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Introduction Kenya depends on four types of energy sources, namely electricity, wood fuel, petroleum products and renewable energy. The bulk of the country’s electricity is derived from water, hence the close correlation between energy and water resources. The government’s energy policy is to ensure availability, accessibility and cost-effectiveness of the commodity. Given the fact that the energy sources are exhaustible, the target is to optimise energy use to ensure sustainability. Water is essential for human, animal and plant life. It is used for agriculture, industrial and commercial purposes. The country depends on the Indian Ocean, lakes, rivers and wells, which large depends on rains. The changes in weather patterns characterised by many dry months have seen drastic reduction in water sources. The main challenge the government faces is provision of clean and safe drinking water and have sustainable water sources that can support human, animal and plant life. Energy resources The energy sector reported mixed results in 2005 due to drought that affected hydro-electric supply and also the rising cost of imported fuels arising out of the money and oil fluctuations at the international market. This had the overall effect of increasing fuel costs, with mostly pump prices for petroleum products going up by bigger margins. For example, the average price of Murban Adnoc crude oil from Saudi Arabia rose from US41.4 per barrel in September 2004 to US61.1 in September 2005. The sharp increase in the oil prices was also associated with political risks, rising global demand and disruption in the US of oil plants by bad weather. In terms of administration, the Ministry of Energy is responsible for the management of energy resources. The ministry formulates policies and provides supervisory roles while specific activities are carried out by various parastatals such as Kenya Power and Lighting Company, Kenya Energy Generation Company [KENGEN], Kenya Pipeline Corporation and National Oil Corporation of Kenya. There are also private and independent organisations involved in the provision and management of energy resources. The Ministry of Energy is currently working on a new national energy policy covering the period 2004-2023 aimed at attracting private investors, lowering costs of production, increasing exploitation of indigenous resources and providing equitable access to quality energy services while maintaining safe environment. The policy also focuses on diversification of energy sources and decentralisation of energy management.
The Kenyan oil market is currently served by eight private companies and their total sales in a year were 2.3 million cubic metres. If everything goes to plan, then the deregulation of the oil industry will see the entry of many more new players, with the possibility of the fuel prices going down.
During the year, petroleum products recorded price fluctuations and that had an impact on the economy. Higher prices led to increase costs of transport and consequent rise in commodity prices. On average, the pump prices oscillated between KSh65 and KSh75, fuelling public outcry that compelled the government to intervene to have the costs reduced. The main reason for the high fuel prices was attributed to the high cost of imported crude oil in view of the volatile situation in the Middle East. It was also attributed to the poor performance on the Kenyan Shilling against the hard currencies. Petroleum sub-sector faces many challenges, including high costs that reduced fuel consumption, dumping of export fuels in the domestic market, and adulteration of motor fuels with kerosene by unscrupulous traders. A number of steps are being taken to combat these vices, and this includes random checks at market outlets to identify and penalise retailers for either selling diverted or adulterated products. Further, operators found adulterating the oils are put on notice with the warning that when caught, they will have their licences cancelled. Electricity Electricity was clearly still the main source of electricity, accounting for about 54 per cent of the total supply, but geothermal and thermal sources also increased their supplies to 19 per cent and 25 per cent respectively in 2004/5. Previously, hydro-electricity accounted for 67 per cent of electricity supply while geothermal and thermal provided 16.2 and 16.8 per cent respectively. The long-term goal is to have geothermal and thermal energy sources contributing 280 MW, to add to the national power generation capacity. As was in the previous, the construction of two projects whose output is estimated at 108 megawatts (MW) is still under construction and is expected to start operation by 2007. These are the geothermal projects Ol Karia near Naivasha in the Rift Valley and Sondu-Miriu power plant with a capacity of 60 MW. There are also ongoing rural electrification projects, which are expected to increase electricity supply in the rural areas and boost their economic activities. Compared to other countries in the region, the cost of electricity is high in Kenya. For example, electricity costs about US 8.0 cents per unit while in South Africa, it is US 2.0 cents and US 2.7 cents Egypt respectively. Egypt and South Africa are major competitors to Kenyan goods in the region. Equally, it is estimated that about 20 per cent of electric power is lost in transmission while about 11,000 outages occur in one month. Boosting power production, according to government plans, include restructuring the Kenya Power and Lighting Company and Kenya Generation Company. The former is responsible for marketing while the latter produces electricity. In fact, by the beginning of 2006, the government had started the process of selling off 30 per cent of its shares in the KENGEN to the public in the process of privatisation of the corporation.
Wood fuels
Among others, woodfuel is used in the informal sector in rural areas particularly in areas like brick making, pottery, jaggery and food processing. In urban areas, woodfuel is used in form of charcoal. Government estimates indicate that about 80 per cent of household energy source in urban areas are from woodfuel. A number of industries also use large quantities of woodfuel, which they prefer because it is cost-effective. The industries are mostly agri-based and found in the rural areas like in sugar, tea and coffee growing areas. The main challenge about woodfuel is that it has occasioned massive destruction of forests and natural vegetation and that has a negative impact on the ecological and weather patterns. Destruction of forests and natural habitats have affected water sources, caused soil erosion and affected lives of animals, birds and insects. Other energy sources Water resources
The government through the Ministry of Water Resources Management and Development is responsible for the management of all water resources. The ministry is responsible for policy formulation, regulation and supervision. Since the enactment of the Water Act in 2002, the ministry has devolved its responsibility of water provision to independent organisations. The new policy provides for commercialisation of water programmes in urban areas while promoting community participation in the management of water resources in rural areas. Cumulatively, the devolution aims at encouraging private investment in water resources and also allowing communities to participate in the water provision and management processes. According to government estimates, about 75 per cent of urban population and 50 per cent of urban and rural communities have access to clean and safe drinking water. But due to increasing human and animal population and inadequate resources for expansion, water supply remains a major challenge to the government. Indeed, the country continues to suffer perennial water shortages with a freshwater endowment estimated to average 647 cubic metres per capita. To address the challenges in the water sector, the government has set out to: Conclusion However, if the government implements the year national energy plan, then it would be able to generate adequate electricity through hydro, geothermal and thermal sources and reduce the costs of power and fuels in general, with the overall benefit to the economy. It is not lost, though, that efforts are underway to redress these challenges with the accent being on conservation of forests and other water catchments to ensure steady supply of the commodity. The ongoing process of decentralisation and privatisation of water supply offers hope in the improvement of water supply. In privatising water supply and involving the public in managing resources, there is likelihood that there will more interest among the population in conservation and prudent use of the commodity to ensure sustainability.
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