Kenya’s daily electricity demand has surged to an unprecedented record high of 2,362.28 megawatts (MW) on July 23, signaling robust economic activity and a growing appetite for power across the nation. This significant increase from the 2,325MW recorded just weeks earlier on July 2 underscores the country’s accelerating industrial expansion, rapid urbanization, and rising domestic energy consumption. The milestone highlights Kenya’s unique position as a leader in clean energy, with its predominantly green grid successfully meeting escalating demand.

According to the latest data released by the Energy and Petroleum Regulatory Authority (Epra), the national grid is overwhelmingly powered by renewable sources, with state-owned power generator KenGen at the forefront. KenGen’s geothermal and hydropower plants delivered the lion’s share of energy, with geothermal facilities generating an impressive 13,678.35 megawatt-hours (MWh), accounting for 31.85 percent of the total energy supplied. Hydropower stations contributed significantly as well, delivering 10,915.93 MWh, or 25.42 percent of the national output.

“Combined, these sources accounted for over 57 percent of Kenya’s daily electricity generation, underscoring KenGen’s strategic role in delivering clean, reliable, and affordable power,” Epra affirmed in its statement. This strong performance by renewable energy sources positions Kenya as a global exemplar in sustainable energy development, particularly as the nation actively phases out reliance on thermal power.

The Surge in Demand: Kenya’s Growing Energy Needs

The record-breaking electricity demand is a direct reflection of Kenya’s dynamic economic growth and demographic shifts. Several key factors are converging to drive this escalating energy requirement:

• Industrial Expansion: Kenya’s manufacturing sector, a cornerstone of its “Big Four Agenda” and Vision 2030 economic blueprint, is undergoing significant expansion. Industries, ranging from agro-processing and textiles to cement and consumer goods manufacturing, require substantial and reliable power to fuel their operations, increase production, and drive job creation. As the government incentivizes local manufacturing and aims to boost industrial output, the demand for electricity from this sector is set to continue its upward trajectory.
• Increased Urbanization: Kenya is experiencing rapid urbanization, with a significant portion of its population migrating to cities and towns in search of economic opportunities. This demographic shift leads to increased energy consumption in residential, commercial, and public service sectors. New housing developments, commercial centers, public infrastructure (like street lighting), and the expansion of services all contribute to higher electricity demand. Urban areas are inherently more energy-intensive due to concentrated populations and modern lifestyles.
• Rising Domestic Energy Use: As disposable incomes grow and access to electricity expands, Kenyan households are acquiring more electrical appliances, from refrigerators and televisions to electric cookers and air conditioning units. This rise in domestic energy use, coupled with population growth, places continuous upward pressure on the national grid. The shift towards cleaner cooking solutions, including electric cookers, also contributes to this trend, reducing reliance on traditional biomass fuels.

This robust demand indicates a healthy underlying economy, but it also necessitates continuous investment in generation, transmission, and distribution infrastructure to ensure supply keeps pace with growth.

KenGen’s Green Backbone: Geothermal and Hydropower Dominance

KenGen, the largest power generator in Kenya, has been instrumental in shaping the country’s green energy narrative. Its history dates back to 1954, and it has evolved to become a leading producer of electricity from diverse sources, with a strong emphasis on renewables.

• Geothermal Power: Kenya is a global leader in geothermal energy, largely thanks to KenGen’s pioneering efforts in the Olkaria geothermal fields in Naivasha. Geothermal power, derived from the Earth’s internal heat, offers several distinct advantages that make it a cornerstone of Kenya’s energy strategy:
  • Baseload Reliability: Unlike intermittent sources like solar and wind, geothermal plants provide a constant, 24/7 supply of electricity, known as baseload power. This stability is crucial for grid reliability and industrial operations that require uninterrupted power.
  • Environmental Benefits: Geothermal power plants produce minimal greenhouse gas emissions, aligning with Kenya’s commitment to climate change mitigation and its ambitious target of achieving 100 percent clean energy by 2030.
  • Cost-Effectiveness: Once developed, geothermal energy has low operating costs, making it an affordable and predictable source of power in the long term.
  • Indigenous Resource: Geothermal energy taps into an indigenous resource, reducing reliance on imported fossil fuels and enhancing energy security.
• Hydropower: Kenya’s hydropower stations, primarily located along major rivers, have historically been the backbone of its electricity supply. Hydropower is clean, renewable, and generally cost-effective. However, it is vulnerable to climatic fluctuations, particularly droughts, which can significantly reduce generation capacity. The recent strong performance of hydropower suggests favorable rainfall patterns, complementing geothermal output.

The combined contribution of geothermal and hydropower, exceeding 57 percent of daily generation, underscores Kenya’s successful transition towards a largely green energy mix. This contrasts sharply with many other developing nations that still heavily rely on fossil fuels for electricity generation, often facing high import costs and significant carbon footprints.

Phasing Out Thermal Power: A Strategic Imperative

KenGen’s commitment to phasing out thermal power is a strategic move driven by both economic and environmental considerations. Thermal power plants, which typically burn heavy fuel oil or diesel, are expensive to operate due to volatile international oil prices. They also contribute significantly to greenhouse gas emissions and air pollution.

The challenges associated with thermal power generation include:

• High Fuel Costs: Reliance on imported fossil fuels exposes the country to global price volatility, impacting electricity tariffs and national foreign exchange reserves.
• Environmental Impact: Burning fossil fuels releases carbon dioxide and other pollutants, contributing to climate change and air quality issues.
• Operational Inefficiencies: Older thermal plants can be less efficient, leading to higher operational costs and maintenance requirements.

