Boston, MA -- (SBWIRE) -- 02/25/2014 -- Kenya's power sector is set to change dramatically over the forecast period to 2023, with hydropower to lose its dominant share of the power mix to non-hydro renewables and coal. The government aims to generate half its power via solar by 2016; while we believe this is a wildly ambitious figure, solar's share of the power mix will, nevertheless, increase dramatically. A slew of coal-fired facilities are due to come online in 2015, diversifying Kenya's energy mix away from hydropower, with the country's reliance on the latter leaving it susceptible to droughts.
BMI forecasts healthy generation and consumption growth over the forecast period, with both due to average 8.5% growth per annum over 2014-2023. Currently, the bulk of consumption comes from industry; however, over the forecast period, households will increase their electricity usage and are due to hold the majority share by end-2023, thanks to a rapidly expanding population.
Kenya has a healthy project pipeline, with a number of energy sources catered for, supported by average real GDP growth of almost 6% per annum over 2014-2023. However, projects regularly experience delays and corruption plagues many areas of the economy, adding downside risks to our outlook.
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- In January 2014, it was reported that Kenya's government aims to supply half the country's energy through solar power and has identified nine sites where it could develop solar farms. The plan would involve investment of US$1.2bn, with the government to provide 50% of the cost. Kenya ranks 22nd in Africa for the amount of electricity it generates, and 46th in the world in terms of solar generation; however, if the country's plans are realised, it could rank third for solar by 2018, according to figures from the Energy Regulatory Commission.
- In January 2014, it was reported that Kenya Power is planning to invest KES51bn (US$600mn) in the strengthening of Kenya's electricity distribution networks in the next three years, in order to support heavy industrial and commercial use. The utility is working on projects that will ensure the provision of dedicated power supply lines to industrial and commercial centres with adequate redundancy, to provide continuous supply during periods of system maintenance. By August 2014, 280 megawatts (MW) from competitively priced geothermal power would be injected into the grid. Kenya aims to have a capacity of 5,000MW by the year 2030.
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