“I would say that Africa’s energy future is not predetermined. Whenever people talk about preparedness, they are usually looking at it from the perspective of how Europe and other developed places have made their transition.
The assumption is always that Africa is supposed to follow the same path. I say we don’t. I look at telecommunications as an example, where we took our own path and we were able to achieve universal access by following a path of travel that other countries were not following.”
AfricaLive.net talks with Andrew Amadi of the Kenyan Renewable Energy Association regarding Kenya’s energy future.
How would you define the identity of KEREA? What makes up your DNA?
Andrew Amadi: KEREA is an umbrella body for the promotion of renewable energy in Kenya and beyond. We work to address the challenges of growth and uptake of renewable energy from two perspectives. One is the environmental need and also the economic advantages renewable energy can bring.
We work to address the barriers, one being the enabling environment that’s the policy, regulatory and legal structures that we are operating in and the other is promoting access to finance to promote models that can scale up renewable energy.
AfricaLive: On an economic level, what impact do you have on the wider economy in the markets you operate?
Andrew Amadi: We are a membership organisation and we don’t necessarily assess the impact of our members. We look at the impact being made by the sector in general. Some of the impact can be when we have 92 percent plus of the energy being produced from renewable sources.
At the moment we have about 33 percent of the 76 percent of national electricity connectivity being in off-grid solar. This represents a tangible impact made by our sector. The next step is to focus on transportation so that we can see to it that 5% of all imported vehicles are electric by the end of 2025, going towards 50 percent by 2030 if not 100 percent.
AfricaLive: You mentioned the electric vehicle which seems to be the next frontier for renewable energy in Africa. How would you rate Africa’s preparedness as we look to drive green as a continent?
Andrew Amadi: I would say that Africa’s energy future is not predetermined. Whenever people talk about preparedness, they are usually looking at it from the perspective of how Europe and other developed places have made their transition.
The assumption is always that Africa is supposed to follow the same path. I say we don’t. I look at telecommunications as an example, where we took our own path and we were able to achieve universal access by following a path of travel that other countries were not following.
I say immobility is anyone’s game as long as you can come up with the right business models to enable the transition. Everyone thinks of immobility from the view of connection to the national grid but this can be achieved 100% off-grid. This is because, by definition, electric vehicles are just batteries with wheels which means you can charge them from anywhere with solar.
Grid stability here is a plus, not a prerequisite. So you can roll it out with a data-driven approach just using mounted solar which is available anywhere on the continent. Even if we were to connect to the grid, the kind of systems that would be required to mitigate things like grid stability are not that complicated. You would just need a charging port which is a plug that fits into your vehicle.
If you want to maintain grid stability, you can put in place battery storage and set your period of autonomy. That would completely insulate the grid from external shocks and at the same time, you can have that system with its own autonomous solar generation system that can service a fleet of vehicles. This can be rolled out rapidly across the continent.
AfricaLive: Could Africa have an advantage as the world shifts to renewable energy, and does the lack of cumbersome legacy systems give us an edge especially when it comes to electric vehicles just like it did in the telecommunications arena?
Andrew Amadi: As a matter of principle, Africa has an advantage that it has never had before. The cheapest electricity in the world today, is daytime solar in Africa. It is cheaper in Africa simply because of the number of sun hours available on the continent. This is a very abundant resource that if channeled properly becomes an economic advantage in global trade and business.
If we have the potential for the cheapest electricity, we also have the potential for the cheapest transportation. 40 percent of the national reserves of foreign currencies are used to purchase and import petroleum products. If a large amount of that cost is alleviated in African countries, it creates a system that is immune to fossil fuel-based inflation. We would also have access to tremendous opportunities and competitive advantages in global economics.
AfricaLive: Amid growing calls for sustainability in every area of human endeavor, what is KEREA working on to address the sustainability question?
Andrew Amadi: Sustainability for us has two components. One is the school of thought that sees sustainability as something that has to come at a cost. Since we are talking about moving away from the extractive economy to the circular economy, it looks like a cost to some. The data however shows that it’s going to be very costly for the planet if we persist with the extractive economy.
