An estimated 63% of Total Primary Energy Supply (TPES) in Kenya is from biomass, 21% from hydrocarbons and 14.7% from geothermal energy. In electricity generated, geothermal accounts for approximately 47% followed by hydro at 39%. thermal (oil) at 13% of the total electricity generated. Geothermal energy dominates Kenya energy system with a substantial policy and financial support from the government.
Geothermal energy remains an attractive technology for Kenya because of its abundance, low-carbon emissions and climate-resilient nature. By continuously expanding it, it will highly contribute to Kenya’s nationally determined contributions (NDCs) to global climate change mitigation. Geothermal energy is also very crucial in Kenya’s determination to become an industrialised middle-income country based on green economy.
This study utilises the Global Change Analysis Model (GCAM) to assess the implications of government financial support in geothermal development on the electricity supply and cost.
The government policy on financially supporting geothermal energy development has increased the contribution of geothermal energy in the overall electricity mix in Kenya. However, this financial support has brought about market distortion hindering free competition of energy sources and withdrawing this support allows the market to correct itself and thus reducing the total input energy required to meet the same demand for energy. Diversification to other sources of energy has assisted the Kenya’s electricity power system meet the demand for power when the geothermal energy shares are reduced. Further, the financial support to geothermal sector has supported in keeping the final consumer tariffs low.