Revised Feed-in-Tariffs for Renewable Energy
In January 2010, the Kenyan government published its new feed-in-tariffs (FIT) to provide investment security to renewable electricity generators, reduce administrative and transaction costs and encourage private investors.
Enacted in 2008, the first Kenyan FIT policy only included wind, hydropower and bioenergy generated electricity. The 2010 version of the FIT modifies the existing 2008 tariffs and includes geothermal, solar and biogas generated electricity. 2010 tariffs apply to grid-connected plants and are valid for a 20-year period from the beginning of the Power Purchase Agreement (PPA). To become official, such PPAs linking power producers to grid system operators must meet prior approval from the Energy Regulatory Commission.
Enacted tariffs vary according to the plant generation capacity, and the maximum power tariff at the interconnection point differs for firm and non-firm generators:
Renewable source | Power plant capacity | Period of time | Maximum feed-in tariff level in USD/kWh | |
Firm | Non-firm | |||
Geothermal | < 70 MW | 20 years | 0.085 | N/A |
Wind | 0.5 MW – 100 MW | 0.12 | ||
Biomass | 0.5 MW – 100 MW | 0.08 | 0.06 | |
Small Hydropower | 0.5 MW – 0.99 MW | 0.12 | 0.10 | |
| 1 MW – 5 MW | 0.10 | 0.08 | |
| 5.1 MW – 10 MW | 0.08 | 0.06 | |
Biogas | 0.5 MW – 40 MW | 0.08 | 0.06 | |
Solar | 0.5 MW – 10 MW | 0.20 | 0.10 | |
Grid systems operators must guarantee connection and priority purchase, transmission and distribution for electricity from renewable energy sources. Each project is subjected to a mandatory Preliminary Project Feasibility Assessment conducted by the Ministry of Energy to decide whether the project is ficially viable.
Currently, the FiT Policy is under review, to take on board cost of money and cost of equipment. A standardized PPA's are being formulated also, as well as Connection Guidelines.The aim is to shorten the process of establishing PPA's and enhance clarity in grid inter-connection. It is expected that the new FiT Policy, as well as the Standardized PPA and Connection Guidelines will be published by end of September 2012.
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