TECHNICAL ASSISTANCE - SMALL HYDRO DEVELOPMENT IN KENYA Andrew Njoba Team Leader, Clean Energy Promotion KENYA ASSOCIATION OF MANUFACTURERS KENYA

Transcription

1 TECHNICAL ASSISTANCE - SMALL HYDRO DEVELOPMENT IN KENYA Andrew Njoba Team Leader, Clean Energy Promotion KENYA ASSOCIATION OF MANUFACTURERS KENYA

2 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

3 THE KAM TECHNICAL ASSISTANCE PROGRAM

4 TECHNICAL ASSISTANCE PROGRAM Ready Project Pipeline: Began in 2012 Assisted 100+ Projects in East Africa Project Pipeline includes: Installed capacity of 240MW Total Capex of $570 Million 240MW Generating 1,170 GWh of electricity each year 460,000 # of Kenyan Homes Powered Per Year

5 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

6 FEASIBILITY STUDIES SUPPORT PROJECT DEVELOPMENT PROCESS Pre-Development Phase Establish Business Need Concept Study Pre-Feasibility Develop Business Case Feasibility Study Front End Engineering Design (FEED) Establish Commercial Arrangements Develop Procurement Strategy Develop Spec and Tender Tender Selection and Award Financial Close Project Implementation Detailed Engineering Construction Management Commissioning and Acceptance Commercial Operation KAM Support Technologies Supported: Small Hydros Solar PV Waste-to-Energy

7 7 Source: Ministry of Energy

8 POLICY DRIVER FOR CLEAN ENERGY INVESTMENTS 8

9 POLICY DRIVING INVESTMENT

10 POLICY DRIVING INVESTMENT

11 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 6

12 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 BNEF Summit, New York, 5 April 2016 Kenya FIT

13 POLICY DRIVING INVESTMENT CLEAN ENERGY INVESTMENT ROSE WHILE OIL PLUMMETED GLOBAL CLEAN ENERGY INVESTMENT VS WTI CRUDE SPOT Record investment $146/bbl $274bn $318bn $297bn $272bn $316bn $329bn $175bn $206bn $207bn $128bn $62bn $88bn $37/bbl Source: Bloomberg BNEF Summit, New York, 5 April

14 14

15 POLICY DRIVING INVESTMENT 15

16 Date - Q4,

17 POLICY Kenya FIT DRIVING - Project Pipeline INVESTMENT (Dec 15) FIT Approved Projects as of Q4 15 Category Wind Biomass Biogas Small Hydro Solar PV Geothermal TOTAL Plants in Operation Projects With Signed PPA's Projects with Initialled PPA's Total Capacity (MW) Projects with Finalized PPA Negotiations Projects with PPA's under Negotiations Approved Projects with PPA Negotiations Yet to Start Projects in Feasibility Study Stage Total no. of Approved Projects ,661 2,492 Total Capacity (MW) Source: Government of Kenya Ministry of Energy & Petroleum 1, ,492 17

18 KENYA VISION 2030 ENERGY ROADMAP National Plan to add 50% of Renewables 17,764 17,754MW TOTAL CAPACITY MIX Hydro 263 1,600 Wind 15,006 2,200 Hydro Imports 12,141 4,200 Nuclear 10,097 Today s Peak = 1,570MW Installed Capacity 2,298MW Demand is 30%-40% lag 8,226 6,768 4,491 Fossil 4,659 1,482 1,278 3,141 2,038 3,474 5,000 Geothermal 2009/ / / / /19 6/27 Total Capacity (MW) Peak Demand (MW) 13

19 POLICY DRIVING INVESTMENT TRUMP ON WIND TRUMP ON 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 BNEF Summit, New York, 5 April 2016 Picture: Michael Nagle/Bloomberg 2 8

20 THE OPPORTUNITY SMALL HYDRO DEVELOPMENT IN KENYA 20

21 SMALL HYDROs OPPORTUNITY Low Impact Small Hydro Power Plants Our Goal Development of low impact Small Hydros Example of a Run-of-the-River low impact hydropower system. 21

22 Study Grid Connection SMALL HYDROs OPPORTUNITY T&D IMPROVEMENTS 22

23 OUR VISION INCREASE IN CLEAN ENERGY INVESTMENTS

24 PROJECTS COMPLETED 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

25 PROJECTS COMPLETED 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

26 STUDIES COMPLETED Kleen Energy 6.5MW Small Hydro Rupingazi River, Embu Feasibility Study Completed Q1 13 EOI Submitted Q2 13 Other Pre-development work: PPA Signed Q3 15 Financial Close Early 2016 Construction Late 2016 Power Station Site

27 STUDIES COMPLETED Kleen Energy Small Hydro Project Kenya Power PPA Signing Ceremony August 12, 2015

28 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

29 PROJECTS UNDER CONSTRUCTION SMALL HYDRO KTDA 1.5MW Iraru Expected annual generation: 9,350,000kWh Expected completion date: December 2016

30 PROJECTS UNDER CONSTRUCTION SMALL HYDRO KTDA 5.6MW North Mathioya Expected annual generation: 28,400,000kWh Expected completion date: Dec 2016

31 PROJECT RISKS 31

32 PROJECT RISKS Risk Elements & Considerations Technology: Suppliers / track record Warranty Revenue: PPA structure (i.e., security of revenue stream) Tradable credits (Carbon Mkts) Sponsors: Timeline Commitments Track record Construction: EPC / turnkey (i.e., structure) Contractor / track record Site control Land lease / license arrangements Easements Transmission/Distribution Permits Environmental Local issues (County) O&M / Asset Management: Contractor / track record Equipment/Service Warranties Transmission Incentives for good performance Regulatory: Change in law 32

33 Andrew Njoba Team Leader, DFID Clean Energy Promotion Program KENYA ASSOCIATION OF MANUFACTURERS Tel: (0722)