Renewable Energy Policy Framework
RENEWABLE ENERGY POLICY FRAMEWORK
The Government of Kenya recognises that Renewable Energy (RE) which include wind, biomass, small hydros, geothermal, biogas, solar and municipal waste energy, have potential to generate income and employment, over and above contributing to the electricity supply and diversification of generation sources. The National Energy Policy 2018 (The Energy Policy) and operationalized by the Energy Act No. 1 of 2019 (The Act) provides for a feed in tariff system that promotes generation of electricity from Renewable Energy sources so as to enhance the country’s electricity supply capacity.
The Energy Policy under section 3.4, 3.7 and 3.8 incorporates strategies to promote the contribution of the RE in generation of electricity and section 3.11.1 of the Energy Policy provides for the feed in tariff system.
Section 75 of the Energy Act 2019 provides for the development and use of renewable energy technologies, including but not limited to solar, biomass and wind and section 91 of the Act provides for the establishment of a renewable energy feed in tariff system 4. Section 7 of the Energy Policy provides for the Government to undertake pre-feasibility and feasibility studies and maintain data with a view to availing the same to developers of energy resources and infrastructure to create investor and consumer awareness on the economic potential offered by other renewable sources of energy.
In view of the time and resources required to undertake feasibility studies, MoE prepared a Position Paper in the Financial Year 2007/08 proposing to set Feed-in-Tariffs (FIT) for electricity generated from RE, specifically for wind, biomass and small hydro.
This was to safeguard the investments made by the respective developers in data collection, undertaking feasibility studies and to boost the development of renewable energy generation.
Feed-In-Tariffs Policy Feed-In-Tariffs Policy
The Feed-in-Tariffs (FIT)Policy is an instrument for promoting generation of electricity from renewable energy sources. FiT allows power producers to sell renewable energy generated electricity to an Off- taker at a pre-determined tariff for a given period of time.
The objectives of the FIT Policy are to:
a) Facilitate resource mobilization by providing investment security and market stability for investors in electricity generation from renewable energy sources;
b) Reduce transaction and administrative costs and delays associated with the conventional procurement processes;
c) Encourage private investors to operate their power plants prudently and efficiently.
d) Encourage local investors to participate in power generation.
The advantages of electricity from renewable energy sources include:
a) Environmental integrity including reduction of greenhouse gas emissions (where feasible, project developers are encouraged to pursue carbon credit benefits);
b) Enhancing energy supply security, reducing the country’s dependence on imported fuels, and coping with the global scarcity of fossil fuels and its attendant price volatility;
c) Enhancing economic competitiveness, job creation and other local economic benefits.
The first FIT Policy was published in March 2008 following approval by the Public Procurement Oversight Authority. The Policy covered wind, small hydro and biomass sources, for plants with capacities not exceeding 50MW, 10MW and 40MW respectively.
The first FiT Policy was published in March 2008 following approval by the Public Procurement Oversight Authority. The Policy covered wind, small hydro and biomass sources, for plants with capacities not exceeding 50MW, 10MW and 40MW respectively. The first revision of the Policy was published in January 2010. It contained revised tariffs for wind and biomass, and introduced tariffs for geothermal, biogas and off-grid solar resources. The Second revision of the policy published in December 2012 was supplemented by a comprehensive study entitled “Technical and Economic Study for Development of Small Scale Grid Renewable Energy in Kenya”. The revised edition included tariffs for grid-tied solar, standardised PPA templates and reduced the lower threshold for biogas plants. This policy regulatory framework sets forth policy anchor for the proposed 40Mw Magarini Solar Park Limited.