National Energy Policy - Final Draft - 14 Nov 2013

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6. Inherent weaknesses in Cap. 308 and in the model PSC which include lack of provisions for :(a) Compensation regime.(b) Licensing rounds.(c) Community awareness and participation.(d) Windfall profits.(e) Gas sharing terms.(f)Corporate Social responsibility requirements.(g) Mechanism for working out Government Share out of monetary gains from transfer of aPSC.(h) Defined criteria for evaluation of terms provided in PSC applications for prudence andcompetitive bidding for blocks.(i)(j)Environmental protection, conservation and management.Mechanism for working out national government, county government and local communitybenefits sharing.(k) Payment of royalty on gross oil produced.The model PSC is at Annex 10.1 in 10.0 Annexures.7. Petroleum resource is finite.8. Inadequate policy for sustainable utilization of petroleum revenue and its management.2.2.11.2 Petroleum Mid and Downstream1. Reliance on a single jetty for off-loading petroleum imports.2. Offshore and onshore access to the port:(a) The maximum draught at the entrance to the Mombasa port is 13.5 meters which limitsKenya’s ability to import cargoes bigger than 84,000 MT to KOT. It is to be noted that themaximum draught at the entrance to the Mombasa port is 16 meters after dredging.(b) For SOT the maximum ship size is 30,000 MT. The use of many small vessels results inhigher freight and demurrage costs. The access road to Shimanzi depot is narrow andleads to serious congestion of tankers.3. Outdated refinery:(a) Higher than normal fuel and loss performance because of Tops recirculation,(b) Programme yield is based on test run conditions (i.e. under controlled condition for a day,neat crude processing and without any upsets) which may not ordinarily be achieved.28 NATIONAL ENERGY POLICY FINAL DRAFT NOVEMBER 2013
(c) High sulphur levels have adverse impacts on the environment and health. Diesel sulphurspecification is becoming stringent world-wide for cleaner environment.4. Frequent power interruptions.5. Inadequate infrastructure for storage and evacuation of petroleum products.6. High initial cost of acquiring the necessary infrastructure.7. Lack of proper planning and coordination of petroleum infrastructure.8. Lack a petroleum (oil and gas) master plan.9. Whereas spot buying has various advantages, it exposes the country to price volatility andunreliability as opposed to long term supply contracts which come with price stability andreliability.10. High prices of petroleum products.11. Adulteration of petroleum products.12. Lack of centralized gas reticulation infrastructure to homes.2.2.12 Policies and Strategies - Petroleum (Upstream, Midstream and Downstream)2.2.12.1 Petroleum Exploration and ProductionPolicies and StrategiesPetroleum Exploration and ProductionShort Term2014-2017Implementation PlanMedium Term2014-2022Long Term2014-20301. Develop a policy on management of commercial discoveries ofpetroleum resources.2. The Government shall continue to promote, petroleum explorationactivities and support private and public investments.3. An inter-ministerial committee, called National Fossil Fuels AdvisoryCommittee (NAFFAC) shall be re-constituted under legislation toadvise the Cabinet Secretary on all petroleum and coal explorationmatters. members drawn from the Ministry in-charge of Energy,NOCK, Attorney General, NEMA, KRA and Ministry in-charge ofMineral Resources, National Treasury and the concerned CountyGovernment:.(a) ;(b) to prepare and review standard licensing terms of eachpetroleum block;(c) to negotiate with investors on the terms of the license of thepetroleum and coal blocks for exploration, production anddevelopment;29 2.0 – FOSSIL FUELS
Page 1 and 2: NOVEMBER 2013 DRAFTREPUBLIC OF KENY
Page 3 and 4: 2.4.4.1 Challenges in Coal explorat
Page 5 and 6: 4.5.5 Policies and Strategies and I
Page 7 and 8: Table 10.1 Energy Generation Potent
Page 9 and 10: FOREWORD BY THE CABINET SECRETARY F
Page 11 and 12: EXECUTIVE SUMMARY1. This policy doc
Page 13 and 14: 14. To enhance exploitation of the
Page 15 and 16: 24. The Government shall establish
Page 17 and 18: 1.0 - INTRODUCTION1.1 THE ROLE OF E
Page 19 and 20: (k) Promote appropriate standards,
Page 21 and 22: (e) The Weights and Measures Act, C
Page 23 and 24: fund, mobilizing resources for rura
Page 25 and 26: 2.0 - FOSSIL FUELS2.1 BACKGROUND1.
