Kenya: Reasoning Behind the Move Away from Feed-in-Tarrifs

Kenya: Reports from Nairobi that competitive auctions will replace current feed-in tariff system in Kenya (Lexology)

(Courtesy CIA.gov)

Recent reports show that Kenya’s Energy Regulatory Commission (ERC) is in the process of drafting new regulations, which are expected to be implemented by the end of Q1 2017.

The new regulations are expected to introduce competitive auctions for awarding renewable energy projects in Kenya, shifting from the current feed-in tariff regime under the Feed-in Tariff Policy 2012 (revised in December 2012) which offers tariffs for small renewable projects up to 10 MW and for large renewable projects above 10 MW.

The main argument to move away from feed-in tariffs and adopt a competitive auction system is to introduce competition amongst project developers and investors in order to achieve lower pricing. The ERC believes that this new approach will encourage project developers and investors to reduce tariffs which ultimately benefits the end consumers.

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