How Energy Storage Plays a Role in Kenya's Long-Term Electricity Goals

To date, distributed energy resources (DER) in Africa have been somewhat of a pipedream. Ironically, DER and energy storage stand to see the largest growth over the next 10 years in emerging markets—like those in Africa. This is primarily due to the lack of reliable, networked power across the continent. This has contributed to energy poverty running rampant throughout Africa. The International Association of Energy Economics defines energy poverty as the lack of adequate modern energy for the basic needs of cooking, warmth, lighting, and essential energy services for manufacturing, services, schools, hospitals, and income generation.

Energy poverty is a major problem across the continent, to the extent that a reported +640 million Africans (representing approximately two-thirds of the African population) do not have access to reliable power. Further, the African Development Bank calculates that brownouts and blackouts contribute to about 4% of the entire continent’s annual GDP. As cities continue to grow, particularly in Africa (around an 8% increase per year), energy poverty is increasingly becoming a matter of national security.

Kenya seeks to become a regional leader in DER with the country’s recent announcement of its plan to provide electricity to all of its citizens by 2022. The government and The World Bank launched the Kenya National Electrification Strategy (KNES), which uses software to identify low cost options for bringing electricity to the commercial and residential markets. The data will assist policymakers in making decisions regarding new grid and off-grid DER investments. The KNES also highlights the role that the private sector will need to play in integrating remote power solutions in smaller microgrids throughout the country.

Kenya Is Ambitions, but Well-Equipped

Though the plan is ambitious, Kenya is well-equipped with renewable resources that could help achieve its electrification goal. Approximately 85% of the country’s energy consumption comes from geothermal and hydropower resources. Wind and solar are on the rise in the country. Chinese solar PV module manufacturer JinkoSolar recently announced that it has supplied 55.7 MW of solar PV modules to the Garissa Solar Power plant in Kenya. 

Energy storage will play a critical role to ensure that Kenya has safe, reliable power across the country. Guidehouse Insights expects that off-grid systems carry the largest market opportunity in Kenya primarily driven by village electrification efforts. Many of these systems will be relatively small (from 10 kW residential systems to 300 kW commercial systems), and they will allow homeowners and businesses to take charge of their own energy needs. 

Guidehouse Insights expects that nanogrids could help spur the KNES. Nanogrids are easier to implement than remote systems in many ways. Consequently, many nongovernmental organizations and institutional sources of funding are interested in funding rural electrification via renewable energy nanogrids. Introducing energy access in a modular way helps build economic activity through increased usage of lights, cell phones, and laptops, all of which lead to more transactions and greater information exchange. This, in turn, creates demand for and capacity to incorporate a diverse suite of energy solutions.

Flexible Market Entry Strategy and a Compelling Business Case a Must

For energy storage players, the key to entering the Kenyan energy market is to focus on lowering costs for integrated storage solutions. In other words, these vendors must be able to develop a flexible market entry strategy and to make a compelling business case—even if diesel prices should decrease. As several countries with similar energy woes are poised to announce similar plans in the coming years, it will be important for storage players across the value chain to adjust to specific customer and grid needs.