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DEVELOPMENT-KENYA: People, Not Electricity, Make Growth Possible

Najum Mushtaq

NAIROBI, Aug 14 2008 (IPS) - Conventional wisdom holds that a shortage of affordable and reliable energy is a key factor in perpetuating low levels of development in countries like Kenya. But the country's chief energy regulator argues that Kenya has all the power it needs, and growth in generation need not precede growth in demand.

"If you ask me if there's an electricity crunch in Kenya, I'd say there is and there isn't," says Hindpal Singh Jabbal, chair of the Energy Regulatory Commission (ERC) of Kenya. "We are just about meeting our current electricity demand. There are no power cuts, no load-shedding as such. The gap between demand and supply is negligible.

"But in terms of financing and covering the cost of electricity generation, it is not only Kenya but also Tanzania and Uganda that are facing a crunch," says the ERC chief. Jabbal identifies dependence on the falling capacity of hydroelectric plants as one of the main limits on power generation.

A few years ago, 80 percent of Kenya's power came from hydro sources. That share is now down to 45 percent with geo-thermal providing 15 percent and plants burning one or another kind of petroleum-based fuel making up the remaining 40 percent. Demand for electricity is increasing by about seven percent annually, though more than 80 percent of the country's rural population have no electricity.

In the next four years, Jabbal says, Kenya will phase out its more expensive emergency thermal plants – emergency power plants running on diesel and gas-turbines using kerosene oil – and rely on heavy-fuel plants and geothermal to provide the additional 70 to 80 megawatts required every year.

"Geo-thermal energy is the future," observes Jabbal. "We have no coal so far, no gas and no oil. The Rift Valley is rich in geo-thermal energy and in time a bigger chunk of the country's power will come from this source."

He acknowledges there are negative environmental effects of exploiting this resource, but holds that these are offset by the fact that geo-thermal power is carbon-free. "Its adverse impact on agriculture is well known but, fortunately, Kenya's geothermal plants will be located in semi-desert areas of the valley where there is no farming land to be affected.

"We don't fully know the potential of our geothermal sources. It could be anywhere between 2000 to 7000 megawatts. But it is the way forward for Kenya."

Not all energy experts share Jabbal's optimism. Most of them believe that economic growth is dependent on an adequate energy supply and that Kenya is struggling on this front.

Abdi Awale, a former World Bank consultant, says that "Kenya will have to start thinking out of the box and tap unconventional sources of energy to speed up its economic growth."

He also points out that most of rural Kenya is not electrified and therefore the official claim of meeting the current demand is only half true.

"The urban-rural disparity is glaring. The country may be meeting its industrial and urban energy demands, but that covers only 15-20 percent of the population. In the rural areas, people still consume charcoal and wood, which makes up about 80 percent of all energy used in the country," says Awale, who thinks that more energy would translate into higher economic growth.

"At about 1100 MW, the current supply cannot industrialize Kenya nor drive it to achieve its development goals fast enough," says Awale.

However, the ERC chief turns this equation on its head. "It is usually growth in the economy which drives the demand for electricity and energy, and not the other way around as is generally believed," argues Jabbal. "Electricity is only one ingredient in the cost of production. The other ingredients are capital, markets for the goods produced and an enabling environment, raw materials and technology, and lastly the energy input."

He notes that the electricity bill of an average industry is not more than six to seven percent of the total cost of production and that despite high energy costs, Kenya is the biggest exporter in East Africa and its economy has grown by 6 percent over the last four years.

"Above all, the absolutely essential ingredient of economic production is the people and their working culture. The real force behind industrial and economic growth is the people. We need our own people to run and manage industry ourselves," Jabbal argues, saying that cultural traits, scarcity of human resources, and the pattern of population distribution pose hurdles for further growth.

Nishit Shah, an electrical engineer with a Nairobi-based power transmission firm, says that the problem of electrification in the rural areas is not merely a matter of generating more power.

"The cost of transmission and distribution to Kenya's rural areas is also prohibitive. Villages here are not compact residential areas. Houses and people are scattered on farms of varying sizes and there is no village system," says Shah.

Where would the money to finance future projects come from? The ERC chief says that like most of the developing world, his country has developed a dependency-syndrome with donor agencies. "Though we'll have to keep looking to donor agencies like the World Bank for financing, the problem will not go away unless Kenya becomes self-reliant, promotes a culture of local investment, and develops and exploits its own resources."

Greater cooperation with other countries in the Horn and East Africa is also becoming inevitable. Kenya, the ERC chief says, will 'interconnect' with Ethiopia and will be getting 450-500 MW from its neighbour by year 2014. Similar arrangements with Tanzania are also being negotiated.

"Energy is our mutual, regional problem. And it is going to force more regional cooperation among East African countries. We have to learn to solve our problems on our own."

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