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Kenya implements new PPA scheme to incentivize renewable energy

Kenya implements new PPA scheme to incentivize renewable energy Construction of Olkaria V geothermal power plant, Kenya Oct. 2018 (source: LinkedIn/ Roberto Razo)
Carlo Cariaga 15 Aug 2022

Concurrent with the lifting of a ban on PPA negotiations, the Ministry of Energy of Kenya is launching a PPA scheme that will leverage the country's renewable energy sources.

The Ministry of Energy of Kenya has lifted a ban on negotiations for new power purchase agreements (PPAs) while also providing clarifications to existing processes and approval mechanisms. This recent development is expected to spur investments into the renewable energy sector, including geothermal.

The ban on PPA negotiations was previously put in place by the Ministry to prevent increase in power bills due to idle capacity charges charged by independent power producers (IPPs). Accordingly, President Uhuru Kenyatta canceled all ongoing PPA negotiations under Kenya Power following the recommendation of a taskforce on power sector reforms.

Future PPA negotiations will be in line with the Least Cost Power Development Plan (LCPD). This system is designed to leverage the country’s renewable energy sources, thus providing more incentive to invest on the renewable energy sector. In line with this, the Ministry of Energy has issued guiding principles to LCPD for the integration of renewable energy and emerging technologies.

Earlier this year, KenGen completed the commissioning of the Olkaria I Unit 6 geothermal power plant, increasing Kenya’s installed geothermal power capacity to 944 MW.

Source: The Kenya Times