light bulbs compare energy systems

The forthcoming East African Power Industry Convention (EAPIC) has promised to deliver strategic thought leadership for power utility stakeholders across the east African value chain. As the host publication, ESI Africa gained expert insight into East Africa and where the energy sector is likely to be in the next year.

Q – With a sustainable mindset at the forefront of many industry leaders, is East Africa developing its clean power resources, and what is the commercial viability around these?

A – Lucy Electric, Platinum Sponsor

They [clean power resources] are viable provided there is backing by legislation e.g. in building constructions and attractive funds from financial sector for the changeover of equipment in manufacturing companies and installation of equipment e.g. solar systems and green building design and construction. Many entry level solutions have gained a market in Kenya such as solar lanterns and solar panels for lighting. Mini-grids is an area to look at. Clean Cooking is an area that needs considerable investment to displace firewood – see the SE4ALL Kenya Action Agenda. From the production of cook stoves to communication campaigns. Firewood is used for cooking, lighting and heating the house in cold areas. An alternative to firewood for house heating may need to be identified if firewood is to be displace.

A – Professor Izael Pereira Da Silva, Renewable Energy specialist, EAPIC advisory board member

Obviously geothermal potential is there and there is a strong interest by KenGen in having this potential explored further. Some donors have come up with a support to do risk mitigation mainly on the expensive phase of digging wells. There is an idea of creating an industrial park in Naivasha to be able to have direct use of geothermal power (electricity and heat). This is a very exciting idea with huge commercial opportunities.

A – Benjamin Mugisha, Resident Underwriter African Trade Insurance Agency (ATI), EAPIC speaker

Yes – We have seen a move towards renewable energy – when you consider East Africa’s energy resources, clean power will be a significant component of the mix. The projects are commercially viable, but small medium sized projects need to be supported at the same level as we see for the larger projects (whether it’s through bankable power purchase agreements or through risk mitigation tools typically available for larger projects).

A – Sam Slaughter, Powergen, EAPIC speaker

  • Geothermal is slow but has high potential
  • Hydro contributes the majority of Kenya’s power, but remains susceptible to drought
  • Solar accounts for a few hundred MW of pipeline now, but government is now slowing down interest
  • Wind, the Turkana project is happening, but other projects have died

Q – What political developments have recently occurred that have an effect on doing business in the east African region?

A – Sam Slaughter, Powergen, EAPIC speaker

  • New Energy Bill being discussed in Kenya
  • Permits being given to private micro-grid developers

A – Professor Izael Pereira Da Silva, Renewable Energy specialist, EAPIC advisory board member

Certainly the Energy Bill 2016 will have a huge impact on the way business is conducted in Kenya. One example is the introduction of the NET METERING concept, which has attracted quite a bit of private sector funds in other countries and has no reason for failing to do so here.

A – Wim Jonker Klunne, ‎Programme Director: Energy & Environment Partnership Programme (EEP), EAPIC speaker

From EEP we are proud to mention that one of our projects in Rwanda has been instrumental in getting policy in place on VAT exemption for biomass fuel pellets, improved cookstoves (ISO-IWA Tier 2-4), equipment and parts to produce biomass fuel pellets and equipment for the supply of biomass gasification energy.

We hope other countries will follow…

Q – Can you elaborate on the key challenges that the sector is currently experiencing, and what solutions are being discussed/implemented?

A – Benjamin Mugisha, Resident Underwriter African Trade Insurance Agency (ATI), EAPIC speaker

Bankability: Despite significant efforts to mobilise private capital for renewable energy in sub-Saharan Africa in recent years, the number of operating IPPs in this region (excluding South Africa) remains low. There are several small- to medium-sized projects under development and risk mitigation tools are required to make these projects bankable. Government guarantees are not always readily available so there is a need to have responsive risk mitigation tools. ATI is actively developing risk mitigation tools to support IPPs whether its with regard to short term liquidity or off-taker termination risk.

A – Wim Jonker Klunne, ‎Programme Director: Energy & Environment Partnership Programme (EEP), EAPIC speaker

One of the key challenges are identifying the best business model for your energy business, creating a level playing field for renewables and finding support for the very early stages of your business. (EEP is providing assistance in all three, but primarily in early stage business support).

A – Professor Izael Pereira Da Silva, Renewable Energy specialist, EAPIC advisory board member

The challenges are illegal connections, vandalism and consistent load shedding. Some solutions may include: increase of installation capacity mainly from geothermal. Another wind of opportunity is the wider adoption of pre-paid metering and the starting of grid tie solar installation being supported by donor funds and also by investors from Europe and America.

Though we have not yet seen much of the impact, the commitment by the American Government to support the SE4All is certainly a hope for the sector.

Q – With various African countries undergoing extensive meter rollouts, and looking to become ‘smart’, in your opinion, how is East Africa ranking in terms of this?

A – Professor Izael Pereira Da Silva, Renewable Energy specialist, EAPIC advisory board member

Kenya Power is moving – They have recently acquired funds to support grid extensions resulting in a shift from 25% to almost 60% in less than two years. Our hope is that Kenya Power start looking into hybrid solar/diesel in an institutional manner and adopt smart grid technology to cut losses and increase revenue.

A – Sam Slaughter, Powergen, EAPIC speaker

  • Private sector micro-grids are using smart meters
  • Public utilities are using prepaid meters, NOT smart meters

The EAPIC conference and exhibiton is expected to gather more than 2,000 visitors from more than 30 countries, including from the region’s leading power utilities, large industries, project developers and investors as well as dozens of technology and service providers who will showcase their products at the KICC in Nairobi from 21-22 September.

Visit the ESI Africa media booth at EAPIC (booth #511)

 

EAPIC 700X80