Kenya, along with many other countries in Africa, is seeing a surge in captive power production for industry. Many manufacturers see this as a cost-effective solution to the need for reliable power to underpin industrial development. But the impact goes further than a simple – much needed – boost to industry. It reaches into the worlds of policy, economics, environment and development goals.
Kenya’s Big Four Agenda aspires to have the manufacturing sector contribute 15% of GDP by 2022. Yet, Kenya is deindustrialising; its share of GDP is in decline. Our research suggests this is – in part – due to energy not being sufficiently elevated in policy-making at a national level.
Cumulative Captive Solar PV installations are rapidly increasing in Kenya. The latest data available suggests a soaring trend into 2021 and 2022.
The data points not only growing consumption of captive power by industry, but also implies reduced reliance on the grid. In Kenya, industrial entities constitute about 7 for 0 percent of KLPC’s customers (KPLC, 2020).
The outcome of this ‘switch to solar’ poses many questions. Does it preface the much hoped-for green transition for Africa, leapfrogging a fossil fuel-driven industrial revolution? Does it present a risk to ambitions for improving household access through the grid?
At the moment, this is difficult to predict. As noted in the report by Eric Mwangi, Economic Advisor to the Cabinet Secretary of Kenya’s Ministry of Energy, “Captive C&I solar can give the utilities breathing room as they struggle to bring more baseload power on stream. The notion that C&I solar will threaten the viability of the utilities cannot just be taken at face value, you would have to do more dynamic modelling and analysis to understand what that would mean in practical terms for the utilities”.
Find out more about this topic, including case studies on Kenya and Ghana in EnergyNet’s forthcoming report Chain Effect.