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Saturday, 22 February 2014

Kenya - Demand vs supply a delicate balance for energy planners

Up in his 21st Floor Nyayo House office, Energy secretary Davis Chirchir speaks passionately about his 40-month plan to bring to an end Kenya’s perennial energy crisis.
With neatly drawn chats on the wall showing project timelines, Mr Chirchir sees his ministry as pivotal to improving Kenya’s business environment by making it a low-cost energy economy.
“Our plan is to reduce the cost of power to an average of 6 US cents per unit consumed through diversification and efficient supply,” he said.
But power economists have faulted his demand projections, saying it was prepared ‘haphazardly by several players pushing sectarian interests’.
“It is based on false load growth assumptions and unrealistic target dates,” says Hindpal S. Jabbal, the lead author of a the new report on Kenya’s power sector, citing the many instances where demand has been overstated.
Mr Chirchir’s power sector investment plan has, for instance, allocated 1,171MW to the standard gauge railway but independent studies show that the Kenya-Uganda electric train can only consume 100MW factoring in maximum passenger and cargo trips.
A separate document authored by the Ministry of Energy and seen by Business Daily puts the energy needs for the standard gauge railway (Mombasa- Nairobi-Malaba, Kisumu) at 18MW.
This puts to question the Jubilee government’s ‘5000+MW’ plan that is aimed at ‘transforming Kenya into a least cost economy with adequate capacity at a competitive tariff.’
The government has also set aside 675MW for Konza Technopolis and other ICT parks, which is four and a half times more than 150MW projected by independent studies.
An iron and steel melting industry to be constructed in Meru by 2015 is expected to consume 315MW over a period of seven years based on an average production of 13.5 million tonnes, a brief from the Energy ministry says.
The project is yet to take off but Mr Chirchir has marked 2,000MW to the iron and steel melting factory.
The Lapsset project, whose ground-breaking was done in March 2012 but has since seen little activity, is allocated 350MW but against independent projections that it would absorb no more than 100MW.
The Lamu port has 32 berths and each terminal is estimated to consume 4MW translating to 128MW upon completion in 2030.
Further, due to the waxy nature of the crude oil in South Sudan, Kenya and Uganda, a heated pipeline will be necessary to transport the crude oil from the fields to the Lamu port for export or to a refinery, creating additional demand for electricity.
Special economic zones, due to replace the current Export Processing Zones (EPZ) in 2015, are forecast to require about 50MW to power the industries to be located in these parks.
By David Herbling