Blog
Posted on July 20, 2016

A Decade of Energy Access Transformation (2006-2016): Is energy inclusion in Kenya on the rise?

It’s no secret that developing energy is hard work – it’s capital intensive and requires a long-term vision and commitment. However, Kenya is not shying away from the challenge. Energy a critical driver of the economy and Kenya’s development blueprint, the Kenya Vision 2030, recognizes it as key to the socio-economic development of the nation.

FinAccess 2016, a survey of Kenyan household spending, reveals that about a decade ago, 74% of Kenyan households used kerosene as their main source of lighting and 65% used collected firewood as the main source of cooking fuel. Ten years later, just 44% of Kenyan households use kerosene as the main source of lighting, while 57% still use collected firewood as the main source of cooking fuel (sourced primarily from range lands, government forests and smallholdings).

Figure1: Main sources of Lighting - % Adults
Figure 1: Main sources of Lighting – % Adults

Kenya boasts significant hydro power resources; according to the industry regulator, the Energy Regulatory Commission (ERC), 45% of Kenya’s energy comes from hydro, 31% from fossil fuels, and 23% from geothermal. The decline over the years in the use of kerosene for lighting is a consequence of energy initiatives in Kenya, both by the public and the private sector. A good number and diverse range of these initiatives sought to bring clean energy to low-income people in particular.

For instance, the Kenyan government reduced connection fees to the national grid from KShs. 35,000 to KShs. 15, 000 in May 2015. Consequently, in the same year, the Kenya Power & Lighting Company (KPLC) added at least one million new connections to the national grid. Separately, various private sector players (including KENSEN, Sunlar, M-KOPA, Go Solar Systems and PowerPoint Systems) are breaking the bounds of energy access by providing off-grid energy solutions for lighting as well as powering electronic devices.

Figure 2: Main source of cooking fuel - % of Adults
Figure 2: Main source of cooking fuel – % of Adults

Most of these private sector initiatives are solar based. Since inception, M-KOPA, for example, has sold over 375,000 solar kits in East Africa, and continues to add over 500 homes every day, mostly in Kenya. As a result of all these solar initiatives, by 2016, 15% of Kenyan households own a solar lamp, and 12% use solar as their main source of lighting, up from 1% in 2006. However, while households with access to solar energy increased from 3% in 2013 to 15% in 2016, solar access and usage unfortunately appears to correlate strongly with wealth. 

Sources of lighting and cooking fuel in Kenya remain varied, as shown below. Overall, access to clean and renewable energy in Kenya is increasing. Specifically, access to the national electricity grid and off-grid solar energy is rising rapidly. Many factors might account for this, including falling connection fees, the ability to pay bills remotely, and increasingly diverse energy requirements in addition to lighting and cooking, such as powering electronic devices like phones.

The government, through ERC, has a road-map to increase electricity output to 5,000MW by 2017, through a mix of renewable energy, liquefied natural gas and locally-produced coal. In the latest annual report, the ERC noted that the demand for electric power, as proxied by energy sales, continued to grow significantly – at an average annual growth rate of at least 6%. This is driven by a combination of normal economic growth, increased connections courtesy of the Rural Electrification Programme, as well as the flagship projects which are major drivers of the Vision 2030.

Although the energy landscape in Kenya is evolving and creating more options, Kenyan consumers, especially the rural and lower income households, still face barriers to affordable energy access. For more information on this topic, see the following two blogs: Beyond the price tag: The real benefits of off-grid solar and Solar Stories: Diaries respondents’ experiences with off-grid solar.

You might also like

Digitally replicating how the poor manage their money

Emerging Data Sharing Models to Promote Financial Service Innovation: Global trends and their implications for emerging markets

Kenya Financial Diaries: Shilingi kwa shilingi, the financial lives of the poor

Financial diaries respondent profiles: “Evelyn”: Coping with chronic illness

Capacities to aspire and capacities to save: A gendered analysis of motivations for liquidity management

Mobile payments in Kenya: Findings from a survey of M-PESA users and agents