If we look at the climate convention, developing countries in Africa are not responsible for the impact of climate change in terms of the emission of greenhouse gases. We are, therefore, not obligated to use cleaner sources of energy but we can choose to do so without being disadvantaged.
The combination of innovation and economies of scale has greatly reduced the lifetime cost of solar energy to make it the cheapest source of energy in Africa and the rest of the world. We do not have the massive industries and the large number of vehicles per capita that the developed world has, so we want to develop our industries at our level of comfort.
We anticipate that the population of Kenya will double by 2050 or 2060, this will mean an exponential growth in the demand for energy. With this in mind, we must note that Africa has more of any type of renewable energy source available in the world. We have 40 percent of all the world’s solar that is incident on land during the day. This must be taken into our planning and thinking and turned into a competitive advantage.
We are beginning to do this because we have industries today that run during the day on solar. If we set up manufacturing industries that run on solar alone, the cost of electricity for production would be cheaper than any subsidised fuel anywhere in the world. This is because the cost of generation would be less than 2 Kenya Shillings per kilowatt-hour.
That is just the cost of generation of solar electricity over a lifecycle without factoring in profit and margins. Even if we were to factor in 100 or 200 percent profit margins, we would still be able to deliver electricity at 5 Kenya Shillings per kilowatt-hour.
What would that mean if we could produce for 2,990 hours a year at 5 Kenya Shillings per kilowatt-hour when our closest competitors are producing at 7 or more Kenya Shillings per kilowatt-hour yet they are subsidised? This would be a huge advantage for Kenya and is the direction we are going into.
It would help us greatly in our farming where farmers have been unable to connect their irrigation projects to the national grid because of high costs. With solar, they are now able to do it, and that can help us irrigate more land, especially in arid and semi-arid areas to boost food production.
In 2019, Kenya imported food worth more than the petroleum products we imported that year. We cannot claim any credentials as an agricultural country when we are a net food importer. Renewable energy affords us the chance to confront this issue systemically and exhaustively.
Over time we have learned that the key to scaling renewable energy solutions is ensuring our solutions go hand in hand with efficiency. The reason Kenya has been able to achieve almost universal access to electricity is that the light bulb is now very efficient. It went from taking 60 to 100 watts to requiring only 5 watts. That efficiency means that the service becomes available and affordable.
The solution therefore to scaling these solutions is to bundle them efficiently, factoring in intermittency and plugging it into the end-use. We must though, have all the necessary appliances available for us to do so. There must be the availability of water pumps, driers, and other machinery.
Appliances must be availed cheaply, because if we put together the right infrastructure yet the end-user cannot afford a 5 Usd solar lantern, the problem there is no longer accessibility of renewable energy sources but rather a problem of economic deprivation.
AfricaLive: Do you see renewable energy sources replacing the traditional hydroelectric grid that Kenya has relied on for so long?
Andrew Amadi: It is not about replacing hydro energy, it’s about complementarity. It’s the same as our telecommunications story as a country where initially, the only way of accessing telecommunication was to be connected with copper wires. That has been the story with electricity until 2018 when we launched our national electrification strategy. The government included the use of off-grid solar in this plan and that has led to 30 percent more people being connected to electricity.
Today, it is possible to get electricity connections that are many times cheaper than on-grid electricity. There are many applications that are working on this alone and it can be deployed very quickly. Other renewable sources like green hydrogen are also becoming cheaper and more accessible. Green hydrogen would mean that electricity can be generated anywhere that has water. That changes the design of future energy planning if all that’s required is water.
We have semi-arid areas like Marsabit county where we did an exercise to determine their energy demand based on the county’s integrated development plan. If we were to scale up their plans which were centered on the dairy, beef, and leather industries, and do ratios in terms of how much land is needed for feed and water for irrigation; we found that the county would be able to absorb 4,400 megawatts of electricity which is double the total peak demand for the whole country. The county only has a mini-grid despite having the largest power plant in the country.
