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TECHNICAL ASSISTANCE - SMALL HYDRO

DEVELOPMENT IN KENYA
Andrew Njoba
Team Leader, Clean Energy Promotion
KENYA ASSOCIATION OF
MANUFACTURERS
KENYA
Agenda

1 About KAM / DFID Clean Energy Promotion Program

2 DFID Program Activities

3 Why Climate Change Mitigation?

4 Policy The Driver for Clean Energy Investment


THE KAM TECHNICAL ASSISTANCE PROGRAM
TECHNICAL ASSISTANCE PROGRAM
Ready Project Pipeline:

Began in 2012
Assisted 100+ Projects in East
240MW
Africa Generating
1,170 GWh of
Project Pipeline includes: electricity each
year
Installed capacity of 240MW
Total Capex of $570 Million

460,000
# of Kenyan Homes
Powered
Per Year
CLEAN ENERGY PROMOTION - OBJECTIVES

Objectives:
Catalyze Private-sector Investment
Improve Policy Framework
Reduce CO2 Emissions
Job Creation

Specific Activities:
1.) Feasibility Studies
2.) Awareness Creation
3.) County Govertment Legislation Support
4.) Capacity Building
FEASIBILITY STUDIES SUPPORT

PROJECT DEVELOPMENT PROCESS

Pre-Development Phase

Develop
Procurement
Detailed
Feasibility Study Strategy
Engineering
Establish Develop Front End Establish Develop Spec Commercial
Concept Study Commercial Project Construction
Business Business Engineering and Tender
Management Operation
Pre-Feasibility Design Arrangements Implementation
Need Case Tender
Commissioning and
(FEED) Selection and
Acceptance
Award
Financial Close

KAM Support

Technologies Supported:
Small Hydros
Solar PV
Waste-to-Energy
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Source: Ministry of Energy
POLICY DRIVER FOR CLEAN ENERGY
INVESTMENTS

8
POLICY DRIVING INVESTMENT
POLICY DRIVING INVESTMENT
POLICY DRIVING INVESTMENT
RENEWABLE ENERGY POLICY DEVELOPMENT

2000
Market-based mechanisms eg renewable energy auctions, certificate schemes, renewable
portfolio standards
Feed-in tariff/premiums
Mixed
Countries with auction or tender programmes
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POLICY DRIVING INVESTMENT
RENEWABLE ENERGY POLICY DEVELOPMENT

2016
Market-based mechanisms eg, Auctions, Certs, Portfolio standards
Feed-in tariff/premiums
Mixed
Countries with auction or tender programmes
Kenya FIT - 2008
BNEF Summit, New York, 5 April 7
2016
POLICY DRIVING INVESTMENT
CLEAN ENERGY INVESTMENT ROSE WHILE OIL PLUMMETED

GLOBAL CLEAN ENERGY INVESTMENT VS WTI CRUDE SPOT 2004-15


Record
investment

$146/bbl $329bn
$318bn $316bn
$297bn
$274bn $272bn

$206bn $207bn
$175bn

$128bn

$88bn
$62bn $37/bbl

2004 2005 2006 2007 2008 2009 2012 2013 2014 2015
2010 2011

Source: Bloomberg BNEF Summit, New York, 5 April 1


2016
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POLICY DRIVING INVESTMENT

15
16
Date - Q4, 2014
POLICY DRIVING
Kenya FIT INVESTMENT
- Project Pipeline (Dec15)
FIT Approved Projects as of Q415
Total
Small
Category Wind Biomass Biogas Solar PV Geothermal TOTAL Capacity
Hydro
(MW)
Plants in Operation 0 0 0 2 0 0 2
1
Projects With Signed
2 1 0 10 0 0 13
PPA's 106
Projects with Initialled
2 0 1 1 0 0 4
PPA's 158

Projects with Finalized


0 1 0 0 2 0 3
PPA Negotiations 19

Projects with PPA's under


2 1 0 2 7 0 12
Negotiations 323

Approved Projects with


PPA Negotiations Yet to 1 1 1 14 1 0 18
225
Start

Projects in Feasibility
7 10 4 29 28 1 79
Study Stage 1,661
Total no. of Approved
14 14 6 58 38 1 131
Projects 2,492

