Thursday, April 12, 2018

Kenya: Plans to Replace Feed-in-Tariff System With Energy Auction Tariff

Kenya to scrap current feed-in-tariff system (Kenya Broadcasting Corporation)

Kenya plans to scrap the current feed-in-tariff system and replace it with an energy auction tariff that will see the government award energy contracts to companies’ offering the lowest electricity tariffs.

Director of Renewable Energy at the Ministry of Energy Isaac Kiva says the auction model will replace the current feed-in-tariff system where investors identify potentially viable power projects and then acquire licenses to operate them at predetermined rates.

For the last ten years, Kenya has been using the feed-in-tariff model where investors interested in investing in wind power, geothermal, solar, hydropower and biomass energy sources are offered a power purchase agreement to construct the power plant and sell the electricity to Kenya Power.
However, the model has been criticized as being responsible for making power tariffs expensive.