The role of geothermal and coal in Kenya's electricity sector

The study finds that geothermal energy is significantly more cost-effective and sustainable than coal for Kenya's electricity sector. It highlights that geothermal power has a lower Levelised Cost of Electricity (LCOE) of approximately USD 10 cents/kWh compared to USD 29.5 cents/kWh for coal. The report warns that planned coal plants in Lamu and Kitui could increase electricity costs by up to 50% due to surplus capacity and result in approximately 1,620 premature deaths by 2065 due to air pollution. Geothermal energy is also found to create three times more domestic employment per MW than coal and aligns better with Kenya's target to reduce greenhouse gas emissions by 30% below business as usual by 2030.

• Geothermal power is significantly cheaper than coal in Kenya's 2017-2037 Least Cost Power Development Plan (LCPDP), with a Levelised Cost of Electricity (LCOE) of approximately USD 10 cents/kWh compared to USD 29.5 cents/kWh for coal, largely because coal is expected to operate at a very low capacity factor.
• The planned 981 MW coal plant in Lamu could increase electricity costs by up to 50% due to surplus capacity. Furthermore, the take-or-pay purchase power agreement (PPA) for the Lamu plant includes a high capacity charge of USD 360 million per year, or roughly KES 100 million per day, which Kenya Power must pay regardless of whether the power is used.
• Geothermal energy provides greater domestic economic benefits than coal, creating three times more domestic employment per MW of new capacity. This is attributed to Kenya's existing local expertise in geothermal energy, whereas coal development would rely heavily on foreign labour for construction, operation, and maintenance.
• Coal power plants pose significant health and environmental risks compared to geothermal plants, which emit less than 1% of the air pollutants produced by coal plants of equal capacity. It is estimated that if both the Lamu and Kitui coal plants are built, approximately 1,620 Kenyans would die prematurely from air pollution by 2065.
• Replacing coal with low-carbon alternatives like geothermal could save almost 3 MtCO2 annually by 2037. Using a shadow carbon price, these emissions savings could result in annual cost savings of USD 160-320 million by 2037.
• To ensure security of supply and reduce site dependency, Kenya should diversify its geothermal development beyond the Olkaria fields—where half of the capacity is expected to remain by 2035—by developing fields such as Suswa, Longonot, Akiira, and Baringo Silali.

APA

NewClimate Institute (2019). The role of geothermal and coal in Kenya's electricity sector. http://www.newclimate.org/resources/publications/the-role-of-geothermal-and-coal-in-kenyas-electricity-sector-and

Chicago

NewClimate Institute. The role of geothermal and coal in Kenya's electricity sector. 2019. http://www.newclimate.org/resources/publications/the-role-of-geothermal-and-coal-in-kenyas-electricity-sector-and.

Wikipedia

{{cite report |author=NewClimate Institute |title=The role of geothermal and coal in Kenya's electricity sector |date=12 November 2019 |url=http://www.newclimate.org/resources/publications/the-role-of-geothermal-and-coal-in-kenyas-electricity-sector-and |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{newclimateinstitute2019role, author = {{NewClimate Institute}}, title = {{The role of geothermal and coal in Kenya's electricity sector}}, institution = {NewClimate Institute}, year = {2019}, month = nov, url = {http://www.newclimate.org/resources/publications/the-role-of-geothermal-and-coal-in-kenyas-electricity-sector-and}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }