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KEPSA is the private sector apex and umbrella body set up in 2003, to bring together business community in a single voice to engage and influence public policy for an enabling business environment. over 500,000 direct and indirect members..
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KEPSA HOLDS ENERGY AND PETROLEUM MINISTERIAL STAKEHOLDERS FORUM WITH HON DAVIS CHIRCHIR
- Published On: 2023-02-22
KEPSA held a Ministerial Stakeholders Forum with Hon. Davis Chirchir, Cabinet Secretary for Energy and Petroleum on 22nd February 2022 at Kawi Complex, Nairobi. The meeting is part of the ongoing consultative meetings for beginning working engagements with the new administration.
Present during the meeting were Ms Carole Kariuki, KEPSA CEO; Eng. James Mwangi, KEPSA Director, Energy and Extractives; together with other members of the KEPSA Energy and Extractives Sector Board led by the Chair Mr George Aluru and the Vice Chair Mr Genesio Mugo.
The KEPSA team presented a proposal on how the private sector and the Ministry can work together to reduce the use of wood fuel which account for 70% of all domestic fuel used in Kenya. The use of wood fuel has negative health issues and big contributors to deforestation and it’s also contrary to the government’s plan to increase forestry tree cover. KEPSA also gave proposal on the best approach for increasing access to clean energy both for cooking and lighting.
On energy consumers, KEPSA’s proposal focused on improved quality and reliability of electricity supply, noting that by early 2022, the installed capacity for standby generator was approximately 5 Giga Watts.
The green hydrogen, which is a new entrant to the energy sector requires supportive framework to place Kenya at a strategic position to become the innovation hub and leaders of green hydrogen. The private sector presented proposals on how to partner with the government to realise this vision.
The private sector requested for the lifting of the moratorium of Power Purchasing Agreements (PPA) and feed in tariffs (FiT) for new projects. The team also requested the Ministry to support the private sector to prevent Water Regulatory Authority to increase the levy for the use of water for electricity generation from KES 0.05/kWh to KES 2/kWh.
Mid and downstream are some of the biggest consumers of the dollar currency in the country, requiring approximately USD 750 million per month. The private sector requested for intervention to ensure equitable distribution of the dollar currency.
On upstream, the private sector pointed out some of the challenges in the industry between different regulatory bodies and county governments. The private sector also requested for fast-tracking of field development plan for the Kenya joint venture which will unlock more investment in the sector.
In response to private sector’s proposals on clean cooking and reduction of wood fuel, the Cabinet Secretary noted that the Ministry will work with the National Treasury to utilise the adulteration levy charged in kerosene to incentivise clean cooking innovations.
While responding to the energy consumer concerns, Hon. Chirchir noted that the transmission and distribution system has not received good attention in terms of investment for a long time. He said that the new administration is working to ensure that there is quality and reliability of power.
The Cabinet Secretary assured the private sector that the Ministry will incentivise the production of green hydrogen by providing a supportive regulatory framework and will also work on the proposal to have a special tariff for production of green hydrogen especially in off-peak hours.
Speaking on electricity sector, the Cabinet Secretary promised to lift the moratorium on new PPAs and FiT. He also assured the private sector that the new Water Regulatory levy for use of water for electricity generation will not be effected because this will subsequently increase the cost of power generated from hydro by at least 25%.
On mid and downstream concern of the availability of the dollar currency for purchase of the petroleum product, the Ministry apprised the private sector that the government is working on a system that will ensure the Oil Marketing Companies (OMCs) will not be desperate for the dollar currency every purchase cycle.
The Ministry noted that it is working with the County Government of Turkana to create a supportive framework that will allow harmonised licensing and predictable tax policy for the sector. The Cabinet Secretary also promised to fast-track the process of approving field development plans.
As a way forward, the meeting agreed that the private sector and the Ministry will continue working together to address the concerns in the energy and petroleum sector to ensure that the sector is able to sustain the economy.