Tuesday, 5 June 2018

Lamu: Gearing to be energy hub in Kenya?

 Lamu city and county are set to become the energy capital of Kenya. With a Port with oil export jetties, a 120,000bpd refinery, two power generators pumping 1150MW into the national grid, the County, and the port city are set for greater things in future. Other things remaining the same, Lamu could in future become the Qatar of Kenya, if not East Africa.
The city will be the destination Port for exports leaving or entering East Africa’s landlocked Northern members- Ethiopia and South Sudan, according to LAPPSET and Vision 2030 goals. Even without the neighbours, it is the gateway for Kenya’s oil exports. And with a refinery to boot, it could soon become a major white oils market.
 Lamu, Isiolo, and Turkana were conceived as “resort cities” in the Vision 2030 package and also the LAPSSET program. Resort cities are mainly tourist attraction sites. However, they have metamorphosed into energy cities due to developments in the energy sector. 
The growth of the energy sector is also expected to support the tourism sector for which the resort cities were designed.
 Two energy generation plants are slated for construction in Lamu. The two are a 100 MW wind power project and a Coal-fired plant which is expected to generate 1050 MW.  The two will add some 1150 MW into the national grid, arguably the largest input from any County in the country so far.
Both projects have faced tumult in the past two years with residents protesting the construction of the Coal-fired plant while the wind power project faced legal hurdles.

The US$ 2.0 billion AMU power firm is yet to get approvals from the Environmental tribunal to get going. However, the entry of GE in the coal plant with its clean coal technology could change things.
An Oil Pipeline
GE entered the deal with the Project promoters, AMU Power to design, construct and maintain the power plant. In the US$500 million deal, GE will bring a cleaner and efficient coal-burning technology, that has excited the local promoters who say they are now good to go.

“Our partnership with GE brings the latest technology in coal power generation that has the highest efficiency ever and has the best in environmental protection. This plant will yield its objective and help us drive down the cost generation in the country,” Amu’s MD, Mr. Francis Njogu, was quoted by the local press as saying.
 GE will also take-up some undisclosed stake in AMU Power apart from doing the actual works.
AMU has a power purchase agreement with the local power distributor, KPLC to sale energy at a fixed tariff of US$0.071 per KWh. This is probably the lowest price for energy in Kenya today.

Also weathering the storm in Lamu energy sector is Kenwind, a wind power project which had stalled due to legal suits.  The Courts have paved the way for it to start by dismissing a legal suit that stalled the project.
Kenwind will generate 100MW in their $210 million wind farm based in Mpeketoni. Kenwind, is the second largest investment in Kenya’s energy sector same as is Kipeto wind power in Kajiado County that will also produce 100MW. The largest is the US$675 million Turkana wind power based in Marsabit County. It will produce 310MW of power and is expected to come on stream in September this year.
A Geothermal Plant
The two firms, if they came to fruition in addition to other on-going green energy projects, will help bring the cost of electricity down by nearly 50 percent as they will decommission expensive diesel-powered generators.
Their combined capacity of 1150 MW will put Lamu ahead of any other power hub in Kenya, although geothermal power will eventually overtake it. Kenya has a potential to produce 10GW of geothermal energy. She is also said to have a potential to generate 3 GW from the wind. With only 0.4 GW down, there’s room for more.

Geothermal development is long and expensive. So far, only 700MW of geothermal power is on the national grid meaning that Kenya, which targets to generate up to 5GW by 2030, has to make do with cheaper and faster alternatives such as wind and Coal to power its development goals. Wind power and solar energy are the best bet. A number of other wind projects and some solar powered farms are in the pipeline elsewhere in the country. 

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