Effective regulation is the backbone of a sustainable energy future

There is a growing demand for power generation in Kenya, driven by vibrant economic activities and increased electricity connections. With this comes the need to scale up capacity, especially from renewable energy sources like geothermal, solar, wind and hydro. In this respect, the entry of more players in the sector as witnessed in recent years signifies also an increase in the complexity in the country’s energy value chain. Without clear rules, issues such as grid instability, safety, or unfair pricing may arise, meaning that the renewable energy sector requires more robust regulation now.

Subsequently, the Energy and Petroleum Regulatory Authority (EPRA) has been developing and implementing regulatory instruments designed to shape the renewable energy transition in Kenya. These regulations guide how energy is produced, transmitted, distributed, utilised, and paid for. The scenario has fostered innovation and investment, while safeguarding consumers and the environment.

In the energy transition journey, regulations have been crucial in promoting access and inclusion by ensuring that the benefits of renewable energy reach everyone in all corners of the country. This involves licensing and registration regimes that allow both small and large renewable energy projects to be formally recognised. Thus, developing regulatory instruments that support distributed and off-grid systems and clarify the processes, make it easier for local communities, businesses, and households to connect to the grid or feed energy into it.

These regulatory frameworks have been crucial in ensuring that Kenya’s energy future is sustainable by promoting certainty for investments. If you are a local or international investor, these regulatory frameworks provide the kind of predictability that allows you to know what returns to expect, approvals needed, how tariffs are set, and how risks are managed.

Regulations shaping Kenya’s energy transition

Over the years, EPRA has developed a mix of regulations and guidelines which have steered the journey towards the energy transition. From the early adoption of Feed-in Tariff (FiT) policies, which provided guaranteed prices for renewable energy projects and encouraged the first wave of private sector participation in wind, hydro, biomass, and solar, to the introduction of comprehensive licensing frameworks under the Energy Act Cap 314, EPRA has steadily built the foundation for clean energy growth. These tools created an enabling environment for geothermal exploration, investment in large-scale wind farms such as Lake Turkana and Kipeto Wind, and the steady expansion of hydro and solar power in Kenya.

In recent years, newer regulatory instruments have deepened and diversified this progress. Take net-metering, for instance. With these regulations, energy consumers can now commission renewable energy systems of up to 1MW capacity and feed surplus power into the grid using bi-directional meters. While the framework aims to primarily encourage investments in renewable energy and increase grid capacity, the benefits are many. Net metering will help to reduce power bills for users by making use of other sources like solar energy.

EPRA's Regulatory Impact Assessment of Net-Metering further projects that a number of commercial and industrial customers would be capable of repaying the cost of solar PV systems a little bit faster than projected based on their usage patterns. They will also improve grid stability and resilience by contributing to power generation, meaning that there will be reduced pressure on centralised power plants to produce energy, especially during peak times. For consumers, this means less vulnerability to outages and disruptions, among other benefits.

Similarly, the Energy Management Regulations 2025 build on earlier obligations but set more stringent objectives. The designated premises must conduct audits every four years, submit investment strategies and achieve at least 50 percent of the energy savings that have been identified within three years.

The potential is huge. Kenya's National Energy Efficiency and Conservation Strategy (NEECS) has already proved that efficiency and conservation interventions saved public institutions more than Ksh13 billion ($152.8 million), or 1,014.8GWh of avoided energy consumption.

Technical standards and installation guidelines have also ensured that renewable projects are constructed and operated in a safe manner, and are reliably integrated into the national power system.

Shaping the uptake of emerging energy technologies

Regulation is also setting the stage for solutions of the future. EPRA has developed guidelines on green hydrogen and its derivatives, bringing clarity in permitting, licensing, safety, sustainability criteria and quality requirements. On the policy side, the Government and the Global Green Growth Institute (GGGI) have started a project to implement the Green Hydrogen Strategy and Roadmap in which together, they will mobilise as much as $200 million in investment while building local institutional and human capacities.

Transportation is also being transformed quietly. EPRA's special e-mobility tariff has brought in a stable, business model for EV charging, which is already yielding dividends.

According to the Biannual Energy and Petroleum Statistics Report for the FY 2024/2025, the total electricity consumption under the electric mobility tariff during the review period reached 1.80GWh, marking a 480.65 percent increase compared to the same period in the previous financial year. As of December 2024, the cumulative number of registered electric vehicles (EVs), including two-wheelers, three-wheelers, and four-wheelers, stood at 5,294, reflecting a 41.06 percent rise from 3,753 EVs registered in 2023.

Of course, effective regulation is evidence-based. EPRA has put data and research at the centre stage in its work, producing the Annual Energy and Petroleum Statistics Report to track supply, demand and consumption patterns. This data helps policymakers, businesses, and investors to make informed decisions in a constantly evolving sector.

Sharing knowledge is also particularly important to the Authority. The EPRA Research Week provides a platform where experts, scholars and players in the industry can exchange ideas on innovation and sustainability. EPRA hosting of the International Renewable Energy Conference (IREC) consolidates this, mobilising Kenya to stand up to the world and sell itself as an African champion of renewable energy.

INEP: Planning for the long term

Bringing all these efforts together is the Integrated National Energy Plan (INEP), a participatory framework that aligns supply and demand projections, identifies infrastructure needs, and places sustainability at the core of energy planning. In putting all types of energy under a single plan, INEP ensures Kenya's growth doesn't stray away from both climate change mitigations and development ambitions. It is the master blueprint of the long-term that puts the country on course for sustainable growth powered by clean energy.

The transition to the use of renewable energy is not so much about technology, but about responsibility and commitment as a nation. For this vision to become a reality, all stakeholders have their roles to fulfil. Industry players, investors, researchers and customers are required to familiarise themselves with the policies and regulations, take advantage of opportunities they bring, and align their actions to the realisation of a cleaner, greener Kenya.

In addition to these milestones, EPRA has made significant strides in the licensing of captive power projects, which are becoming an essential part of Kenya’s evolving energy mix.

Captive power – where entities generate electricity primarily for their own use, often from renewable sources – has seen rapid uptake, with over 600MW licensed to date. This capacity has played a critical role in enhancing energy security, easing pressure on the national grid, and promoting decentralised energy solutions. Without these plants, and in light of the current demand growth, parts of the country could already be facing load shedding.

In the clean cooking and transport sectors, EPRA has submitted the Biofuels Regulations to the Cabinet Secretary for gazettement. These regulations aim to support the adoption of cleaner fuels for cooking, as well as the blending of petrol with bioethanol and diesel with biodiesel. This shift not only supports Kenya’s transition to low-carbon energy, but also reduces reliance on imported fuels, saving foreign exchange and boosting incomes for local farmers.

Furthermore, the Open Access, Bulk Supply, and Electricity Market Regulations, currently awaiting Cabinet Secretary approval, will unlock new opportunities by allowing eligible customers to procure electricity directly from generators via the national grid. This will foster greater competition, reduce costs, and increase consumer choice, especially for large power users. Together, these progressive regulatory actions reinforce EPRA’s commitment to delivering a resilient, inclusive, and sustainable energy future for Kenya.