Total Capacity 293


628 254 53 1,249 15 2,492
(MW)
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Source: Government of Kenya Ministry of Energy & Petroleum
KENYA VISION 2030 ENERGY ROADMAP
National Plan to add 50%
of Renewables 17,754MW TOTAL CAPACITY MIX
263
17,764
Hydro
1,600 Wind

15,006 2,200 Hydro Imports

12,141
4,200 Nuclear
10,097
Todays Peak = 1,570MW 8,226
Installed Capacity 2,298MW
4,491
Demand is 30%-40% lag
6,768
Fossil
4,659

3,141
3,474
5,000 Geothermal
1,482 2,038
1,278

2009/10 2014/15 2023/24 2029/30


2018 202
/19 6/27 Total Capacity (MW)
Peak Demand (MW)
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POLICY DRIVING INVESTMENT
TRUMP ON
TRUMP ONWIND
WIND

Wind farms are a disaster


for the environment. They
kill the birds. They are very
expensive in terms of
energy. They're made in
China.
Donald
Trump
US Presidential Candidate
Picture: Michael Nagle/Bloomberg

BNEF Summit, New York, 5 April 2


2016 8
THE OPPORTUNITY SMALL HYDRO DEVELOPMENT
IN KENYA

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SMALL
Low HYDROs
Impact OPPORTUNITY
Small Hydro Power Plants

Our Goal Development of low impact Small Hydros

Example of a Run-of-the-River low impact hydropower system.


21
Study
SMALL Grid Connection
HYDROs OPPORTUNITY
T&D IMPROVEMENTS

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OUR VISION INCREASE IN CLEAN ENERGY INVESTMENTS
PROJECTS COMPLETED - 2015
PREFEASIBILITY STUDIES SMALL HYDROS

Gitie SHP 2.2MW


Studies on River Nyamindi, Mt Kenya Basin
Kirinyaga County, KENYA

Scope of Works :
Hydrology Studies
Grid Connection Studies
Economic Analyses
Completed March, 2015

Riamathakwa 3MW Kiamutugu I 3.3MW Kiamutugu II 1.2MW


PROJECTS COMPLETED - 2015
PREFEASIBILITY STUDIES SMALL HYDROS

Nzoia River 1MW


Prefeasibility Studies Mount Elgon Basin
Western Kenya

Scope of Works :
Hydrology Studies
Grid Connection Studies
Economic Analyses
Completed March, 2015

Suam River 2MW


STUDIES COMPLETED

Kleen Energy 6.5MW Small Hydro


Rupingazi River, Embu

Feasibility Study Completed Q113


EOI Submitted Q213
Other Pre-development work: 2013-2015
PPA Signed Q315
Financial Close Early 2016
Construction Late 2016

Power Station Site


STUDIES COMPLETED
Kleen Energy Small Hydro Project

Kenya Power PPA Signing Ceremony August 12, 2015


PROJECTS UNDER CONSTRUCTION

SMALL HYDRO KTDA 5.8MW


Gura SHPP

EPC Contract awarded to VS Hydro Ltd on


26thJune 2012
Contract completion date: March 2015
Extended by 6 months to September 2015
Expected annual generation: 27,300 MWh
PROJECTS UNDER CONSTRUCTION

SMALL HYDRO KTDA 1.5MW


Iraru

Expected annual generation:


9,350,000kWh

Expected completion date:


December 2016
PROJECTS UNDER CONSTRUCTION

SMALL HYDRO KTDA 5.6MW


North Mathioya

Expected annual generation:


28,400,000kWh

Expected completion date:


Dec 2016
PROJECT RISKS

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PROJECT RISKS
Risk Elements & Considerations

Technology: Site control


Suppliers / track record Land lease / license arrangements
Warranty Easements
Revenue: Transmission/Distribution
PPA structure (i.e., security of Permits
revenue stream) Environmental
Tradable credits (Carbon Mkts) Local issues (County)
Sponsors: O&M / Asset Management:
Timeline Commitments Contractor / track record
Track record Equipment/Service Warranties
Construction: Transmission
EPC / turnkey (i.e., structure) Incentives for good performance
Contractor / track record Regulatory:
Change in law

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Andrew Njoba
Team Leader, DFID Clean Energy Promotion
Program
KENYA ASSOCIATION OF MANUFACTURERS
sbsecc@kam.co.ke
Tel: (0722) 201368