Project Part 4

Strategic Audit

The Kenya Electricity Generating Company Limited, KenGen which is the leading electric power generating company in Kenya producing about 80% of the electricity consumed in the country. The company has a total of 24 power stations distributed country wide and the total installed capacity is 1239 MW with over 2000 qualified and self-motivated employees (www.kengen.co.ke).

KenGen boasts of over 50 years’ experience in the energy sector and has invested a lot in training of its employees and research in different fields of energy, especially in geothermal power. The company is considered to be having the finest combination of researchers in the field of geothermal energy exploration in the world. KenGen’s strategy implementation process is keenly revolving on improvement of existing plants, efficiency enhancement, expansion of production and risk assessment and management. KenGen is guided by professionalism, integrity, safety culture, and team spirit as its core values. The company’s vision is to become the market leader in provision of safe reliable quality and competitively priced electric energy in Eastern Africa.

KenGen works in line with its mission statement of generation of competitively priced energy using the state of at technology, skilled and motivated human resource and financial success. In deed the company has achieved market leadership through undertaking of least cost environmentally friendly capacity expansion. The employees adhere to the company’s core values in all operations. KenGen undertakes aggressive power generation capacity expansion and has gained operation excellence through optimizing maintenance practices, reducing costs, and strengthening of operational processes. Organization effectiveness has been achieved by the company through continuous and strengthened development of staff who are the foundation of the company’s success.

KenGen owns five thermal power plants and is currently constructing several other thermal plants at the Kenyan cost, it also owns 15 hydro power plants with a combined capacity of 840MW,Four Geothermal power plants and one wind farm generating more than 10 MW. KenGen produces 80% 0f the country’s total installed energy and has a market share of 72%. The company is in direct competition from six other liberalized power generating plants across the country. In order to fulfill its vision of becoming the market leader in production of competitively priced electric energy that is of high quality and safe, and to compete with the growing number of private investors in Kenyan energy sector, the company has adopted transformation strategy with three key pillars: the capital pillar which looks at regional and national expansion of geothermal energy targeting +3000MW by 2018 and focuses on delivery of current projects, and the regulatory pillar that looks into efficiency improvement of the single buyer and operation pillar focusing on reducing overhead costs and focuses on optimizing maintenance processes and practices (Oyserman, 2002).

Strengths of KenGen: – the company boasts of the largest geothermal power project under development in the world in Olkaria and it is the leading generator of power in Kenya with up to 72% market share. It is the largest geothermal power producer in Africa and the 7th in the world. It is also the sole wind power producer in East Africa. The company won an award for commissioning the quickest thermal power plant in a record of 14 months and it is the pioneer in geothermal wellhead technology in the world. The company has a large capital base and boasts of over 50 years of experience in the energy sector. KenGen got an ISO QMS 9001: 2008 and EMS 14001:2004 certified in 2008 and 2004 respectively. It is also the pioneer of Clean Development Mechanism (CDM) project development in Kenya. The company has started a project to develop the Ngong Hills wind plant to 25.5 MW. It is also researching more on geothermal energy in Ethiopia.

Energy consumption in Ethiopia is under developed and still very low per capita. The energy consumption is less than 1% from electricity, 5.4% from hydrocarbon fuels. Hydrocarbon fuels are consumed in the transport sector mostly and house hold energy comprise of traditional biomass fuel. The Ethiopian electricity generation capacity is slightly above 800MW and hydro-generation accounts for 90% generated from 8 hydropower stations. Diesel capacity produces approximately 120MW. Geothermal capacity of Ethiopia is estimated to be 5000MW and the current system only produces 7.3MW. KenGen is also looking to explore the unexploited geothermal energy in Ethiopia.

To counter the problem of power in Ethiopia, the Kenya Electricity Generating company together with the government of Ethiopia and have developed a plan to explore and tap geothermal power in 7 different prospect regions in Ethiopia, a move that will benefit both countries and act as step towards integration of the region and create a greater availability of electricity. Both governments with the help of World Bank and the African development bank will invest some fund in development of geothermal power in Ethiopia. Strategies are to be developed to produce and distribute geothermal power. The project which is estimated to take 48 months will cost approximately 7 billion Kenya shillings. The development will take place in faces in order to make it easy to monitor the progress of the whole process. This will help in elimination of waste, leaning the supply chain of the project and making adjustments where necessary (Ogola, 2012).

Reference

Ogola, P. F. A., Davidsdottir, B., & Fridleifsson, I. B. (2012). Potential contribution of geothermal energy to climate change adaptation: A case study of the arid and semi-arid eastern Baringo lowlands, Kenya. Renewable and Sustainable Energy Reviews, 16(6), 4222-4246.

Oyserman, D., Coon, H. M., & Kemmelmeier, M. (2002). Rethinking individualism and collectivism: evaluation of theoretical assumptions and meta-analyses. Psychological bulletin, 128(1), 3.