Kenya is considering replacing its current feed-in-tariff system with an auction-based system in efforts to drive down electricity tariffs in the country. Auction systems have proven to favour price over base-load capacity, not favourable for geothermal energy.
Oketch said: “We are transitioning to the auction model and will give projects to investors with the lowest pricing and highest efficiency.”
A feed-in tariff is a policy tool that governments use to increase the renewable energy supply on the grid by stimulating investment. Utility companies responsible for supplying the national grid are required to purchase electricity from renewable energy providers at a predetermined price under a Power Purchase Agreement (PPA). The price is set at a level that is purposely designed to attract and stimulate new investment in the renewable sector. The tariffs apply to grid-connected plants and are valid for a 20-year period from the beginning of the PPA. Kenya’s tariff schedule is below. . .