Kenya Power, a utility firm that owns and operates the majority of the electricity transmission and distribution lines in the country, and sells electricity to about 4.8 million customers, signed on June 5 power purchase agreements (PPAs) for four new solar PV plants of 40 MW capacity each.
pv magazine reported that the PPAs follow the feed-in tariff (FIT) law, providing the four PV projects a tariff of $0.12 per kWh.
This is indeed the source of the controversy. The feed-in tariff law was initially introduced in 2008 and was updated last in 2012. So, the PPAs signed this month are based on a five-year-old tariff price. The government was supposed to update the FITs in 2015, but it didn't do so.
The four developers that have been awarded the PV projects are Eldosol, Radiant, Alten and Malindi Solar.
Not everyone is happy with the new PPAs. The Consumers Federation of Kenya (Cofek), which defines itself as “Kenya’s independent, self-funded, multi-sectorial, non-political and apex non-profit Federation committed to consumer protection,” and has over 115,000 followers in Twitter has accused the government of corruption.
The four PV projects, Cofek argues, come at a very high feed-in tariff and “the cost of energy is set to go even higher after the Energy Regulatory Commission (ERC) approved unsolicited independent solar power producers to politically correct individuals in government.” In other words, Cofek suggests that the PV projects were given to close allies of the government. Cofek's full view can be found via this link.
It is true that other parts of the developing world, including African states, have seen PV tenders that led to project FITs significantly lower than Kenya's US$0.12/kWh.
Zambia for example, tendered two projects totalling 73 MW of solar PV capacity in 2016 for as little as US$0.0602 per KWh and US$0.0784 per KWh respectively.
Morocco too signed a 20-year PPA with Acwa Power last year for the development of 170 MW of solar PV plants at a rate of €0.0422 per kWh.
The Kenyan case reminds us of the recent Africa Energy Forum's debate on whether competitive tenders or directly negotiated deals are the preferred tool for developing Africa's solar potential.
Kenya is also considering introducing tenders for new solar power projects. Given the country's electricity retailers sell electricity to consumers at tariffs that reflect the real cost of electricity generation and transportation, such tenders could attract very competitive FITs.
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: firstname.lastname@example.org.
we are interested in collaborating for utility scale solar projects in West Africa as the FIT tariffs are attractive for new projects. Plse reach us at email@example.com
with the capacity to do 45mw solar plat I have land in a one of ASAL equal to 50 acres also I have an investor on stand by as soon we get PPA
By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.
Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.
You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.
Further information on data privacy can be found in our Data Protection Policy.