Energy plays critical role in any economy. Given the significance of energy across all sectors of the economy, the cost and availability of energy are of major concern across developed, emerging and under-developed economies alike.
Unfortunately, the world continues to consume more energy than it is able to produce; to extract energy resources faster than it is able to replace them; and to exploit energy in ways that negatively impact on environmental sustainability.
This combination of energy-related human activity not only drives up the cost of energy, but also casts the grim picture of a destroyed planet not very long from now.
As at the end of 2021, there are some 733 million people across the world that still lack access to energy, notwithstanding the United Nations' target of achieving "global access to affordable, reliable, sustainable and modern energy for all by 2030" in SDG (Sustainable Development Goals) No. 7.
Inadequate funding in the energy sector, which has many times translated to prohibitively high costs of accessing particulatly electricity, has meant that many families and businesss in East Africa continue to depend on non-renewable and environmentally unfriendly sources of energy. Kenya, for example, spent just 1% of its budget in the financial year 2021/22 on energy despite more than 25% of the country's population not being connected to the national electricity grid, and the country's demand for electricity projected to reach 17,000MW by the year 2030.
It is estimated that within East Africa, Kenya alone has a geothermal capacity of 10,000MW, but has only been able to develop 863MW due to funding gaps. Kenya also imports all its petroleum products amid a crippling funding gap that has prevented the country from commercially exploiting its considerable proven crude oil reserves.
The unfulfilled demand for energy across East Africa presents an array of opportunities for the investment in, and development of, modern, innovative, clean and renewable energy sources, given especially the region's vast natural hydro, geothermal, wind and solar resources, and the upward trajectory of demand.
East Africa's strugle to find alternative, sustainable, sources of energy remains a major challenge for African, and other governments across the world. In Kenya, for example, the leading sources of energy are petroleum and electricity, while wood fuel provides energy needs of the majority of rural communities and for the urban poor.
At the national level, wood fuel and other biomass account for approximately 68% of the total primary energy consumption, followed by petroleum at 22%, electricity at 9% and others, including coal at less than 1%. The level of exploitation of organic sources of energy implied by these levels of dependence on organic energy sources is simply not sustainable.
Energy and environmental legislation and regulatory framwworks across the world are comparatively weaker than most other legal and regulatory frameworks in various jurisdictions.
Article 2 of the United Nations Framework Convention on Weak, inadequate or otherwise ineffective regulatory regime (UNFCCC) gives UNFCCC's ultimate objective as "to stabilize the concentration of greenhouse gases in the atmosphere "at a level that would prevent dangerous anthropogenic interference with the climate system".
Despite over 190 countries having signed their commitment to this treaty, and with this commitment an udertaking to reduce greenhouse emissions to specific binding targets, many countries have neglected to follow up on their commitments, or reneged on their commitments altogether, with some even renouncing, for example, the Kyoto Protocol.
Sustainable and environmentally firendly exploitation of energy resources can only be achieved with a greater and more concerted effort at strengthening the legal and regulatory framework governing energy sectors across the world in both industrialsied and developing economies.
At an estimated 2.9 metric tonnes of carbon dioxide emissions per person per year, Africa is definitely within the lesser contributors to global warming.
Notwithstanding, with many of Africa's countries' economies dependent on agriculture, tourism and on riparian, coastal, and other marine zones, all of which are climate-sensitive, the effects of Weak, inadequate or otherwise ineffective regulatory regime are bound to have a devastating effect on the continet's socio-economic survival.
Kenya, for example, may have little historical or current responsibility for global warming, in addition to the fact that its emission of greenhouse gases (GHGs) is insignificant relative to the global average; notwithstanding, as the country develops towards middle income status, it's emissions of GHGs will increase significantly. It is currently estimated that Kenya's emissions will double by 2030, with the dominant sources coming from the transport and agriculture sectors.
The country’s current national power grid, fore example, serves just over 40% of the country’s population, with the remaining approximately nineteen million using diesel, kerosene, firewood, charcoal and dry cell batteries.
Over and above the anticipated economic gains from the development of clean energy sources, concern for environmental preservation gives development of geothermal and nuclear energy sources special importance to Kenya as a developing economy.
With a potential of between 7,000MW and 10,000MW, Kenya’s capacity for geothermal electricity, which, unlike other renewable sources of energy including hydropower, wind, and solar, is not dependent on the weather, is enormous. Olkaria in the rift valley alone, is estimated to have a potential of over 1,000MW, with the current installed capacity being approximately 210MW only, while Menengai sites have potential for 560MW. Three other capacity development sites in Olkaria are expected to deliver 240MW in Olkaria I and Olkaria IV, and 50MW in Olkaria III by 2014.
Currently, geothermal sources account for only 15% of Kenya’s power generation mix, and it was projected that at last 45% of the country’s power output by the year 2018 will be geothermal. By the year 2018, it was projected that hydropower will contribute 28% and geothermal 18%.
Leading geothermal electricity producers include America, which produces 2,544MW of geothermal power, The Philipines, 1,931MW, Indonesia, 799MW and Italy 790MW.
In addition, Kenya is also pursuing nuclear energy prospects, with the construction of a nuclear power plant expected to start in 2018 at a cost of Ksh. 366 billion (USD 4.3B), and which it is estimated will produce up to 1,000MW after it is commissioned in 2022.
Through a public-private partnership deal with Africa Geothermal International Kenya (AGIL), Kenya intends to increase its geothermal capacity by over 140MW by the year 2018.
Wind energy is also relatively underexploited despite the country’s several sites, already identified, surveyed and confirmed to be commercially viable investment opportunities.
Our work within the energy sector draws from our capabilities in the following areas:
In the areas of strategy, we have worked with different organisations within the energy sector to develop corporate strategy and other interventions aimed at enhancing sustainability in the energy sector.
Given the scope of investment and operations in the energy sector, we also, in addition to independent and organisation-specific strategic initiatives, we also model public-private partnersips (PPPs), through which stakeholders are able to give energy projects and other cross-cutting concerns concerted approaches.
Both routine operations and project avtivities within the energy sector are frequently executed in a project environment. Our work in Assurance supports energy sector projects to guarantee achievement of desired objectives.
Organisations in the energy sector are characteristically large and capital-intensive. In this regard, whether in consideration of extraction, generation, storage, distribution or general management and administration of operations in the energy sector, we work with organisations in the energy sector to develop human resource capacity at various levels and to enhance performance management processes.