It is possible to address the demand the county would have by using a combination of solar and biomass to generate cheaper electricity compared to the hydro national grid. We could also deploy energy sources derived from invasive crops like the Mathenge and the Hyacinth.
This is where complementarity comes in, where we have circumstances that need other energy sources to satisfy demand in a cost-effective way. So we can combine a biogas system with a solar system to produce both heat and electricity and create a microgrid. We can then interconnect microgrids and create a smart interconnected grid system without having to first build a grid which is very expensive and may not be feasible in parts of the country.
At the moment, Kenya is mostly consuming renewable energy for domestic usage but that will not contribute significantly to the economy. We must deploy renewable energy sources to push our national agenda in terms of manufacturing, food security, and import substitution. We can then go to the global marketplace and offer products that have been made using renewable energy sources. Providing carbon-neutral products would give us an advantage over other producers in the world.
Our energy planning must therefore be predicated on the fact that we have; the cheapest renewable energy in the world, and we have plug-and-play manufacturing systems that we can leverage to increase production. Our Olkaria steam plant has been in operation for two decades now, we can start to incorporate that steam to add to our energy sources and set ourselves up to compete favorably.
The technical path is clear, so we must now fix the policy side of it by including the political class in our discussions. They must understand the money that we could save if we pursue this correctly. At the moment, we have 8 million households connected to mains electricity with 6 million of these only using 15 units of electricity a month. If you factor in the cost of setting up these connections in the first place, you will find that a lot of wastage has happened.
We can use a demand-driven approach to create a solar mini-grid that can service our energy needs while also contributing to value addition. We also have to be innovative enough to use renewable energy to service our future needs because our population here in Kenya will double in the next 40 years. We cannot have our population growing two-fold with the same resources, we must grow our resources as our population grows.
Stand-alone solar can be used to address these future problems if we, for instance, increase the acreage of land under irrigation using solar. Milling can also be done using stand-alone solar and this will see costs go down. If we can produce with solar energy the food items we currently import, we could save as much as 440 million dollars a year.
AfricaLive: AfricaLive works to foster partnerships between governments, the private sector, and universities. What do partnerships mean to you?
Andrew Amadi: When we were developing our strategic plan at KEREA, we had been operating as an exclusive club and only a few would participate. We changed this by operating through working groups. The working groups do not have a membership requirement to participate.
All you need is to have a stake in the sector. The first point of any kind of change or transition is being clear on the issues. A fact-finding analysis was done and completed which produced a document known as the Roadmap to Mobility for Kenya.
It was recommended that the contents of the document be actualised through working groups. Even before the document had been promulgated, we had signed an MOU with the Africa Electric Mobility Developers Association to work together in promoting the uptake of immobility, powered by renewable energy. We opened up this working group to everyone including experts, enthusiasts, and financiers. The working group would then identify challenges and ways to solve them.
We have recently gone into partnership with the public sector as well, as one of the ways to unlock the power of immobility in Kenya. We referred to an analysis done by the SNV Netherlands Development Organisation after doing four studies, two in Kenya and two in Uganda, Ethiopia, and Kenya on how to scale up the productive use of renewable energy.
We used the findings as a basis to interrogate our strategy. Our strategy includes all the renewable energy sources. We have the solar, wind, biomass, and biogas sections each with well-identified opportunities for growth.
We will meet various stakeholders for a kickoff meeting on the 20th of this month to discuss these opportunities and go into mapping value chains. This meeting will help address the challenge we have had which is working in silos. For instance, we have an irrigation policy that sits in the Ministry of Water but there is a need for agricultural inputs for irrigation in the Ministry of Agriculture and the need for renewable energy.
We the players on the renewable energy side have managed to get solar panels exempted from duty and VAT to lower that initial cost but the pumps and irrigation equipment are yet to be exempted. We now must leverage partnerships with players in the public sector to get these exempted since we are a water-scarce country that wants to move from 1.9 percent to 5 percent of land under irrigation.
