Solar Bankers is investigating the business opportunities in providing rural Kenyan households with a reliable and sustainable source of electricity. As already explained in previous discussions, rural electrification is pivotal to Kenya’s future economic development because of its benefits to social communication, living conditions, and industrial efficiency.
For this brief soliloquy we shall attempt to create an accessible case study, reflective of Kenyan energy demand, to compare the feasibility and efficiency of using different energy sources for rural electrification. We shall consider a rural Kenyan community of 10,000 people, and project onto this fictive scenario the data required to make broad comparisons between energy sources. Individual energy solutions will, primarily, be compared in terms of their financial costs, to give an idea of their economic efficiency. All calculations and outcomes are educated estimates, not intended to reflect definitive or absolutely precise realities, but to give an impression of the proportions and magnitudes involved.
The first and most fundamental aspect of the case study to be elucidated is the likely electricity demand/consumption of a rural Kenyan village of 10,000 people. We must assume that when a rural household, currently not connected to the energy grid, is provided with an access to electricity, its electricity consumption will be similar to that of a household which currently is fully connected. These households are now concentrated mainly in the urban centers of Nairobi and Mombasa. To then calculate the likely energy consumption of rural community only recently provided with electricity, a few pieces of data are necessary. For instance,
The total population estimate for Kenya in 2013 is 43,500,00.
Around 15% of Kenyans have access to grid-electricity.
The total annual electricity consumption in Kenya is 6.6 TWh, or 6,600,000 MWh.
This means that the number of Kenyans with access to electricity is 6,525,000.
One may then calculate the annual per capita consumption of those Kenyans with access to electricity:
(energy consumption) / (number of consumers) = 1.01 MWh/year/person
= 1010 kWh/year/person
Daily per capita consumption, hence, is:
1010 / 365 = 2.78 kWh/day/person
Then, the total daily electricity consumption of a community of 10,000 people is around 27,800 kWh.
The total installed capacity to supply the community may then be deduced by dividing daily consumption by the amount of hours energy is supplied every day. We assume energy is produced 24 hours per day, which implies that:
Total installed capacity required = 27,800 /24 = 1158 kW = around 1.2 MW
With a 20% capacity backstop, the total installed capacity required to supply a Kenyan community of 10,000 with electricity would be around 1.5 MW.
When considering the solution of solar energy, a sustainable and reliable energy supply is necessarily based on an energy mix. This is because average daily solar exploitation in Kenya peaks at around 6 hours, while our calculation assumes a daily exploitation of 24 hours. Geothermal energy – efficient, relatively inexpensive, highly available, and very suited for Kenya’s geological profile – should cover the hours of solar inactivity.
The availability rates of modern geothermal plants range, on average, between 80% and 90%. If we assume a geothermal availability rate of 80%, the community of our case study could theoretically be supplied with geothermal energy for 19.2 hours every day. One must, of course, note that an availability rate does not describe patterns of daily inactivity and activity. It usually describes the annual, or longer-term, availability of an energy source, taking into account broad and major periods of likely inactivity. But for the purposes of our calculation, we shall levelize the availability factor to describe more specific, daily periods of inactivity. This is not very reflective of reality, but creates a more accessible and workable theoretical scenario.
So, the community is supplied with geothermal energy 19.2 hours of the day, regardless of whether the plant continues to produce and store electricity, or shuts down. The solar component of our theoretical system has an assumed availability factor of 20%, and accounts for 4.8 hours of daily electricity production. This is deliberately less than the maximum availability mentioned earlier, ensuring the solar system does not have to consistently work at maximum productivity.
The total installed energy mix is, hence, comprised of 1.5 MW of solar, and 1.5 MW of geothermal energy. The cost of this system is then deduced on the basis of estimates by the US Department of Energy for the average levelized cost for energy plants. Costs are given in USD per MWh produced by the particular energy source. The calculations for system-costs are as follows:
Total system levelized cost = 99.6 USD/MWh
= 0.16 USD/kWh
Costs for the geothermal component of our proposed system amount to around 10 dollar-cents per kWh produced.
Total system levelized costs = 156.9 USD/MWh
= 0.16 USD/kWh
Total costs for the solar component are around 16 dollar-cents per kWh produced. The costs for the entire system, thus, amount to around 26 dollar-cents per kWh produced. And this rough estimate may be compared with the cost of producing the same amount of energy from coal or fuel oil.
In the case of oil, current prices render a fuel-based energy supply of a rural Kenyan community of 10,000 people economically very inefficient. The cost of oil by itself is already considerable:
C. Fossil fuel
The amount of residual fuel oil used to generate one kWh of electricity is estimated to be around 0.002 barrels. Now, we have hypothetically calculated the daily electricity consumption of a Kenyan community (of 10,000 people) to be around 27,800 kWh. The multiplication of the two quantities produces the community’s daily residual fuel consumption for purposes of electricity production – around 56 barrels. The price of oil is around 106 USD/Barrel. The daily cost of fuel used for electricity production is, hence, around 5430 USD. Converted, this is equivalent to around 20 dollar-cents per kWh of electricity produced. But this calculation considers solely the cost of the fuel used for production. To deduce the total system costs of production, significant O&M and capital costs for the fuel-based power plant would have to be taken into account. Also, volatile oil prices render the costs of a fuel-dependent energy supply uncontrollable.
Coal, on the other hand, is slightly cheaper than the renewable energy-mix in levelized cost, but of course bears several disadvantages.
Around 1.07 pounds of coal produce one kWh of electricity. Based on this assumption, the newly grid-connected community of our scenario consumes around 32207 pounds of coal every day for electricity production. This is equivalent to a daily consumption of 14.6 metric tons. If one assumes the current price of coal is around 60.40 USD/metric ton, then the daily cost of coal amounts to 882 USD. When compared to daily electricity consumption, these costs are equivalent to around 3 dollar-cents per kWh produced. But, again, this takes into account only the cost of coal. In fact, the purchase of coal for electricity production constitutes around a third of the total costs for an entire coal-based system. Consider, the estimated, average levelized cost for coal-based electricity production is around 100 USD/MWh, or 10 dollar-cents per kWh produced.
Coal, however, similar to fuel, makes energy production too dependent on the uncontrollable developments of international commodity markets. With ever-scarcer supply, the price of coal will tend to rise and Kenya, as an emerging economy, will have difficulty extending its influence on international markets to ensure a reliable supply of coal. So, coal-based electricity production, in the short run, appears to be economical – but in the long run it is neither reliable nor sustainable.