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In this new Kenya Power report, we forecast that the country will account for just 0.62% of Middle East and Africa (MEA) regional power generation by 2014, with efforts to diversify supply away from hydroelectricity. BMI’s MEA power generation estimate for 2009 is 1,225 terawatt hours (TWh), representing an increase of 1.9% over the previous year. We forecast an increase in regional generation to 1,572TWh by 2014, a rise of 23.2% between 2010 and the end of the forecast period.
Thermal power generation in 2009 is estimated by BMI at 1,064TWh, accounting for 86.9% of the total electricity supplied in the region. Our forecast for 2014 is 1,293TWh, suggesting 18.8% growth in 2010- 2014 that reduces slightly the market share of thermal generation to 82.3% – thanks partly to environmental concerns that should promote renewables, hydroelectricity and nuclear power generation. Kenya’s thermal generation in 2009 was an estimated 2.3TWh, or 0.22% of the regional total. By 2014, the country is expected to account for 0.21% of regional thermal generation.
Direct burning of wood and waste materials, plus some renewables-based power generation, was the dominant energy source for Kenya in 2009, accounting for an estimated 78% of primary energy demand (PED), followed by oil at 20% and hydro with a near 2% share of PED. Regional energy demand is forecast to reach 1,075mn tonnes of oil equivalent (toe) by 2014, representing 19.3% growth over the period since 2010. Kenya’s estimated 2009 market share of 2.18% is set to reach 2.42% by 2014. Kenya shares fifth place, with South Africa and Iran, in BMI’s updated Power Business Environment Ratings. Its position is vulnerable given the modest size of its market. Growth prospects are good and the proportion of renewables is the highest in the region. However, import dependency is also high and the power sector is not particularly competitive, with limited progress towards privatisation.
BMI forecasts that Kenya’s real GDP growth will average 5.32% a year between 2010 and 2014, with 2010 growth forecast to be 4.20%. The population is expected to expand from 40.0mn to 46.6mn over the period, with GDP per capita and electricity consumption per capita forecast to increase by 75% and 13% respectively. Power consumption is expected to increase from an estimated 5.8TWh in 2009 to 7.8TWh by 2014, providing an improvement in market coverage on the basis of 6.5% average annual growth in electricity generation over 2010-2014. Losses of more than 1TWh during power transmission and distribution mean the market is likely to remain tight for several years.
Between 2010 and 2019, we forecast a 75.7% increase in Kenyan electricity generation, near the middle of the regional range. This equates to 34.0% growth in 2014-2019, up from 31.1% in 2010-2014. PED growth is set to rise from 28.7% in 2010-2014 to 30.8% in 2014-2019, representing 68.3% for the entire forecast period. From 2014, the availability of coal-fired power is one key element of generation growth. Thermal power generation is forecast to rise by 114% between 2010 and 2019. Details of the longer term BMI power forecasts can be found later in this report.


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