues and shape the future of Kenya’s energy market.
This news could spark a trend across Africa, with countries looking to replicate Kenya’s model. It also poses questions for market operators: How will they adapt to these changes? How will increased consumer choice and market liberalization influence pricing and competition? And crucially, how will this shape the development of renewable energy projects and supporting infrastructure?
One thing is clear: Kenya is taking a significant step towards a more diverse, consumer-focused energy market. The ripple effects of this move will be felt across the sector, from power generation to transmission and distribution. It’s an exciting time for Kenya’s energy landscape, and a story that energy journalists will be closely watching and debating.
