- Category: News and Highlights
In a bid to conserve the environment and mitigate the effects of climate change, the world is shifting focus away from fossil fuels to green technologies and renewable energy. In anumber of countries around the world, renewable energy contributes significantly to the national grid. However, many other countries are yet to make meaningful investment in renewable energy sources.
Given that renewable energy is key in the growth of a green economy, Kenya has made significant strides to establish a policy framework for the adoption of green technologies and the promotion of a green economy.
The aim of the workshop was to disseminate findings of the Green Growth Diagnostic Research, which was funded by UK Engineering and Physical Science Research Council (EPSRC) and the UK Department for International Development (DfID).
While inviting stakeholders and participants to the workshop, KIPPRA’s Acting Executive Director Dr Dickson Khainga gave a background to the research, noting that the study was aimed at developing a methodology that can be applied in Africa. Dr Khainga added that the study specifically aimed at optimizing policies on how to deal with obstacles constraining investment in renewable energy in Kenya. The research was undertaken jointly by KIPPRA, the Institute of Statistical, Social and Economic Research-University of Ghana (ISSER), the Institute of Development studies (IDS), Durham University, the University of Newcastle and the Policy Practice and Integral Advisory Limited.
KIPPRA Policy Analyst Dr Hellen Hoka, who led the Kenyan team of researchers, made the presentation, which emphasized three key highlights of the report, namely: Costs and returns of renewable energy in Kenya; constraints to investments in renewable technologies that are economically and financially viable, and Kenya’s political economy as a binding constraint to investment in renewable technologies. Ashington Ngigi, a consultant at Integral Advisory, Kenya discussed the role of Kenya’s political economy in promoting investment in renewable energy.
The study found that the most fundamental constraints to renewable energy investment were failure to attract external capital of the form desired and the inability to transform and allocate domestic capital efficiently and effectively. In other words, unattractive investments (caused by low returns and high risks) and poor access to finance (caused by poor intermediation) slowed investment in renewable energy technologies.
The keynote speaker, Eng. Titus Ndonga Gitahi of the Renewable Energy Directorate in the Ministry of Energy, said energy is central to achieving the goals of sustainable development, noting that the Government is committed to supporting developers interested in renewable energy investment. According to Eng. Gitahi, the Government has formulated and enacted policies to guide investment and operations of mini-grids and developed Feed-In-Tarrifs policy in a bid to attract private sector investment in electrical power generation from renewable energy sources.
Eng. Gitahi added that the Government recently completed a study to determine the suitability of replacing the Feed –in-Tariff with Renewable Energy Tariff Auctions and is currently formulating policy. This will enable interested developers bid the tariffs they propose, with aim of achieving reduction in tariffs. Another measure is the preparation of regulations to enable Net-Metering framework, which is awaiting establishment in the New Energy Act.
The report generated a lot discussion from stakeholders and participants, most of who agreed that investment in renewable energy faced many challenges. A number of them suggested that the Government needed to allocate land for such investments as land prices were prohibitive.
Corruption was also pointed out a hurdle as well as the lack of a centralized access to investment processes, which delays approval and hikes costs.
Click www.ids.ac.uk/ggda to freely download reports and publications from the Green Growth Diagnostics project.