Low Carbon Logic: How southern businesses are saving money by going green.

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2 Low Carbon Logic: How southern businesses are saving money by going green. Challenges & Solutions in Kenya Murefu Barasa Camco 17 th July 2013

3 3 Energy

4 Outline 1. Overview of the energy sector in Kenya 2. Energy and carbon markets in Kenya 3. Opportunities/risks in a carbon constrained future 4

5 Overview of the energy sector in Kenya Sources of Energy Hydro Power, 6% Geothermal, Wind & Solar, 1% Oil, 16% Coal/Peat, 1% Translates to between 3.9 million tonnes per year to increase to 10 million tonnes by 2030 (NOCK, 2011) Biomass & wastes, 77% Translates to between million tonnes per year (MoE, 2002) 5

6 Overview of the energy sector in Kenya Biomass Dominance (30 year trend) Source: World Bank Online Database 6

7 ENERGY USE (kg of oil eq. per capita) 2000 Overview of the energy sector in Kenya Energy Use (Kg of Oil Equivalent) World Sub-Saharan Africa Kenya YEAR Source: IEA Online Database

8 8 Overview of the energy sector in Kenya Current Electricity Sources

9 9 Overview of the energy sector in Kenya Pipeline Projects Developer Project Type Capacity (MW) Estimated Commissioning Date KenGen Geothermal Well Head Units Geothermal 70 Jun-11 Tana Development Hydro 20 Oct-10 Kipevu Thermal Plant Diesel 120 Jan-11 Eburu 2.5 MW Geothermal 2.5 Dec-11 Sangoro Hydro 21 Oct-11 Ngong 3 Wind Wind 15 Jul-12 Kindaruma 3rd Unit Hydro 25 Oct-12 Olkaria IV Geothermal 140 Jan-13 Olkaria 1 Units IV and V Geothermal 140 Jan-13 KenGen/ IPP Mombasa Coal Coal Jul-13 Athi River MSD Plant (Triumph) Diesel 81 Mar-12 IPP Athi River MSD Plant (Gulf) Diesel 84 Mar-12 Thika MSD Plant (Melec) Diesel 87 Mar-12 ARM Coal (Mombasa) Coal 20 Jul-12 Lake Turkana Wind 300 Jul-13 Osiwo Wind Wind 50 Jul-13 Aeolus - Kinangop & Ngong Wind 160 Jul-13 OrPower4 (Olkaria III) Geothermal 52 Jan-14 Small Hydros Hydro IMPORT Ethiopia Hydro 200 Jul-14 Total 1,913-2,213

10 Overview of the energy sector in Kenya Electricity Prices Source: KPLC Statistics

11 Energy and Carbon Markets List of CDM Projects Registered PROJECT TITLE (AS AT16/JULY/2013) DATE SPONSOR/DEVELOPER tco2/year 1. Bagasse Cogeneration 03/09/2008 Mumias Sugar Company 129, Olkaria III Phase 2 Geothermal Expansion 04/03/2010 Ormat 177, Olkaria II Geothermal Expansion Project 04/12/2010 Kengen 149, Lake Turkana Wind 28/02/2011 Lake Turkana Wind 736,615 Consortium 5. Aberdare Range-Mt Kenya Reforestation: 11/07/2011 Green Belt Movement Kipipiri 8, Aberdare Range-Mt Kenya Reforestation: 05/10/2011 Green Belt Movement Kirimara 8, Redevelopment of Tana Hydro Power 11/10/2011 Kengen Station 25, Karan Biofuel CDM project Bioresidues briquettes supply for industrial steam production 25/09/12 Karan Biofuel Limited 43, Ol Karia IV Geothemal 28/12/2013 Kengen 651, Ol Karia I Unit 4&5 28/12/2013 Kengen 635,049 11

12 Energy and Carbon Markets Policy and Market Changes EU ETS Energy and Climate Directive of 2009 states that no CERS from non-ldc countries registered after 31 st Dec 2012 will be accepted Uncertainty in international legal frameworks, Euro crisis and an oversupply of carbon assets led to the decline in prices 12

13 Energy and Carbon Markets Policy and Market Changes 13 Source: World Bank 2013

14 Opportunities/Risks in the Energy Sector Summary of Risks & Opportunities 1. Past dependency on biomass energy sources (-ve) 2. Dependence on climate sensitive energy sources (-ve) 3. Geothermal development (+ ve) 4. Greater participation of the private sector (+ ve) 5. Regional networks and pooling initiatives (+ ve) 6. Prospects of fossil fuels: Oil in Turkana, gas off the coast and coal in Kitui (=) 14

15 Opportunities/Risks in the Energy Sector Proposed Sectoral Interventions 1. Updating and use statistics for planning and monitoring 2. Mainstream bioenergy sources (Awareness, sustainability, R&D) 3. Regional power pool 4. Diversify the energy generation base 5. Encouraging private sector participation: Net metering, energy banking, FIT policies, mini/micro-grid solutions 15

16 ODI is the UK s leading independent think tank on international development and humanitarian issues. We aim to inspire and inform policy and practice to reduce poverty by locking together high-quality applied research and practical policy advice. The views presented here are those of the speaker, and do not necessarily represent the views of ODI or our partners. Overseas Development Institute 203 Blackfriars Road, London, SE1 8NJ T: Initial.surname@odi.org.uk

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