Industry Trend Analysis - Natural Gas Key To Meet Growing Power Demand - FEB 2018

BMI View: The introduction of n atural g as for power generation and the potential expansion of domestic gas production will help Kenya achieve its ambitious goals to increase the country's power generatio n capacity to 19,000MW by 2030.

Kenya's power generation capacity is dominated by geothermal, hydropower and renewables. The country intends to introduce LNG into its energy mix, offsetting the use of fuel oil which currently makes up over 28% of the overall mix used in electricity generation. Kenya currently does not produce gas, however, with several smaller gas discoveries in rural areas and a pipeline of early-stage exploration projects expected to start in early 2018, the country's future as a natural gas producer is yet to be confirmed.

Kenya's electricity demand is set to increase in the coming years, supported by growing population and implementation of large industrial projects, which will require significant electricity use. As part of the country's Vision 2030, the government plans to expand its power generation capacity to over 19,000MW to allow every rural community access to electricity by 2030. The introduction of LNG could help the government achieve the goal, simultaneously reducing the country's reliance on fuel oil for power generation and diversifying its current energy mix away from the use of considerably more expensive geothermal and hydropower energy.

Reliance On Oil Set To Decline
Kenya Energy Mix (%)
Source: National Sources/BMI

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