Kenya’s ambitious plan to become a clean technology hub

For years, Kenya has been a leader in Africa in terms of the share of renewable energy in the energy mix. Currently, it wants to take advantage of the dynamically developing clean technology industry and become a partner in the supply chain of major economies, including the United States.

Africa is abundant in key minerals related to energy metabolism. It also has a huge young generation and developing economies, all of which will need increasing energy demands in the coming years and decades.

However, indebted African countries do not have the financial resources to become clean technology powerhouses like China or the United States because they cannot afford to provide generous incentives and subsidies to boost the production of green technologies.

The problem with the energy transition has always been emerging markets, especially in Africa, which have lagged behind the rest of the world in clean energy adoption.

Kenya in East Africa is excelling in the renewable energy sector and is now looking to boost green industrialization and clean energy production. However, financing problems are similar to those hampering Africa’s energy transition.

While developed economies are subsidizing the energy transition, developing countries in Africa lack the resources to be clean technology leaders.

Renewable energy sources account for 90% of Kenya’s energy supply

“Kenya is emerging as an emerging leader in the global clean energy landscape, with renewables expected to account for almost 90% of energy generated and consumed in 2021.” – reports the International Energy Agency (IEA).

The largest source of clean energy in Kenya is geothermal energy: of the 90% renewable energy, approximately 47% comes from geothermal energy, 30% from hydropower, 12% from wind and 2% from solar.

Kenya has also made significant progress towards achieving universal access to electricity, doubling electricity access from 32% in 2013 to 75% in 2022. The country is on track to ensure electricity supply to the entire population by 2030, in line with national plans to achieve universal access to electricity according to the IEA.

Under the government’s Kenya Vision 2030, developing new and renewable energy sources, energy efficiency and increasing access to electricity are key areas of focus as the country seeks to provide greater support in meeting energy demand and greater integration of renewable energy.

Kenya is the seventh largest producer of geothermal energy in the world due to its geographical location. According to the International Monetary Fund (IMF), the country of approximately 54 million people lies in the Great Rift Valley, a series of geographic rifts and lowland areas.

“A developing country that produces almost 90 percent of its renewable energy is quite unique,” ​​Tobias Rasmussen, the IMF representative in Kenya, said in 2022.

“Renewable energy has the potential to become Kenya’s main growth driver in the future,” Rasmussen added.

Kenya-US Climate Partnership

Kenya is keen to harness its clean energy industrial potential and signed an industrial partnership on climate and clean energy with the United States last week during President William Ruto’s state visit to the US – the first state visit by an African leader to the White House in more than 15 years.

“Through this partnership, the United States and Kenya plan to prioritize cooperation in three mutually supportive areas of clean energy implementation, clean energy supply chains and green industrialization,” U.S. President Joe Biden and Kenyan President Ruto said in a joint statement.

The United States and Kenya committed to leveraging their advantages in the clean energy sector and developing resilient value chains for low-carbon goods, including electric vehicle and e-mobility supply chains, carbon capture and storage technologies, green agro-processing, clean cooking technologies and green hubs data.

“As part of our bilateral engagement, the United States and Kenya commit to consulting on key political, trade and regulatory reforms to support the development of and investment in industrial green capabilities,” the leaders said.

The United States has partnered with Kenya on clean technology and investment, working with companies investing in clean energy development and energy-intensive industries.

Just last week, Microsoft and UAE-based G42, in collaboration with local partners, agreed to design and build a data center campus in Kenya that will be powered entirely by renewable geothermal energy.

“Africa’s resource potential is a tremendous opportunity to leverage American technologies and investments to catalyze unprecedented growth through green industrialization,” said Kenyan President Ruto, commenting on the U.S.-Kenya climate partnership.

Challenges facing Africa’s energy transformation

However, Africa faces an uphill battle to accelerate its energy transition despite its enormous needs and rich mineral resources. Africa has about 20% of the world’s population but attracts less than 2% of its spending on clean energy, the IEA said in a report last September.

“As things currently stand, there is a mismatch between the type of capital available and the needs of Africa’s emerging clean energy sector, with a particular lack of early-stage and equity financing,” the IEA said.

Around the same time, in September 2023, African heads of state and government met at the inaugural African Climate Summit (ACS) in Nairobi, Kenya, and expressed concern that “even though Africa has an estimated 40 percent of the world’s renewable energy resources, only $60 billion, or two percent, of the $3 trillion in renewable energy investment over the last decade went to Africa.”

Commenting on last year’s IEA report, the agency’s executive director Fatih Birol said: “The African continent has enormous clean energy potential, including a huge amount of high-quality renewable resources.”

“However, the difficult financial situation means that many transformation projects cannot be delivered.”

Author: Tsvetana Paraskova for Oilprice.com

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