To achieve this, we must reduce the barriers to irrigation. The barrier currently is the 40 percent duty plus 16 percent VAT on water pumps. We should not be taxing water pumps when we desperately need water for food security.
We also have a working group on advocacy that any organisation can join and is the group that successfully lobbied for tax exemptions on all renewable energy equipment. The lobby group included KEREA, The Association of Minigrid Developers, The Clean Cooking Association, The Global Offgrid Lighting Association, KEPSA, and other partners.
Working with partners like these ensures that we have a well-thought-out approach and not a reactionary one. It then becomes possible to have desired legislation proposals ready before the government approves them. That means putting ourselves in a position where we have the government reacting to what we propose instead of reacting to what the government does.
The past few weeks have seen us engage with the two main political campaigns in Kenya ahead of the general elections through KEPSA. We brought out our thoughts on renewable energy and have had been received well by both campaigns.
We are also looking at our partnerships with donors in a unique way. Instead of waiting to present proposals to funders, we are working with them to design solutions that they can get behind. This is the meeting I am going into next, looking to fund rooftop solar solutions for both small and medium-sized businesses in Kenya.
AfricaLive: An increasing number of companies are starting to take advantage of the benefits of the African Continental Free Trade Agreement.
Is increased intra-African trade a key part of development both for your company and the wider Kenyan economy?
Andrew Amadi: I have been interested in the energy industry since my high school days. One thing I’ve learned in all those years is that energy is about scale. The rooftop solar project for businesses that we are pushing is predicated on the fact that most businesses operate during the day. It is also predicated on the fact that we have the best value proposition for predictable and cheaper electricity. We can roll out a single project in the East African community and it will have a massive scale throughout the region.
That would give us the ability to go before the same investors who committed a trillion dollars during the Paris climate change summit for the development of clean energy and climate change mitigation in Africa. We can then raise a ticket worth 300 to 400 billion dollars by servicing the markets in our region.
The AFCFTA also makes it easier to make payments across boundaries because we are no longer limited by the physical and political boundaries. Scaling helps us build the best products, at the best prices, with the best financing terms.
The limits we may have had to contend with are the contractual ones because different jurisdictions have different policies. In Kenya for instance, we may soon see each county coming up with an energy development plan. Conditions for installing rooftop solar in Taita Taveta County may not be the same as conditions for installing rooftop solar in Kisumu County. AFCFTA makes it all one big market and eliminates the need for different standards.
AfricaLive: What would your message to the international audience be?
Andrew Amadi: We all know that Africa is mineral resource-rich but Africa is also renewable energy resource-rich. When you combine these two, Africa becomes the future of sustainable production and the future of the Fifth Industrial Revolution. Industry 5.0 is people-driven and also modular and data-driven. It is also circular in terms of economy and driven by renewable energy. Africa is in an advantageous position because we do not have legacy industries in existence.
We are therefore able to design our industries in a clean and renewable way. Our continent, therefore, represents the next frontier not just for providing raw materials but also for adding value. The AFCFTA agreement allows us to participate in the global marketplace without protectionism and political barriers that would weigh us down.
AfricaLive: What are your main goals for the year ahead? What is your primary long-term objective?
Andrew Amadi: As the CEO of KEREA, I have taken on the vision of seeing 5 percent of our vehicles being electric by 2025. I have put this on my calendar and will be held accountable for this. I can also project that in the future, off-grid standalone energy systems in Africa will be bigger than the national grids. I see this happening as soon as ten years from now.
This will be such a game-changer because just like in telecommunications where we were not encumbered by wire connections, we will not be encumbered by the connections of wires to deliver electricity where it is required.
In that scenario, we will be able to have rapid productive use of renewable energy in marginalised areas. I see Africa going from a net food importer to a net food producer with renewable energy despite the population growth coming in the future. I see the predominant source of energy in Kenya by 2050 being renewable energy.