With global efforts to cut greenhouse gas emissions and significant green energy trends expected to shape the future of energy policies, Kenya is poised to evaluate its energy journey and set ambitious goals to position itself as a leader in the global energy transition. As a strategic blueprint designed to support this pursuit, an Energy Sector White Paper was developed through the efforts of the Kenya Ministry of Energy, the Global Energy Alliance for People and Planet, and Dalberg Advisors, with contributions from a dedicated Taskforce and in-country and global subject experts.  

Across the globe, the push to combat climate change is reshaping the landscape of energy production and consumption. As the world races to cut greenhouse gas emissions, several significant trends will shape the future of energy policies: technological advancements, renewable energy adoption, evolving energy regulations, and shifts in consumer behavior. These trends offer a massive opportunity, with the clean energy technology market potentially surpassing $1 trillion annually by 2050. 

In this context, Kenya finds itself at a pivotal juncture to evaluate its energy journey and set ambitious goals to become a leader in the global energy transition. Kenya has a long history of engagement with clean energy, dating back to the establishment of the United Nations Environment Programme’s (UNEP) headquarters in Nairobi in the 1970s.

The energy sector holds the key to Kenya’s economic and social transformation over the next two decades; reforms in the energy sector have contributed to Kenya achieving one of the cleanest electricity grids globally (92% clean), and a well-crafted strategy at this crucial stage can pave the way for accelerated green growth.

The Energy Sector White Paper: A Vision for Transformation

Efforts led by the Kenyan Ministry of Energy, with support from the Ministry of Energy White Paper Taskforce, the Global Energy Alliance for People and Planet, and Dalberg Advisors, focused on the country’s Energy Sector White Paper. They built upon existing economic and energy policies to chart a transformative course towards a clean energy future. This article outlines Kenya’s energy journey, proposes pathways for achieving energy goals, and underscores the critical shifts necessary for systemic change and remarkable sector growth. 

Current Energy Landscape

Over the past two decades, Kenya has made significant strides in its energy transition journey by harnessing various renewable energy sources to improve electricity reliability, capacity, and affordability. Currently, renewables contribute over 92% of Kenya’s generation capacity, a remarkable increase from less than 60% a decade ago. Kenya’s renewable energy sector attracted $1.14 billion in 2018. Noteworthy projects include the Lake Turkana Wind Power, Africa’s largest wind farm, and substantial investments in geothermal and small-scale solar systems. 

Policy initiatives such as Vision 2030 and The Big Four Agenda, along with legislation such as the 2006 and 2019 Energy Acts, have been pivotal in driving these achievements. Sector-specific policies focus on harmonizing the energy sector to address cost and access issues. Enhancing energy market efficiency remains a priority, involving liberalization, devolution, and public-private collaborations.

Obstacles and Hurdles to Kenya’s Energy Goals

Despite considerable progress, Kenya is also faced with critical energy sector challenges, primarily centered around energy equity and security. Energy equity pertains to ensuring affordable, reliable access to energy for domestic and commercial use. High electricity prices in Kenya, surpassing the global average, affect competitiveness and attractiveness to energy-intensive industries. Household electricity usage is limited, with biomass and fossil fuels still being used for cooking needs. Furthermore, remote areas lack access to the national grid owing to unsustainable access costs and subpar service delivery, discouraging power sector customers. 

Meanwhile, energy security pertains to meeting current and future energy demand. Kenya’s heavy dependence on imported fossil fuels for critical sectors makes it vulnerable to geopolitical tensions and commodity price fluctuations. Over 60% of households still rely on biomass for cooking, slowing the adoption of clean cooking technologies. Low productive energy use is leading to an imbalance between energy demand and supply, with Kenya’s per capita power consumption falling far below that of its regional and global peers.

Turning Global Energy Trends into Opportunities

Several trends are poised to drive future energy demand, promoting the shift to greener, more sustainable economies.

Achieving net-zero emissions by 2050 may necessitate an investment of $125 trillion, with a substantial portion directed toward clean energy projects. Industries under pressure to decarbonize face challenges, such as decommissioning thermal plants and developing new renewable energy sources.

Kenya is well-positioned to lead the global energy transition, capitalizing on its energy journey to attract significant investments in generation capacity and productive green energy use. The country’s rich renewable resources, coupled with its favorable business environment, is attracting private sector investment in sub-Saharan Africa. The emerging technology and innovation hub, known as the Silicon Savannah, is driving financial, communication, and transportation services. The Kenyan government is committed to energy sector development and its long-term strategy for global net-zero positions the country as a major driver of global decarbonization.

The Energy Sector White Paper: A Vision for National Development (2022-2040) 

Reimagining Kenya’s energy trajectory and establishing a distinct approach to managing its energy ecosystem can deliver critical services to its people and stimulate economic growth. At the heart of the Energy Sector White Paper are four bold outcomes aimed at positioning Kenya as a global leader in green energy while ensuring energy availability for productivity: 

1. Energy as a transformative public good: Kenya aims to provide clean, affordable, and modern energy to all Kenyans, fostering inclusive participation and improving livelihoods. This includes achieving 100% electricity access by 2030, halving household electricity bills by 2040, increasing per capita consumption to match upper middle-income economies by 2040, and ensuring micro and small enterprises have 100% access. 
2. Decarbonized economic growth: Promoting efficient clean energy use at industrial and household levels. This involves prioritizing low-carbon electricity, implementing smart power grids, eliminating reliance on backup generators, reducing unsustainable household biomass use by 50% by 2040, decarbonizing high carbon-emitting sectors, and leveraging green energy for competitive advantages. 
3. Green Energy Leadership: This plan involves increasing capacity generation to 100 GW by 2040, attracting over $300 billion in green energy investments, and diversifying funding sources through innovative green financing. This positions Kenya as a Regional Green Pioneer, attracting domestic funds for local projects.  
4. Preferred investment destination: Kenya seeks to attract energy-intensive industries by improving the business environment, stimulating demand from traditional sectors, capitalizing on regional power pools, and fostering a 24-hour economy.

Kenya’s energy sector is on the verge of undergoing a substantial transformation. By recommending measures such as increasing installed capacity from 1.6 GW to nearly 3 GW between 2012 and 2022, the White Paper envisions a leap to 100 GW by 2040, necessitating a yearly average of more than 5 GW. At the recent inaugural Africa Climate Summit, the President of Kenya, committed to 100% clean energy access and 100 GW clean grid by 2040 anchored on a green industrialization agenda.

The soon-to-be-published White Paper presents a transformative agenda to accelerate Kenya’s transition to a low-carbon economy while ensuring a reliable and affordable power supply. Furthermore, building on previous policies, strategies, and laws, it aims to drive substantial progress by taking ambitious leaps into the future of the energy sector for Kenya and the world. 

To know more, contact Fridah Kiboori and Devang Vussonji.

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• Catalyzing Africa’s Climate Potential