Low pricing key obstacle for lack of investments in renewble energy projects
Low bulk power purchase tariffs are blocking private investors from developing low cost sources of electricity such as geothermal and wind power in Kenya.
Reported from Kenya, “Low bulk power purchase tariffs are blocking private investors from developing low cost sources of electricity such as geothermal and wind power.
An energy conference in Nairobi concluded on Monday that private investors were shying away from geothermal and hydropower because current tariffs could not cover the huge capital requirements and offer a return on the investment.
Most investors opt for thermal power which, though is cheaper to develop and has high returns, gets expensive in the long run when its impact on power bills inflation and the environmental damage it causes are factored in.
“Our proposal for nine US cents for wind generation has been rejected. Other competitors like South Africa offer investors 14 US cents. We cannot afford to match such tariffs without hurting the economy,” Energy permanent secretary Patrick Nyoike told the meeting, which was called to seek solutions in boosting the supply of affordable electricity at a time when the country is facing a power deficit and expensive electricity.”
Source: Business Daily Africa