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East Africa reform: More than electricity access

The 2019 edition of the Future Energy East Africa conference and exhibition in Nairobi presented an interesting development that sets this year apart from previous years in that attendees are no longer talking about energy in isolation.

This article first appeared in ESI Africa Issue 5-2019.
Read the full digimag here or subscribe to receive a print copy here.

The conference’s keynote addressed was graced by the Permanent Secretary for Ministry of Energy Kenya, Dr Engineer Joseph Njoroge, who remarked that reliable energy is a critical enabler to achieving Kenya’s economic vision by 2030.

The country’s Big Four Agenda is based on the Vision 2030 initiative, which targets universal health care, affordable housing, enhancing manufacturing and food security. All these require energy to prosper in a sustainable way, Njoroge pointed out. Kenya’s electrification efforts currently stand at 74%, and the country is assured of achieving 100% electrification rates by 2022.

The country is also set to undertake aggressive measures in the supply of gas (for cooking purposes) with contribution from biomass resources. “The government has placed favourable policies to ensure universal access to electricity by 2022. Kenya is on the path of an inclusive energy mix, and will include nuclear alongside solar, wind and hydro. Kenya is targeting to generate 20,000MW to meet energy demand, even as it transitions to become a middle-income economy,” said Dr Njoroge.

The event was also graced by Patrick Obath, chairman of the board of Standard Chartered Bank. He stressed the need to unlock energy investments. “By 2040, roughly $80 billion will be needed to reach universal access to energy; this will have to come from the public sector,” said Obath.

The strength of hydropower

Regional case studies on hydropower potential in Africa were covered during the two-day conference. The private sector was encouraged to invest in hydropower, more specifically small hydro, which is quite efficient when the main grid is unstable. Small hydro, which includes so-called mini- and micro-hydro projects on small rivers and creeks, is most often defined as dams with a capacity up to 10MW, although some countries define it as including dams of as much as 25-30MW.

Small hydro dams are often built as run-of-river projects, meaning the flow of the river powers the turbines in the dam to produce electricity without the need to create a reservoir. This can provide cheap, offgrid power, allowing rural areas access to electricity.

In the sub-Saharan Africa region, the technology is not applied widely despite the region reputedly having enormous small hydro power resources. The system can be designed and installed using local resources, materials and labour. This creates job opportunities and the ability to use technology to advance standards of living in the region. Uganda, Tanzania and Rwanda were highlighted as case examples of where this has been implemented successfully. The challenges pointed out include the level of complexity of small hydropower system civil works and thus the investment cost per kW of installed power.

The system investment cost also depends on local economics and government taxes that are imposed on system components as well as on labour services. Therefore, it is important for investors to cushion themselves at the start of operations, as it is impossible to immediately recoup a return on investment.

Conducting feasibility studies on the identified sites to provide required data, both technical and economic, to inform small hydropower designers is also expensive and should be done keenly to ensure success of a project.

Access the Future Energy East Africa conference presentations here!

Commitment to sharing knowledge

The conference supports knowledge sharing through free-to-attend open sessions, which address a number of topics such as exploring the impact of wayleaves and land disputes for utility-scale projects. Land is important for utilities to carry out projects; however, they often encounter challenges threatening the successful implementation of a project.

Contributing to this conversation, Johnson Musyoka, the manager of wayleave administration at Ketraco, highlighted Kenya’s experience indicating that land was an emotive issue. Usually, wayleave acquisition takes about 80% of the total project timeframe. “There are actually a lot of complications during land acquisition. Some land has pending successive issues; crafty individuals also plant trees and crops along the right of way in order to anticipate compensation from utilities,” he said.

Other contributors to the discussion, Charity Wanjiku of Strauss Energy and executive director of the African Utility Technology Council Mlungisi Mkhwanazi stressed the need to make the community feel part and parcel of the projects as a key approach in mitigating the risks involved in land acquisition. Some initiatives could be to give local communities the opportunity to provide manpower for projects, or have them supply local materials to be used in a project.

In terms of revenue cycle management, Eng. Robert Mubiru, the senior engineering consultant at KERAM Enterprises, highlighted best practices for attaining a financially viable electricity sector through the journey of the privatisation of Uganda’s main electricity distribution company. UMEME allowed a number of reforms to take root, and this was followed by a number of gains to be realised for the sector. Some of these reforms – i.e. technological adoption, stakeholder engagement and cost reduction strategy – led to the increase in revenue collection and the number of customers, allowing the utility to sell 3GW of electricity, equating to 1.6 billion Ugandan Shillings.

Watch the Future Energy East Africa interview with Robert Mubiru on ESI Africa TV.

Eng. Eric Wanjala, telecoms commercial business manager Kenya Power, emphasised the necessity for energy utilities to diversify for purposes of creating alternative income streams. He said diversification was necessary due to a number of innovations taking centre stage, i.e. the Internet of Things.

Adding to the conversation, Mkhwanazi underlined that to make energy reform work, regulators need to know their role, taking into consideration the existence of a policy guiding the whole process. While Emily Moder, COO at SteamaCo, stressed that the last mile electricity distribution in East Africa is more than just an energy access challenge.

With such a high level of discussion during the conference sessions and innovation showcased on the exhibition floor, ESI Africa looks forward to the 2020 Future Energy East Africa forum! We invite you to keep the conversation going throughout the year and share your thoughts on the policy, investment and technologies needed to secure an all-inclusive energy mix for the East African region. ESI

Diarise: September 2020 for the next edition of Future Energy East Africa. www.futureenergy-eastafrica.com

This article first appeared in ESI Africa Issue 5-2019.
Read the full digimag here or subscribe to receive a print copy here.

Nicolette Pombo-van Zyl
As the Editor of ESI Africa, my passion is on sustainability and placing African countries on the international stage. I take a keen interest in the trends shaping the power & water utility market along with the projects and local innovations making headline news. Watch my short weekly video on our YouTube channel ESIAfricaTV and speak with me on what has your attention.