The energy sector plays a crucial role in facilitating the achievement of both domestic objectives outlined in Kenya Vision 2030 and global commitments, such as the Sustainable Development Goals (SDGs), climate accords like the Paris Agreement, and the broader Africa Agenda 2063.
The development of green hydrogen and its derivatives is in line with national objectives, representing innovation and commitment to a greener future amid the changing landscape of sustainable energy solutions. Through careful research, collaboration, and forward-thinking, the strategy aims to harness green hydrogen''s potential as a pivotal component of Kenya''s energy transition.
The roadmap indicates that Kenya possesses ample renewable energy resources to support large-scale green hydrogen production without negatively impacting electricity consumers'' access and supply. Kenya produces more than 90% of its electricity from hydropower, geothermal energy, solar and wind energy as well as biomass.
In this context as a leading African country in renewable energy with an abundance of the elements required to develop green hydrogen, it is well placed to acquire green hydrogen as an alternative energy source. This could enable Kenya to replace fossil fuels completely and thus create a new economic sector which keeps larger portions of the value creation chain in the country, leading to the generation of domestic jobs and economic growth.
In September 2023, Kenya launched its Green Hydrogen Strategy and Roadmapat the inaugural Africa Climate Summit in Nairobi together with the EU andGlobal Gateway Support for Clean Energy Transition.
The emphasis lies on the development and expansion of the domestic market, exports, and incorporates particular goals pertaining to reducing emissions, generating employment, and attracting direct investments.
The aim of the strategy is to "Harness Kenya''s unique and abundant renewable energy sources and innovation mindset to enhance agricultural production, industrialisation and decarbonisation through a phased and demand-driven approach."
Four key areas have been identified where the focus will be unwavering:
Source: Kenya Green Hydrogen Strategy and Roadmap, Ministry of Energy and Petroleum
Timeline and Priority Actions:
Q3 2024 - Q4 2026 and Beyond:
1. First commercial scale green hydrogen projects operational by 2027
2. Import substitution of nitrogen fertilisers:
3. Renewable capacity for green hydrogen:
4. Electrolyser capacity:
100% renewable electricity system by 2030.Nationally determined contribution of reducing GHG emissions by 32% by 2030.At least $1 billion direct investments by 2030.At least 25,000 direct jobs created between 2028-2032.At least 250,000 tonnes CO2 avoided per year by 2030.Production of green shipping fuels by 2030
While there are no laws or policies regulating the production, storage, and distribution of green hydrogen in Kenya at present, the existing general legal framework supports the adoption and utilisation of clean energy in the country. A few examples:
Under the Value Added Tax in 2013, the importation of windmills is not subject to import duty or value-added tax (VAT) while hydraulic turbines and water wheels do not attract any import duty but 16% VAT.
The Finance Act 2021 reinstated VAT exemptions on renewable energy equipment, such as solar and wind generation equipment, by scrapping the imposition of 14% VAT on the equipment which had been introduced by the Finance Act, 2020.
Fortescue: In March 2023, an agreement was signed between Energy, and National Treasury Cabinet Secretaries Davis Chirchir and Njuguna Ndung''u, and FFI Executive Chairman Andrew Forrest, to develop a 300MW capacity green ammonia and fertiliser facility using the Olkaria Geothermal resources in Naivasha.
KenGen Green Hydrogen, Ammonia to Green Fertilizer: A5MW Demonstration Plant, commissioning in 2025 (Phase 1) with an investment of$5 Million required addition, a100 MW Electrolyser capacity plantcommissioning in 2028 (Phase 2) with a total investment of120 million.
Renewstable® Kenya – HDF Energy: In September 2023, a Green Baseload Hydrogen power plant was announced. The plant will deploya 180 megawatt photovoltaic solar farm combined with a 500 MWh hydrogen battery storage unit.Total investment required for the project is $500 million.
A baseline Power-X study indicates by the Ministry of Energy of Kenya in partnership with the German Development Cooperation on the potential for green hydrogen in Kenya highlights that Kenya has potential to produce fertilizers and derivatives in the short to medium terms with pilot projects starting 2025. The Coast region, Rift Valley and wider Nairobi provide suitable location for successful green hydrogen production and markets.
The European Union is offering approximately $13 million in grants to encourage both public and private investments in Kenya''s green hydrogen sector.Furthermore, Global Gateway has set its sights on investing $3.6 billion in diverse climate and environmental initiatives in Kenya, spanning from renewable energy to climate resilience initiatives.Germany has also pledged its support for the green hydrogen project with a $64 million loan and intends to establish a Hydrogen Diplomacy Office in Nairobi to enhance dialogue and cooperation.
Ministry of Energy and Petroleum of the Republic of KenyaHon. Davis Chirchir, Cabinet SecretaryMr. Alex K. Wachira, Principal Secretary,State Department for Energy
Kenya''s green hydrogen strategy has been developed through a collaborative effort involving the Green Hydrogen Working Group, which includes representatives from the government, development partners, the private sector, and academia.
Furthermore, the process received extensive support from a diverse range of stakeholders, including the Green Hydrogen Working Group (co-chaired by MoEP and EU), government ministries, public sector institutions, academia, development finance institutions (DFIs), the private sector, and the Green Hydrogen Organisation (GH2).
The European Investment Bank. the world''s largest multilateral bank and leading global financier of renewable energy, will strengthen support for green hydrogen investment in Kenya.
Thomas Östros, European Investment Bank Vice President and Professor Njuguna Ndung''u, Cabinet Secretary, National Treasury and Economic Planning signed the Joint Declaration on Renewable Clean Hydrogen followings discussions on green hydrogen investment with William Ruto, President of the Republic of Kenya.
"Kenya has some of the best renewable energy sources in the world if the storage components were equally developed. The route to storage has the potential to develop green hydrogen to deliver sustainable, green and inclusive growth. Today''s agreement builds on decades of close cooperation with the European Investment Bank to support renewable energy across Kenya. Together we will develop projects that will develop green hydrogen as part of the Kenya Energy Roadmap 2040 " said Professor Njuguna Ndung''u, Cabinet Secretary, National Treasury and Economic Planning.
"Kenya''s wind and solar power can be harnessed to produce green hydrogen and provide affordable power for economic development and industrial growth. The Joint Declaration between Kenya and the European Investment Bank will improve understanding of how best to identify, structure, unlock and implement green hydrogen investment. Development of green hydrogen in Kenya has the potential to enable 100% of Kenya''s energy needs to be supplied by clean power." said Davis Chirchir, Cabinet Secretary, Ministry of Energy.
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