AAPG/SPE Africa Energy and Technology Conference

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Diversification of Africa's Energy Portfolio’: Economic Outlook a Case Study of Kenya

Abstract

Despite the global setbacks, in recent times Africa's economy has generally managed to grow, with an average GDP increase of about 5%. Africa's economic growth prospects have been the talking point in recent economic fora. This growth however, has been inhibited due to the insufficient access to reliable electricity for most of Africa. The future outlook for this yet looks set to change dramatically, with African countries diversifying their energy portfolio. A good case in point is in Kenya. As of March 2015, Kenya's effective installed electricity capacity was 2177.1 MW, with supply primarily being sourced from hydroelectric and thermal sources. With connectivity to the national grid at just 28%. As of 8th June 2016, Kenya was the 4th largest geothermal energy developer in the world, possessing the largest geothermal plant in the world, capable of providing almost 20% of the nation's total power capacity (280MW Olkaria plant). Geothermal is just the tip of the iceberg, for years wind energy has contributed just 5.1MW to the national grid, but with the construction of the lake Turkana power project set to come online by July 2017 injecting 310MW or about 18% of current installed electricity generating capacity, a different ball game is about to commence. With Kenya's innovation and IT scene making waves worldwide, the incorporation of this into the energy scene has been quite successful with the M-Kopa model the latest crown jewel. Solar century and London distillers have held engagements to build the largest solar roof project in East Africa, almost 1 MWp. Kenya is currently the world leader in number of solar power systems installed per capita. With the Lamu coal power plant set to add 981.5 MW to the grid and Kenya aiming to replace some fossil fuel, electricity capacity, with nuclear energy (it is currently evaluating its grid system before considering the generation options). These are key stepping stones for an energy boom with an unequivocal industrial and economic boom. Considering the major infrastructural projects of rail, road and pipeline being undertaken with these energy prospects, the future is only brighter. The fact that most of the developed world economies are slowing down only serves to fuel the fact that Kenya and Africa's economic revolution is inevitable. A key indication that the next decades belong to Africa, at least from an economic stand point.