By systematically reducing its thermal capacity and replacing it with renewables, KenGen aims to stabilize electricity prices, enhance environmental sustainability, and bolster Kenya’s energy independence. This aligns with Kenya’s broader energy policy, which provides various incentives for renewable energy development, including tax benefits and supportive regulatory frameworks, as highlighted by resources like PVKnowhow.

Powering the Future: KenGen’s Ambitious 10-Year Renewable Energy Strategy

KenGen Chief Executive Peter Njenga has outlined an ambitious 10-year strategy to inject an additional 1,500MW of electricity into the national grid, entirely from renewable sources. This plan includes expanding existing geothermal and hydropower capacities, alongside significant investments in wind and solar energy.

• Geothermal Expansion: Given Kenya’s vast untapped geothermal potential along the Rift Valley, this will likely remain the cornerstone of KenGen’s expansion. Projects like the ongoing rehabilitation of the old Olkaria 1 power plant are critical. This rehabilitation, currently 50 percent complete, aims to increase its power generation from 45MW to 63MW by 2026, adding a crucial 18MW to the national grid. This demonstrates KenGen’s commitment not just to new projects but also to optimizing existing assets. Further phases of Olkaria and exploration in new geothermal fields will be vital.
• Wind Energy: Kenya has significant wind resources, particularly in areas like Turkana (home to the Lake Turkana Wind Power project, one of Africa’s largest). KenGen is expected to explore new wind farm developments to diversify its renewable portfolio.
• Solar Energy: While currently a smaller component of the mix, solar power offers immense potential, especially for distributed generation and off-grid solutions. KenGen’s strategy will likely include utility-scale solar projects to complement its baseload geothermal and hydropower.

Achieving the 1,500MW target will require substantial investment, both from KenGen’s own resources and through partnerships with international financiers and development banks. The European Investment Bank (EIB), whose Vice-President Thomas Ostros recently toured the Olkaria geothermal area, has already pledged support for Kenya’s green energy ambitions, signaling international confidence in the country’s renewable energy sector. Such partnerships are crucial for mobilizing the necessary capital for large-scale infrastructure projects.

Kenya as an African Energy Leader: Exporting Expertise

Beyond its national mandate, KenGen is increasingly positioning Kenya as a continental leader in renewable energy development, particularly in geothermal technology. The company is actively supporting five other African countries in their geothermal exploration efforts, sharing its decades-old expertise and technological savvy.

• Ethiopia and Djibouti: KenGen has already successfully supported geothermal drilling operations in these Horn of Africa nations, demonstrating its capability to operate beyond its borders. Ethiopia, with its vast geothermal potential along the East African Rift System, is a key focus for expansion.
• Tanzania and Zambia: These are the latest countries to receive support from KenGen, with the company reportedly awarded exploration rights in both nations. This marks a significant step in extending Kenya’s geothermal influence southward.
• Eswatini: KenGen CEO Peter Njenga confirmed that Eswatini, which possesses high potential for geothermal energy, is the next stop for KenGen’s drilling support.

This “South-South cooperation” model is vital for Africa’s energy transition. Many African countries face similar challenges in energy access and reliance on fossil fuels. By sharing its proven expertise, KenGen is helping these nations unlock their own indigenous renewable energy resources, fostering energy independence and sustainable development across the continent. This collaborative approach aligns with broader African initiatives like the Africa Renewable Energy Initiative (AREI), which aims to accelerate and scale up the harnessing of Africa’s enormous renewable energy potential.

The East African Rift System, stretching from Ethiopia through Kenya and Tanzania down to Mozambique, is a geological goldmine for geothermal energy. Estimates suggest the region holds up to 20GW of geothermal potential, much of which remains untapped. KenGen’s involvement in these countries is not just about drilling; it involves comprehensive technical support, capacity building, and knowledge transfer, enabling these nations to develop their own geothermal capabilities.

The Broader Impact: Economic, Environmental, and Social Benefits

Kenya’s commitment to green energy and its success in meeting rising demand with renewables yield multifaceted benefits:

• Enhanced Energy Security: By relying on indigenous renewable resources, Kenya reduces its vulnerability to volatile global fossil fuel markets and geopolitical supply disruptions. This translates to more stable energy prices for consumers and businesses.
• Climate Change Mitigation: A predominantly green grid significantly lowers Kenya’s carbon footprint, contributing to global efforts to combat climate change. This aligns with Kenya’s international commitments under the Paris Agreement and enhances its reputation as an environmentally responsible nation.
• Economic Growth and Investment: A reliable and affordable supply of clean energy is a powerful magnet for foreign direct investment, particularly in energy-intensive industries and green technologies. It creates a favorable environment for industrialization and job creation.
• Job Creation: The development, construction, operation, and maintenance of renewable energy projects create numerous direct and indirect jobs across the value chain, from engineers and technicians to local laborers and support services. KenGen’s expansion and its regional drilling services also create opportunities for Kenyan expertise to be exported, generating additional revenue streams.
• Foreign Exchange Savings: Reduced reliance on imported fossil fuels translates into significant foreign exchange savings, strengthening the national currency and improving the balance of payments.
• Technological Advancement and Innovation: Investing in renewable energy fosters local technological capabilities, research, and innovation, positioning Kenya as a hub for green energy solutions in Africa.

The record electricity demand, met predominantly by clean energy sources, is a testament to Kenya’s forward-thinking energy policies and KenGen’s operational prowess. As the country continues its ambitious journey towards 100 percent green energy and expands its expertise across the continent, Kenya is not only powering its own future but also lighting the path for sustainable development across Africa. The focus on reliable, affordable, and clean energy is not just an environmental imperative but a fundamental driver of economic prosperity and social well-being for millions.

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photo source: Google

By: Montel Kamau

Serrari Financial Analyst

29th July, 2025