Exclusive interview with Engineer David Mwangi, well-known Kenyan energy consultant, session chair at the upcoming EAPIC 2014 and a member of the event’s advisory board.
1. Can we start with a short summary of your background in the power industry? What are you currently involved in?
I am an Electrical Engineer with 36 years of experience in the power industry. I worked in the Kenya Power and Lighting Company (KPLC) for 32 years from 1978 to August 2010, when I took voluntary early retirement to go into consulting practice. In KPLC, I rose through the ranks from a Graduate Apprentice to the position of Chief Manager, Planning, Research & Performance Monitoring, which I held for 9 years from 2001 to 2010. I had long experience and involvement in international and regional electric power affairs. I hold a BSc degree in Electrical Engineering from University of Nairobi and AM a Registered Engineer and a Member of the Institution of Engineers of Kenya.
Since retiring from KPLC, I have been an Energy Consultant and have provided a wide range of consultancy services in Kenya and eastern Africa. These include, among others, general advisory on energy sector and power sub-sector issues; technical and financial due diligence on projects; project preparation studies; project completion evaluation; advice on power purchase agreements, power system planning, power system studies for integrating wind power and other projects into the grid; and sharing lessons learned in Kenya in unbundling of the power sector and associated reforms and in private sector participation in power generation and distribution.
My current and former clients include 4 international and bilateral development finance institutions (World Bank, USAID, IFC and KfW Banking Group of Germany), 2 regional development organizations (Nile Basin Initiative (NBI) secretariat and NBI’s Nile Equatorial Lakes Subsidiary Action Programme (NELSAP)), Tata Power Company of India, 4 Kenyan and international prospective IPPs and Tanzania’s Energy and Water Regulatory Authority (EWURA). From mid June 2013 to end of June 2014, my main assignment has been providing support through a contractor to USAID in implementing President Obama’s Power Africa Initiative in Kenya, one of the six focus countries. I am on a new contract through another Contractor/Sub-Contractor to provide support to USAID/Kenya for one more year to June 2015 in a Power Africa Transactions and Reforms Program.
2. Which projects in Kenya and the region that you were involved in were particular highlights? And why?
Two projects come to mind. The first is a national project - the 300MW Lake Turkana Wind Power project - due to its apparent large size relative to the then projected total installed capacity in Kenya and the associated challenge of dealing with intermittency, the long (428km) 400kV transmission line needed to connect the project to the national grid, and the then new concept of the off-taker having to pay for deemed generation in case of curtailment of generation.
The second is regional - the Ethiopia-Kenya 500kV HVDC 1100 km 2000MW transmission line - due to the high investment needed, the novelty in the region of HVDC technology, and the complexity of negotiating a power purchase agreement between utilities in two countries.
3. What do you see as the main challenges in Kenya’s energy ambitions? And the region’s?
• Currently, inadequacy, high cost and poor quality of power supply.
• Delays in implementation of committed generation and transmission projects caused by difficulties in mobilizing requisite funds and, when financing becomes available, delays in obtaining right of way consents for transmission lines needed to evacuate power from generation projects.
• Unrealistic sector expansion planning – too high electricity demand forecast and resultant planned capacity as well as unrealistic assumptions of project implementation schedules and costs of fossil fuels. This ends up making the overall plan too costly due to unnecessarily large reserve margin. It also makes individual projects un-bankable as lenders are not convinced of the need for the project by the time it is assumed to come into service.
• Low level of access to electricity and high cost of extending grid supply to rural areas or establishing mini-grids in areas far from the national grid.
• Inadequacy, high cost and poor quality of power supply.
• Delays in implementation of generation and national/cross-border transmission projects caused by difficulties in mobilizing requisite funds and sometimes by delays in obtaining right of way consents. In other cases, countries take long to agree, especially on power tariffs, and the lenders’ approval processes for financing are lengthy.
• IPPs could assist in developing power projects but, in some countries, they have issues with tariffs that are not cost-reflective and off-takers that are not credit-worthy.
• Other challenges facing prospective IPPs in some countries include absence of enabling policy, legal, regulatory, institutional and commercial frameworks.
• Low level of access to electricity and high cost of extending supply to rural areas or establishing mini-grids in areas far from the national grid.
4. How do you see the role of renewables in reaching power generation targets?
In Eastern Africa, renewables currently constitute the largest percentage of total capacity. The challenge is that most of the capacity is in form of hydro, which is vulnerable to vagaries of weather. More and more countries are following Kenya’s footsteps in exploiting their geothermal potential. Moreover, countries are developing their wind, solar and biomass resources. For this reason and due to progressively high donors’ preference for financing renewable energy projects, I see renewables playing a pivotal role in enabling countries to reach their power generation targets.
5. What is your vision for the industry?
A robust regional and inter-regional power market, offering adequate, quality and affordable power supply and providing universal access to electricity by 2030.
6. What in your career so far has surprised you about this industry?
The pace of development of solar power technologies and of reduction in the cost/kW of solar PV.
7. You have been a regular contributor to EAPIC over the years and serve on the advisory board. What has been the role of EAPIC in the region’s energy development in your opinion?
EAPIC has been and continues to be an important annual forum where directors, managers and staff of utilities, financing agencies, governments, consulting firms, manufacturing companies , regulatory authorities, large electricity consuming entities and other power industry stakeholders meet to learn; educate; share experiences, challenges, solutions and best practices; and/or showcase their products.
8. You are chairing a session at the upcoming EAPIC on “Driving policy formulation for economic development” – can you share a preview of what delegates can expect during this session?
The session consists of two panel discussions, the first, titled “Regional regulation framework for stimulating cross border partnerships” running from 13.30 to 15.00 and the second titled “Will an unbundling model work in East Africa?”, from 15.45 to 17.00.
The first panel discussion will be preceded by two presentations of 20 minutes each. The first, by Peter Kinuthia, Senior Energy Officer of the East African Community Secretariat, will give an update of the EAC regional power master plan. The second will be made by Hindpal Singh Jabbal, former Chairman of Kenya’s Energy Regulatory Commission on an overview of Kenya’s power sector and least-cost generation planning. The ensuing discussion on “Regional regulation framework for stimulating cross border partnerships” will feature, besides Kinthia and Jabbal, eminent panelists including CEOs of regulatory authorities of Kenya, Rwanda and Uganda and the Coordination Centre Manager of the Southern African Power Pool (SAPP). It will focus on what is happening with the East African Power Pool; whether a regional regulator can work in East Africa; standards for equipment and power quality; and national interest vs. regional benefit.
The second panel discussion, on the topic “Will an unbundling model work in East Africa?”, will discuss the pros and cons of an unbundled energy model for Africa and will feature panelists from Berkeley energy , UK, Boston Consulting Group, USA, and Rural Electrification Authority, Kenya.
9. Anything else you would like to add?
I look forward to meeting and interacting with other attendees of the conference and to visiting the exhibition stands.