Inside push by multinationals to green their Kenyan units

Dozens of local companies have set up their own small power plants. [Istockphoto]

Kenya’s energy sector could benefit from a push by multinationals to have their local units adopt renewable energy as part of their global goals to cut down on pollution.

An increasing number of companies have over the recent past been building small captive power plants that complement what they get from the national electricity grid.

Many of these power plants are renewable, mostly powered by solar, with many of the firms looking to cut their power bills but also meet green goals.

A significant proportion of these companies are multinationals implementing programmes from their parent companies abroad.

Two oil marketing companies have installed solar panels at their petrol stations as they try to save on electricity costs but also meet green goals.

Rubis and Total Energies, both industry leaders in Kenya’s retail fuel market, are at different stages of solarising their petrol stations.

Other than the two being French-owned, their drive to solarise their petrol stations in Kenya stems from the push by their parent companies that have set green goals, which are now being cascaded to their subsidiaries around the world, including Kenya.

It is the same case for Eni – the Italian oil major – which in July this year started production of biofuel at a plant it constructed in Makueni County.

The firm, which is a leading oil exploration and production company and has also been exploring oil on the Kenyan coast, targets becoming carbon neutral by 2050.

Its biofuel production in Kenya is seen as a new era for the company.

Bamburi Cement, a heavy user of electricity in its production processes, is also going green, taking a cue from its parent company, Holcim - the Swiss-based global building material and aggregates company.

Rubis in its latest annual report says it is making huge savings in using both grid and solar electricity.

Installation of solar panels on the roofs of petrol stations is part of a programme that the French group Rubis is implementing across its subsidiaries.

“We launched a solarisation programme for several service stations and administrative premises, particularly in Kenya and Madagascar,” said Rubis in its annual report for the year to December 2021.

Lane lighting

The firm added that it is implementing “energy-saving initiatives in service stations, such as replacing lane lighting with LEDs or, solarising stations in Kenya and the Caribbean by installing photovoltaic panels to reduce electricity purchases but also improve the reliability of access to electricity”.

“A solarisation programme applicable to our sites and service stations is in progress (total installed power of 137 kWp (kilowatt peak) as of 31 December 2021),” said Rubis.

Total Energies Kenya said as of December last year, it had installed solar panels at 62 per cent of its petrol stations.

The firm explained that this is part of a programme started in 2015, with a global target of equipping 5,000 retail stations in 57 countries with solar panels.

The target was further reviewed to include installing solar panels in 2,500 stations in Africa by the end of this year.

“A total of Sh92 million was invested in the solarisation of 34 stations in 2021, closing the year at 141 service stations,” said Total in its annual report for the year to December 2021.

“TMK’s (Total Energies Marketing Kenya) investments in the country continue to support this global ambition. TMK has been installing solar panels on the rooftops of our service stations across the country since 2017. Solar energy powers lighting, fuel pumps, fridges, air conditioning and coffee machines thus reducing reliance on the electricity grid,” said the company.

“By December 2021, With an installed peak capacity of 1.3 megawatts (MW) we are able to produce 2.17GWh of energy annually from our solarised stations.”

“This contributes to elimination of 200 metric tonnes of carbon dioxide emissions annually, translating into a savings of between 20-40 per cent, depending on the capacity installed at the station.”

It noted that these and other energy conservation measures had led to a 10 per cent reduction in emission levels in 2021 compared to 2020. This was despite an increase in Total Energies’ operations.

Italian oil firm Eni has started production of vegetable oil at a plant it recently constructed in Makueni County. It is part of Eni’s plan to decarbonise its operations with an eye on zero emissions by 2050.

“This project embodies all the pillars of Eni’s approach to sustainability. First, carbon neutrality, as bio-refining, is an important element in our path to zero emissions by 2050,” said the company in a statement in July this year.

Eni‘s mainstay is oil and gas but says it is in “transition” and aims at “achieving carbon neutrality by 2050”.

Makueni plant

At the Makueni plant, the firm extracts oil from castor, croton and cotton seeds that are then processed into biodiesel at biorefineries.

The oilseed collection and pressing plant has the capacity to produce 15,00 tonnes of oil annually, with an expected production of 2,500 tonnes in the course of this year. It expects to double the production capacity to 30,000 tonnes by the end of 2023.

The firm said its venture is sustainable as the feedstocks do not compete with the food supply chain as they come from crops that are resistant to aridity and suitable for growing on degraded soils.

The agri-hub in Makueni is the first of several such hubs that the firm plans to put up in a number of the markets where it has operations, including Rwanda, Congo and Kazakhstan.

Holcim – Bamburi’s parent company – has a goal of reducing its carbon dioxide intensity to exceed 20 per cent by 2030 with 2018 as the base year.

In line with this and also in a bid to reduce its reliance on expensive grid power, Bamburi is building two solar power plants at its plants at Athi River in Machakos County and in Mombasa with a combined power production capacity of 19.5MW.

The firm last year signed a power purchase agreement with an independent power producer Momnai Energy, which will set up the two plants at its premises and supply power to the company.

The power producer recently lodged an application with the National Environment Management Authority (Nema) seeking approval to build the power plant at Athi River.

“The project, which aims to save on power costs as well as contribute to Net Zero carbon emissions by switching to renewable energy, is set to deploy solar power systems with a total capacity of 14.5MW and 5MW for Bamburi’s Mombasa Plant and Nairobi Grinding Plant respectively,” said Bamburi.

“This will account for up to approximately 40 per cent of Bamburi’s total power supply. The group is switching to more affordable and clean energy that will not only lead to a significant reduction in power costs but also bring us closer to our goal of achieving Net Zero carbon emissions.”

Construction is expected to start in November and be completed within a year.

The multinationals are not alone in their quest to cut power costs and reduce their carbon footprint.

Local companies

Dozens of local companies have set up their own small power plants.

A report published in February this year by the Energy and Petroleum Regulatory Authority (Epra) shows the extent to which companies are putting power-generating capacity within their premises.

The Epra report shows that while there are 90 power-generating licences issued to different companies, only 40 are currently actively supplying the national electricity grid.

The balance includes a number of Independent Power Producers (IPPs), whose plants are still in the development phase, but the majority of these licences are held by companies that have built small power plants to complement power from the grid.

There are also licences held by much smaller IPPs, which build and operate small plants at a client’s premises and the client pays for the power they consume from the plant, with the rates depending on the agreements the two companies have.

Many of these plants have a power production capacity of less than one megawatt.

In some instances, the companies cannot exhaust the electricity that their plants can generate and many usually have provisions for exporting to the national grid and selling to Kenya Power.

Epra noted that there is increased interest among investors to put up commercial-scale solar plants to feed the grid as well as small-scale plants for companies looking to cut power costs by complementing the power from the grid.

“Kenya’s geographical location astride the equator gives it a unique opportunity for a vibrant solar energy market. The country receives good solar insolation all year round with moderately high temperatures. The percentage of solar energy harnessed for commercial and domestic applications is insignificant relative to the potential,” said Epra in the report.