Finding Our Way Round The Energy Challenge; An In-depth Look At The Energy Sector In Kenya.
Last week, my discussion with two of my friends at the Fire Sight Chat centered itself on energy. To begin with, we had to agree if as a country we have an energy shortage or an energy crisis. A shortage often means something is in short supply whereas a crisis means something is unstable and unreliable. The Standard Gauge Railway (SGR) could not be electrified because our electricity as one form of energy is not reliable. AS a fact, we are producing around 2300 megawatts of electricity and there has been a recent rise in the need to increase our capacity to 5000 megawatts by year 2020. That is clear that we have a shortage.
In the recent past, we have seen a number of companies close their manufacturing operations in the country because of the high cost of production or perhaps increase in competition from cheap imports. If the cost of production (COP) were low, the pricing could be competitive hence wipe out the imports but because the costs are ever high, it is as well as vision for whoever knows how long before COP comes down.
There are a number of available forms of energy we need to exploit largely. Wind, solar, biomass, nuclear and waste-to-energy are some of the forms under-exploited in the country right now. Looking closely at these forms, you realize I didn’t include hydro power and coal energy. Hydro power is not going to be sustainable any more due to the changes in climatic seasons. This has led to increase in droughts and a subsequent decline in water levels in our dams which in turn translates to unreliable power output. We can change this story by becoming aggressive with climate change and environmental conservation. Green and clean energy is the way to go. With the pre-mentioned initiatives, coal energy does not qualify to be a modern form of energy. While trains were using coal in 1800’s, past 2000’s trains are using electricity.
We discovered oil in Turkana which is also another of energy. The reservations with this discovery is that we are exporting the crude and importing back the refined oil. One African man, Aliko Dangote, has seen this problem and has decided to invest in a 12billion dollar refinery to tap the African oil market. It is estimated to provide a whopping 60,000 direct jobs not mentioning the indirect jobs. As a country we need to take a seat back and see what we can do with our oil. We set up a refinery and we have all the oil from Uganda, Ethiopia and the other countries. The ripple effect comes playing. We provide jobs, we export the refined oil to our East Africa neighbors and hence increase the direct foreign exchange income.
More countries are turning to green energy and we should not be blind to this noble cause. To begin with, we will need to clear any mess we have imposed on our environment. The government recently passed a policy that bans use of plastic paper bags. Through the process of pyrolysis, we can clean the environment and use the waste plastic paper bags to produce energy. Biomass on the hand is a whole new section. Take for instance the water hyacinth in Lake Victoria, we can harvest it and use it sustainably to produce biomass energy. This means that we can clean up any mess we have immersed ourselves in and turn things round to our advantage.
Nuclear power is another form of energy we are intending to invest in. The government signed an agreement with four other countries on a nuclear plant investment worth 5 billion dollars. Other countries explored this segment early enough and have had a lot of advantages to themselves. China has almost 20 nuclear energy plants. The disparity in the energy consumption within the continents can be expressed with the inappropriate energy segments we have decided to explore. Africa as a continent consumes around 181 gigawatts against around 15,000 gigawatts consumed by the USA and Around 6,500 gigawatts in Europe. The little consumption in Africa shows there still remains a lot of potential for the many upcoming potential entrepreneurs.
Social-economic impact of the energy challenge.
The energy problem in the country has made it hard for our products to compete competitively with other cheap imports. It increases the cost of production which leads to local companies closing down on their operations which at the end of the day leads to loss of jobs. Once we have a reliable energy in the country, we increase the capacity of our people to invest in segments that have largely remained unexploited like ore processing. More jobs will be created and there will be a drastic increase in the people who become self-employed.
Another problem is that we limit ourselves to the exposure of a fast changing world. With a sustainable and reliable energy we can enhance research and development. World class research centers use very big machines which consume a lot energy but provide quality and sure results; reliable energy is a must. There is a direct relationship between the amount of energy available and the quality of research output per country.
With limited energy, we limit the growth potential of our mSMES. With reliable energy, most mSMES can be able to automate their processes which at the end of the day enhances efficiency, quality and the amount of output per an industry. Also with such reliable energy, available to the majority of the people, ICT segment gets developed. Communication and sharing of information gets improved and we open our mSMES to the outside world. With such avenues open, creativity and innovation even at the lowest end helps develop the economy.
Once our energy is enough, efficient and reliable; manufacturing will widen and open up massively. We will begin to see increased amounts of jobs to our people. Our natural resources will create opportunities and be exploited by ourselves and our economy becomes self-sufficient. ICT will massively develop and hence we will be the regional hub for data and information processing. A regional hub in manufacturing for all industries. A regional hub with the strongest economy surpassing Nigeria and even South Africa. We are up to the task. Let us cheer ourselves on.
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