Introduction

Kenya has emerged as a front-runner in East Africa for investments in energy and power. The country has a robust policy to increase its power generation capacity from the current 2,295 MW to an estimated 17,261 MW by 2030. While the current generation portfolio is dominated by geothermal, hydro, and diesel-based systems, this is expected to change drastically by 2030, with geothermal, coal, nuclear, and gas-based systems expected to dominate. Kenya’s power generation expansion plans are in line with the government’s Least Cost Power Development Plan (LCPDP), which was formulated in 2011and revised in 2013. Developing Kenya as a low-cost investment destination for energy-related operational expenditures has been the cornerstone for the increased focus on geothermal, coal, and natural gas-based generating systems.

While the existing generation profile is largely dependent on hydropower for meeting the country’s base load electricity demands, the frequency and severity of droughts have resulted in power outages, hampering industrial and economic growth. This has influenced the government’s decision to deviate from a hydro-based generation mix to one dominated by thermal generation.

Large-scale development of thermal and nuclear-based power, however, raises the water requirement of the electricity supply industry. Water is required for applications ranging from fuel mining and processing to actual operations and cooling. In the wake of rising water scarcity and increasing demand from a fast-growing population, it is crucial to examine the relationship between electricity demand and water supply, which are interdependent and critical for ensuring sustained economic progress.

Kenya Power Generation: Current Situation and Future Outlook

Kenya has made commendable progress in employing its geothermal resources for generating power. Its installed geothermal capacity of 593 MW makes it the 8th-largest country globally in terms of installed capacity. Heavy dependency on hydropower and its reduced availability during droughts have forced the country to rely on costly diesel-based power, resulting in electricity tariffs that are amongst the highest in Sub-Saharan Africa. Figure 1 compares Kenya’s installed capacity in 2014 with projections for 2030.

Figure 1: Electricity Generation: Installed Capacity and Forecast, Kenya, 2014 and 2030

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Kenya’s Ministry of Energy and Petroleum expects peak electricity demand in the country to grow to 5,359 MW by 2018, driven by rising demand from energy-intensive activities such as mining, iron and steel production, petroleum transportation, petrochemical production, railway electrification, and development of economic zones. The ministry envisages meeting this through commissioning of an additional 5,000 MW of generating capacity, a large proportion of which would be through geothermal (1,646 MW) and coal-based (1,920 MW) systems, with meagre hydropower capacity addition. The proposed generation profile is expected to reduce generation costs from US 11.30 cents per kWh to US 7.41 cents, while industrial tariffs could decline from US 14.14 cents per kWh to US 9 cents and domestic tariffs from US 19.78 cents to US 10.45 cents.

Peak electricity demand is projected to increase to 18,000 MW by 2030, supply for which would primarily be met through installation of 5,584 MW of geothermal power; 2,100 MW of coal; 1,600 MW of nuclear; 2,520 MW of gas; and 2,186 MW of wind. Geothermal, coal, nuclear, and gas-based power are poised to be the mainstays of Kenya’s power generation in the long term.  Figure 2 shows Kenya’s expected electricity generation through 2030.

Figure 2: Electricity Generation: Actual and Projected Energy Generation, Kenya, 2011/12–2030/31

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Kenya Water Resources: Current Situation and Future Outlook

Water scarcity has been a cause of concern for Kenya over the past decade. With a predominantly arid climate, unequitable delivery has added to the country’s water woes. Droughts have been rapidly decreasing water availability, from 826.78 cubic metres per capita in 1992 to 548.31 in 2007 and 466.7 in 2013. Kenya’s population, now at 44.86 million, is projected to increase to 68 million by 2030, further stressing its water resources. Urban population as a percentage of total population is set to increase from 25% in 2014 to 60% in 2030, driving the demand for a reliable supply of quality water. Water demand in the country is set to increase from 3 billion cubic metres in 2013 to 13 billion by 2030, while annual renewable water resources are estimated to be at 44 billion cubic metres in 2030. Agriculture and livestock usage accounts for 79% of the total freshwater withdrawn in Kenya, followed by domestic usage at 17% and industrial usage at 4%.