Page 27 and 28: immense value through acquisition o
Page 29 and 30: and averaging at more than US$110 p
Page 31 and 32: town of Mombasa, through Nairobi to
Page 33 and 34: 3. The prices in Kenya as published
Page 35: 6. It is hoped that the discovery o
Page 39 and 40: Policies and StrategiesPetroleum Ex
Page 41 and 42: Policies and StrategiesPetroleum Su
Page 43 and 44: plants has several advantages over
Page 45 and 46: Natural GasShort Term2014-2017Mediu
Page 47 and 48: 3. The introduction of clean coal t
Page 49 and 50: 6. Lack of a special purpose vehicl
Page 51 and 52: Policies and StrategiesFossil Fuels
Page 53 and 54: 4. Geothermal power plants use stea
Page 55 and 56: about 1,450MW remains unexploited.
Page 57 and 58: 8. Ownership of physical dam reserv
Page 59 and 60: (d) Competing interests between dev
Page 61 and 62: 3.4.2 Challenges1. Unsustainable us
Page 63 and 64: 4. Land will need to be set aside f
Page 65 and 66: Limited in Kilifi County generates
Page 67 and 68: high temperatures estimated at 4-6
Page 69 and 70: Policies and StrategiesSolar Energy
Page 71 and 72: 3. Inadequate wind regime data.4. L
Page 73 and 74: through co-generation and bioethano
Page 75 and 76: (d) 1 sea wave energy projects with
Page 77 and 78: 3.12.3 Policies and Strategies and
Page 79 and 80: 4.0 - ELECTRICITY4.1 BACKGROUND1. E
Page 81 and 82: 2. It is estimated that as at 2013,
Page 83 and 84: Figure 4.2 - Evolution of the Energ
Page 85 and 86: (e) Thermal power plants have a rel
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6. Nuclear fuel can be recycled and
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Policies and StrategiesNuclear Elec
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Table 4.5 - Planned Regional Inter-
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to this worsening situation leading
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4.5.5 Policies and Strategies and I
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Policies and StrategiesRural Electr
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Policies and StrategiesElectricity
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7. The energy policy and the Energy
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6.0 - LAND, ENVIRONMENT, HEALTH AND
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6.2.3 Renewable Energy1. Generally,
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causes indoor air pollution leading
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6.5 DISASTER PREPAREDNESS AND MITIG
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from the licensee.Policies and Stra
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Policies and StrategiesEnvironment,
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6.7.4.4 Nuclear ElectricityPolicies
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of the risk levels.Policies and Str
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6 It is a further requirement under
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Policies and StrategiesAccess to En
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Kenya.Policies and StrategiesEnergy
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15. Seek financing of clean energy
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Figure 8.1 - Pass-Through Costs in
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Table 8.1 - Energy Tariffs and Cost
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Policies and StrategiesEnergy Prici
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Policies and StrategiesCross Cuttin
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3. In 2009, ERC established a commi
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9.3.3 Policies and Strategies and I
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9.7 ENERGY RESOURCES BENEFITS SHARI
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10.0 - ANNEXURESAnnex 10.1 The PSC
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Table 10.3 Nuclear electricity gene
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Table 10.4 Summary of the Energy St
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County Population Area (km 2 ) Foss
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Page 152 and 153:
Page 154 and 155:
ACRONYMS AND GLOSSARY OF TERMS1. AC
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RD&DREAREPRMSSMRsSAPPToEVATWpResear
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Reticulation means the network used
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National Energy Policy - Final Draft - 14 Nov 2013

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