Growth in Energy Demand and Supply and Its Implications for Achieving an Inclusive Green Economy in Kenya

Abstract

The study modeled Kenya’s electricity demand and supply as well as the associated greenhouse gases emissions up to the year 2030. The study was prompted by the concern on Kenya’s plan to expand the exploitation of non-renewable resources for electricity generation in order to meet the growing demand. This source has the potential of increasing electricity supply but also has potential negative environmental impact such as an increase in GHGs emissions, which is contrary to Kenya’s intended low carbon development pathway. Autoregressive Distributed Lag (ARDL) and Long-range Energy Alternative Planning System (LEAP) models were used to project electricity demand for both the domestic as well as industrial and commercial sectors. Electricity demand forecasts estimated using LEAP model were found to be more comparable to the forecasts in the Least Cost Power Development Plan (LCPDP), hence, the results obtained using the LEAP model were considered as the basis for the analysis. Based on the projected electricity demand, three electricity generation scenarios: Business as Usual (BAU), Green Energy Scenario 1 (GES1), and Green Energy Scenario 2 (GES2) were developed and analyzed. Cost analysis for the different electricity generation scenarios was also done to establish the costs associated with the different energy mixes. The projected demand for the domestic sector in the year 2030 is 5,378.2 GWh, while the projected demand for the commercial and industrial sector is 14,667 GWh. GHGs emissions from electricity generation in the base year was estimated to be 112.6 MtCO2eq. However, by the year 2030, GHG emissions from electricity generation is estimated to be 192.7 MtCO2eq, 63.1 MtCO2eq, and 6.3 MtCO2eq for the BAU, GES1, and GES2 respectively. Operating and maintenance (O&M) costs are expected to be 1,807.8 million US dollars by the year 2030 under the BAU, while under GES1 and GES2, these costs are expected to be 448.4 million US dollars and 587.7 million US dollars respectively. A comparison of the three scenarios in terms of the operating and maintenance costs and associated GHGs emissions indicated that GES1 is the most realistic pathway that should be followed in order for Kenya to meet the growing electricity demand and achieve its NDC commitment, hence moving towards attainment of an inclusive green economy by significant reduction of carbon emissions.