The Energy Act 2019 signed off by the President earlier this month calls for an integrated national energy plan every three years. A progressive energy plan that takes into account all viable energy supply options to ensure delivery of reliable energy services at least cost, and which is guided by appropriate technology. I emphasise progressive because of fast changing nature of energy technologies and investor options.
Although the law does not mention climate change directly, it is understood that Kenya shall play its roles according to global protocols and obligations which the country has signed.
In fact, the Act includes coal (a high carbon fuel) as one of the energy resources to be considered in energy planning. Therefore, the Kitui coal cannot be wished away.
Historically, energy generation planning in Kenya has not been sufficiently clear, often clouded by influence from investor lobby groups, and this has tended to make energy planning less objective.
The new law now requires inclusive consultation with the relevant stakeholders in developing and reviewing of energy plans. It also requires that inputs from county energy plans are taken into account.
Implementation of electricity generation projects is essentially a long lead time process which spans no less than five years from approval to commissioning. This makes it necessary to take longer term views during energy planning, while ensuring that we do not lag behind technological developments.
The largest mistake that has been made in the past is over-estimation of national electricity demands, an expensive mistake which has resulted in surplus carried power production capacity which has to be paid for by consumers. Whereas electricity supply should always lead demands- so as to provide a secure supply buffer- this must not be excessive.
A clear correlation exists between GDP growth and electricity requirements. Any planning mismatch between the two invariably results in expensive consequences – either stunted economic growth due to absence of adequate electricity, or high costs of carried surplus capacity due to insufficient demand. Electricity generation planning should therefore not be done in isolation from national economic planning.
Specifically, in recent years, the economy has not succeeded in delivering on critical energy intensive development which includes manufacturing; electricity based rail transportation; and sufficient household incomes to boost per capita domestic electricity consumption.
Going forward any power generation that is based on “imported” resources (coal, fuel oil, and liquefied natural gas-LNG) should be de-emphasized in any future energy plans.
Imported energy upsets Kenya’s balance of trade and payments. There is however nothing benign about using locally produced fossil fuels (including coal) to generate our electricity, as long as the country has other projects and programs that compensate on carbon reduction.
It is also becoming more than mandatory for Kenya not to include more hydro generation (local or imported) in our future energy plans. Crossing River Tana last weekend revealed a river that is literally empty, meaning that soon we shall have to pay more for generation from imported oil. Hydrology is becoming unpredictable.
Geothermal, wind and solar are clearly the areas to be prioritised and which must be ring-fenced from competition from imported energy resources. Nuclear remains an energy source far ahead of our times, especially for an economy that is not growing fast enough.
The danger here is a rushed commitment of nuclear generation, potentially crowding out the more conventional renewable sources- geothermal, solar and wind
Turning to technology, it looks like in another five years time solar will have become an accepted “base-load” grid supplier. This will be made possible by the ongoing advances in battery storage technology which is currently heading for 100 megawatt capacities.
It will be possible and economical for daytime solar generation to be stored for grid injection during peak demands.
We should also not forget that in ten years time most of the passenger cars on our roads will be electrified thus creating huge new electricity demands.
Many possibilities and opportunities exist for consideration and inclusion in a new energy plan. Let us come up with the best power generation solutions that deliver least costs, quality, and security of power supply.
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.