, NAIROBI, Kenya, Feb 17 – The Rural Electrification Authority (REA) says it is piloting a business model for powering Kenya’s villages using renewable energy.
The project, being carried out together with the Ministry of Energy and Japan International Cooperation Agency (JICA), seeks to promote commercial use of renewable energy as opposed to the regular home consumption.
REA Chief Executive Officer Zachary Ayieko said the programme is being designed to ensure that it offers institutions incentives for commercial sale of electricity generated to households, businesses, and other customers.
The project will include setting tariffs that are commensurate with consumers’ ability and willingness to pay and, if necessary, providing capital subsidy to assure the operator gets a reasonable profit.
“Once it is established that connecting an un-served community via national grid extension is not viable, we will determine which decentralised technology or mix of technologies are suitable,” Mr Ayieko said.
JICA is expected to offer technical assistance in design and feasibility studies, training, and social organisation. The objective is to develop a system of incentives sufficiently attractive for private sector to do business in off-grid areas.
The government as well as donors will provide funding for the public and community-services facilities. Solar will be the predominant energy source for individual households in off-grid areas.
“The plan is to allow households to charge their batteries with regular payment commitment. For diesel or hydro mini-grids in off-grid electrification areas, adding battery charging stations makes economic sense as they have close to zero marginal cost when demand is lowest,” Mr Ayieko said.
The government has announced that it has set aside Sh162.6 billion to fund energy development and power distributions in the country.
Mr Ayieko said the target for REA is to connect all major trading centers, schools, community water supply works and health centers and one million households over the next five years.
This is expected to increase actual connectivity to about 22 percent and accessibility to above 90 percent by 2013.
It is expected that by June, REA will have connected 13,800 of a total of 20,000 public facilities in the country increasing the level of connectivity to about 12 percent.
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