Kenya seeks to boost power supply, transmission
Oct 04, 2011
NAIROBI - Kenya plans to float a tender by early next year to build a liquefied natural gas terminal at its Mombasa port as it pushes to diversify its sources of electricity to meet rising demand, a senior energy official said on Tuesday.
NAIROBI - Kenya plans to float a tender by early next year to build a liquefied natural gas terminal at its Mombasa port as it pushes to diversify its sources of electricity to meet rising demand, a senior energy official said on Tuesday.
Chronic power blackouts and higher electricity bills in Kenya are fuelling discontent as they push up living costs and cast doubts on the government's ability to fully implement its long-term economic vision.
"We have decided to diversify our primary sources of power generation through construction of a liquefied natural gas import handling, storage and regasification facility at Dongo Kundu, Mombasa," the energy ministry's permanent secretary, Patrick Nyoike, told a national energy conference.
"The tender is expected to be floated by February 2012."
President Mwai Kibaki said development in the sector was being hampered by the difficulties power firms, especially those in the private sector, face in accessing funds from international institutions.
"Towards this end, I direct the Ministries of Finance and Energy to prepare comprehensive policy recommendations on access to long-term capital from local pension funds, banks and development finance institutions for power generation by the private sector," Kibaki said.
The government says it has installed power supply capacity of 1,460 MW, against a consumption of about 1,300 MW, leading to shortfalls when factors such as reserve margins are included.
Kenya aims to raise this to over 21,000 MW by 2030 by developing a mix of plants powered by hydro, wind, geothermal, coal and nuclear.
Energy Minister Kiraitu Murungi said three diesel-powered thermal plants with a combined capacity of 252 MW at a cost of $252 million would be operational by next June, and another plant with an 80 MW capacity would be online a year later.
SECTOR HAMPERS ECONOMIC GROWTH
Three hydroelectric power projects worth $198 million and with a combined capacity of 73 MW were under construction and due to come on the grid between now and 2013, Murungi said.
Geothermal projects worth $1.71 billion with a 404.5 MW capacity would be ready by 2014. Another 384 MW of electricity from wind power projects would be available in 2013.
Regional trade bloc, East African Community, is pushing its five member states to link up energy resources in an effort to boost the region's energy security.
Thanks to major gas discoveries in Tanzania's deep-water offshore region, Kenya's southern neighbour has managed to raise its natural gas reserves to more than 10 trillion cubic feet (tcf) from a previous estimate of 7.5 tcf.
A recent EAC study shows that a pipeline to move natural gas from Dar es Salaam to the Kenyan port city of Mombasa would cost up to $630 million.
Poor and inadequate transmission lines have also been hampering power supply. Murungi said state-run Kenya Transmission Company planned to build 2,658 km of transmission lines with substations by 2013, at a cost of $992.39 million.
Despite the Kenyan government's big ambitions, market observers complained the sector was not keeping up with economic growth in east Africa's largest economy.
"The energy sector, with all its plans, which we appreciate, is really struggling to keep pace with economic growth," Betty Maina, CEO of umbrella group Kenya Association of Manufacturers, told the conference.
"The current prices we are facing and what we have seen prevailing for the last five years isn't conducive to new investors."