Kenya’s Vision 2030 envisages developing the country as an attractive investment destination for industries and a major manufacturing centre in East Africa. Provision of ample and cheap power through geothermal, coal, and nuclear resources, and requirements for various manufacturing processes and agricultural and domestic use are expected to increase water demand, making it imperative to strike a balance with available resources.

Kenya Power Generation: Energy and Water Nexus

Water requirements throughout the power generation life cycle have significant implications on the electricity supply industry. While most thermoelectric generation technologies require water to meet either their process or cooling requirements, wind and solar technologies also require water — primarily in their construction phases. Water requirements for fuel extraction and processing indirectly affect electricity generation, depicting the vulnerability of the electricity supply industry on water availability. Figure 3 shows the consolidated and harmonised estimates of water consumption for different power generation technologies employed globally.

Figure 3: Electricity Generation: Water Use by Technology, Global, 2013

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Figure 3 considers water demand for actual operations and does not take into consideration demands for fuel mining and processing, which are equally critical. A median estimate is provided for each technology category; minimum and maximum ranges represent not only variability in data but also technology and life cycle stages.   Coal and nuclear power plants have the highest water demand amongst thermoelectric systems, necessary for steam generation and cooling of key processes and components during operation. More efficient coal combustion technologies such as super-critical combustion cycle and integrated gasification combined cycle consumed less water for each unit of power generated compared with cub-critical combustion technologies.

While gas and diesel generating systems require water for cooling, combined-cycle systems require more water for steam generation. Considering the thermal efficiencies offered by combined-cycle gas systems, the water consumed per unit of power generated is one-third to one-half that consumed by coal-fired plants for any cooling technology.

Renewable energy technologies such as wind and solar photovoltaic (PV) require water primarily during their construction; however, reliable supply of water is imperative for operation of geothermal and solar thermal systems. Water consumption estimates for concentrating solar power are higher than that for non-renewable thermal generation systems. While solar PV systems require water to wash panels, wind turbines do not require any water for operation or washing. Figures 4 and 5 show the latest numbers available for power plant operations’ water consumption, and a consumption forecast for 2030/31.

Figure 4: Electricity Generation: Water Consumption for Power Plant Operations, Kenya, 2013/14

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Kenya has heavily relied on hydropower and diesel-based emergency plants to meet its power requirements, while geothermal has been making significant contributions to the power generation mix over the past 3 to 5 years. Kenya is estimated to have consumed over 0.6 million cubic metres of water for meeting its power needs, with 84.5% of the total consumed by diesel systems and 13.8% by geothermal systems.

Figure 5: Electricity Generation: Projected Water Consumption for Power Plant Operations, Kenya, 2030/31

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Kenya’s generation portfolio is expected to change drastically by 2030/31, with the country reducing its dependence on hydropower and costly diesel power, and geothermal, nuclear, coal, and wind energy dominating the electricity generation mix. An increasing proportion of nuclear and coal generating systems will significantly alter the power sector’s water requirement in Kenya. In tune with the proposed LCPDP strategy, Kenya is expected to consume over 38.18 million cubic metres of fresh water for its power generation in 2030/31, which is an astronomical rise over existing consumption.  The statistics provided in figures 4 and 5 consider water consumption for actual operations and do not take into account water needed for fuel extraction and processing, which would further increase water demand from Kenya’s expanding power generation sector.

Conclusion

Kenya’s proposed electricity generation expansion plan is expected to increase the sector’s water requirement from 0.6 million cubic metres today to 38.18 million cubic metres by 2030/31. Reduced dependency on hydropower to meet the country’s growing electricity demands is a positive step towards providing reliable power to a rapidly growing economy, while the sector’s increased water consumption coupled with diminishing freshwater reserves is a concern that must be addressed quickly.

Although Kenya is expected to have significant reserves to meet its growing water demand, competing requirements from the domestic, agricultural, and industrial sectors require an integrated approach to ensure sustainable development. Adopting technological advances in power generation, water management, and water recycling are critical to reducing the power generation sector’s water footprint.  Super critical coal combustion integrated gasification combined cycle, combined cycle gas turbine, solar PV, and wind turbine generator systems would ensure power supply with minimal negative impact on Kenya’s water reserves. In addition to improved power generation technologies, Kenya presents huge potential for improving its water infrastructure and incorporating modern technologies such as smart metering and water demand management to ensure a supply that meets increasing demand.

About Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

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