A host of independent power producers (IPPs) are expected to invest in this power sector to exploit the country’s 7 000 MW geothermal power potential.
New analysis from Frost & Sullivan (energyandpower.frost.com) Strategic Analysis of the Kenyan Electricity Industry, finds that the market earned revenues of $365 million in 2006 and estimates this to reach $512 million in 2013.
"While Kenya's robust economic growth is fuelling the demand for power, existing supplies are unable meet demand, leading to acute power shortages and blackouts," notes Frost & Sullivan Research Analyst Moses Duma. "Furthermore, approximately 62 per cent of Kenya's power plants use water as their major feedstock, leaving them prone to fluctuating water levels as a result of climate and weather variations."
Considering the above, the discovery of geothermal power potential is expected to revive the country's ailing power industry. Kenya has a potential to generate over 7,000 MW from its identified geothermal power reserves. The country has already developed 115 MW from this and plans are underway to construct more new geothermal power stations.
However, the dominance of the state utility in power transmission and distribution is a major restraint for the Kenyan electricity industry. Although Kenya has opened up the power generation function to IPPs, power transmission and distribution functions are still limited to the state utility – Kenya Power and Lighting Co. Ltd (KPLC).
"Lack of project finance is an additional barrier for prospective companies, and even the Kenyan Government lacks adequate financial resources to actualise the planned power projects," says Duma. "Even though energy resources are plentiful in Kenya, the infrastructure to transport, distribute, transform and efficiently utilise them is lacking."
Overall, the Kenyan power industry is still in its developmental stage, but has considerable potential for growth in the short to medium term. The government's immediate focus should be on improving tariff levels to attract investment from both local and international companies.
If you are interested in a virtual brochure, which provides manufacturers, end users and other industry participants with an overview of strategic analysis of the Kenyan electricity industry, then send an email to Patrick Cairns, Corporate Communications, at patrick.cairns[.]frost.com, with your full name, company name, title, telephone number, company email address, company website, city, state and country. Upon receipt of the above information, an overview will be sent to you by email.
Strategic Analysis of the Kenyan Electricity Industry is part of the Energy & Power Growth Partnership Service programme, which also includes research in the following markets: Asian Power Plant Markets, Country Industry Forecast: Strategic Analysis of the Nigerian Electricity Industry, Strategic Analysis of the Zambian Electricity Industry, Asian Power Plant Markets, Country Industry Forecast: The German Energy Industry, SADC Transmission and Distribution Equipment Markets and Africa Steam and Gas Turbine Markets. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Interviews with the press are available.
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