Blockchain Technology and Operational Efficiency in Kenya’s Power Sector

Abstract

The Kenyan power sector has proven to be a success story, especially in the global renewable energy market. This has been attributed to the strong Government support and long-term partnership with IPP and fintech companies. In addition, there is a predictable and strong enabling market for innovative off-grid solutions. However, despite these great initiatives by all power industry players, the sector’s operational efficiency and power cost are not reflecting the efforts made so far. The study investigated how blockchains or distributed ledger technology, through its transparent, tamper-proof, and secure systems, could streamline and take Kenya from good to great across its power generation, transmission, distribution, and regulation processes. The study attempted to scope the operational efficiency of governmental entities (MoE, EPRA, REA), the national utilities (KENGEN, KPLC, KETRACO), the IPP (Orpower), the fintech (M-kopa) and end-users. The study was guided by the following objectives: to map out potential applications of blockchains in the Kenyan power sector, to investigate the impact of blockchains on operational efficiency and to determine the constraints facing the adoption of distributed ledger technology by the Kenyan power sector. The study adopted a descriptive research design where a sample size of 12 respondents consisting of departmental heads, business unit managers, senior engineers, ICT offers and general management professionals. The study observed that remote working had been partially adopted by most organizations. This minimized face-to-face meetings, interview guides were therefore administered via telephone calls and video conferences. Content analysis was applied to analyze objectively, interpret, and discuss the collected data. The findings from research established that blockchain is relevant for direct application in the Kenyan power sector, ranging from the imminent P2P trading platforms, digitization by IoT, decentralized trading platforms and E-mobility. For every application, the study identified the potential drawbacks and possible solutions to be overcome by Kenya's power sector mainstream.